REA releases N1.9bn grant for rural projects

The Rural Electrification Agency (REA) will give local operators the sum of N1.952 billion in grants to execute 26 private sector off-grid projects in rural areas, the agency has said.

Last week it signed agreement with local developers saying the grant would be funded from its fund.

REA maintains a Rural Electrification Fund with the objective of delivering more equitable access to electricity across regions, maximize the economic, social and environmental benefits of rural electrification subsidies, promoting expansion of the grid and development of off-grid electrification and stimulate innovative approaches to rural electrification.

A report on its website, published by Daily Trust quoted Damilola Ogunbiyi, the managing director of REA, the project would create over 400 jobs, providing clean, safe and reliable electricity to over 43,000 households and businesses. It will also reduce greenhouse carbon emissions annually by over 5,000 metric tons.

According to the report, The REF covers off-grid projects comprising Solar Home Systems (SHS), Mini Grid and Under the Grid projects. Some of the developers said they could deploy the energy solution within three weeks in Kebbi and Ogun State as they were already at the sites.

Among the 109 bidders,35 moved to the next stage while 26 were successful, a record showed.

The project has 12 mini-grid projects and the developers with N956.9 million grants. About N995.6m grant was awarded to 14 other developers for the Solar Home Systems (SHS) projects

The REF funds comes from any surplus appropriated pursuant to the EPSR Act 2005 (section 53), any fines obtained by NERC pursuant to the EPSR Act 2005 and any donations, gifts, or loans made by International Agencies, State Governments, the Federal Government, local communities, businesses, etc.

Other sources for replenishing the fund includes contribution that may be made pursuant to the EPSR Act 2005, and interest and other benefits accrued to the Fund (REF), monies appropriated by the National Assembly / Special Intervention fund and percentage of the annual turnover of the licensee’s as may be determined by the Commission.

Recall that in 2017 REA said it has secured $350 million from the World Bank for the purpose of rural electrification out of which $150m will go into funding the mini grid projects.

Courtesy of the World Bank’s Nigeria Electrification Project (NEP) to be implemented by REA after its approval in April 2018, key mini grid projects are expected to serve 200,000 households and 50,000 local enterprises across Niger, Plateau, Kaduna and Rivers states.