Here is how REA plans to power 20,000 MSMEs with $200m renewable energy project
Nigeria will need all the ideas it can muster to grow its flailing power sector which is why the federal government in partnership with African Development Bank (AfDB) launched the $200 million Nigeria Electrification Project (NEP) to provide off-grid energy devices and machinery to 20,000 micro, small and medium-sized businesses.
The off-grid solution project under NEP is expected to commence in the next five months, will also provide clean and reliable energy and halt of 1.69 million tons of carbon emission into the environment.
The Bank and Africa Growing Together Fund’s (AGTF) joint funding of $200 million will de-risk and scale-up private sector participation in the market, fostering a business environment conducive to the accelerated electrification of off-grid communities in Nigeria.
The project comprised of four components which include; Solar Hybrid Mini Grids at $70 million, Energy-Efficient Appliances for Productive Use at $20 million, Phase 3 of the Energizing Education Program at $100 million, and Technical Assistance and capacity building at $10 million.
The project will be implemented by Nigeria’s Rural Electrification Agency(REA), an agency tasked with solving Nigeria’s energy access shortfalls by directing private sector investments into mini-grid and off-grid solutions to achieve universal energy access by 2030.
“Apart from supporting 20,000 MSMEs with productive use appliances and equipment; NEP-AfDB will contribute to more than 500,000 Nigerians in 105,000 households in off-grid or underserved communities,” Ahmad Salihijo, managing director of REA.
NEP is the largest single investment stream in Nigeria’s off-grid sector addressing the energy access challenge through mini-grids, the solar home systems and the Energizing Education Program (EEP) of the Federal Government.
“Over 500,000 people will have access to approximately 76.5MW of increased installed power of which 68MW will be solar generated,” said AfDB’s Acting Vice President for Power Energy, Climate Change and Green Growth, Wale Shonibare.
According to Shonibare, Nigeria needs to connect 500,000 to 800,000 households per year to achieve the electricity for all target by 2030 in line with the Sustainable Development goals (SDGs) as 80 million Nigerians lack access to sustainable and affordable electricity.
Shonibare noted that although Nigeria’s power sector was privatized in 2013, it still struggles to generate 4,000 megawatts (MW) for the Nigeria population, leaving 80million without access to power. “With the improvement in off-grid technology, there is now a means to reach unserved and underserved communities”.
Seven years after the privatisation of the power sector in 2013, Nigeria has been able to improve its electricity challenges. The investors who took over the power firms are still grappling with the old problems in the sector.
Even with an installed generation capacity at 12,910.40MW, electricity production has been hovering between 3,000MW and 5,000 MW as a result of gas constraints, transmission line issues and low demand by electricity distribution companies. The peak generation ever attained in the country is 5,375MW, which is insufficient to meet the energy needs of about 200 million population.