AfDB to disburse $250m into Nigeria’s off-grid energy sector

Nigeria’s off-grid renewable energy space could see a cash rain as the minister of power says the African Development Bank has confirmed its readiness to disburse a previously approved $250 million for rural electrification projects.

In a message posted on social media platform X, formerly Twitter, Adebayo Adelabu, the minister of Power who is attending the Korea-Africa Economic Cooperation (KOAFEC) Ministerial Conference 2023 held in Busan, South Korea, indicated that the fund for the Nigeria Electrification Project (NEP) under the Rural Electrification Agency (REA) is underway.

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“AfDB also confirmed readiness to disburse a previously approved $250million fund for the Nigeria Electrification Project (NEP) under the Rural Electrification Agency (REA) and extended support to Northern Nigerian states through the $20billion 10,000MW Northern Africa Desert to Power fund,” he said.

The Nigeria Electrification Project (NEP) is a Federal Government (FG) initiative that is private-sector driven and seeks to bridge the energy access deficit by providing electricity to households, MSMEs, and educational and healthcare facilities in unserved and underserved rural communities through the deployment of mini-grid, Solar Home Systems (SHS), captive power plants and productive use appliances to ensure the sustainability of these off-grid solutions.

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The Project is expected to contribute to more than 500,000 people obtaining access to electricity; approximately 76.5 MW in increased installed power generation capacity; eight universities obtaining access to reliable sources of energy; 20,000 Micro-Small and Medium-sized Enterprises (MSMEs) supported/supplied with productive use appliances and equipment; and the avoidance of 1.69 million tons of CO2 emissions.

The opportunities for private operators are immense as the project will affect the installation of mini-grid systems in 250 sites; 24,500 productive use solar PV appliances installations; mini-grid systems installed in eight federal universities; and institutional capacity strengthening provided to REA and ecosystem.

To support the implementation of the NEP, the Federal Government of Nigeria, through the REA, has successfully secured financing from both the World Bank ($350m) and the African Development Bank ($200m). The minister’s statement seemed to suggest that the sum has been reviewed.

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The initial financing provided under the NEP has enabled electricity connection for over 600,000 households, 4795 MSMEs, and Treatment/ isolation centers completed, with projects underway in three teaching hospitals and 15 federal universities.

The minister also said the Nigerian delegation has “secured an In-Principle Agreement from AfDB for Technical Advisory Sponsorship, potentially encompassing stress testing and capacity simulation of Nigeria’s power infrastructure.

“This initiative aims to establish operational capacity across the entire value chain, facilitating project prioritization,” he said.