• Thursday, February 29, 2024
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Nigeria to source $1.5bn loan to improve solar power

The Federal Government on Thursday revealed plans to partner with the United States energy firm, SUN Africa LLC, USA, to secure a $1.5 billion loan from the US-EXIM Bank to deliver solar power infrastructure in 10 different locations in the country.

Adam Cortese, chief executive officer, SUN Africa LLC, USA, disclosed this on Thursday after leading a delegation of the company to meet with President Muhammadu Buhari at the Presidential Villa, Abuja.

He explained that the loan was a government-to-government facility at a concessional rate of over 20 years. He stated that the Niger Delta Power Holding Company (NDPHC) will own the assets which are expected to generate low-cost electricity and enable the company pay back the loan.

He explained that this is government-to-government financing. It’s built upon the success that we’ve had in Angola recently, where we’ve delivered roughly $2.6 billion of solar PV storage and transmission capacity.

“I think the important point to note here is yes, it’s a government-to-government loan, from the US-EXIM Bank to the government of Nigeria, but it’s being done on a concessional rate; over 20-year tenure, which is extremely attractive.

“What’s unique about this model is that NDPHC is going to own its own assets. So, it’s going to own its own generation base and our project will deliver low-cost electricity, which will not only allow them to pay back the loan from EXIM Bank but generate a profit on top of it.”

President Buhari, while speaking when he received the team, declared that the rapid integration of solar power into the country’s energy mix will lead to an increase in electricity access to underserved and unserved communities.

He said his administration has embarked on several reforms aimed at revitalising Nigeria’s energy sector aimed at improving energy access to communities across the country.

He commended the interest of the US developer to invest in Nigeria’s power sector, pledging that the Federal Government would remain committed to collaborating with the private sector in improving energy access, creating jobs, and industrial development.

Highlighting some of the reforms embarked upon by this administration to address Nigeria’s energy needs, the president listed the recent signing of the Nigeria Climate Change Bill in November 2021, the implementation of the Power Sector Recovery Programme with the World Bank, and the Nigeria Electrification Program aimed at enhancing energy access to remote communities.

He also added that the Presidential Power Initiative with Siemens was aimed at achieving end-to-end alignment across the electricity value chain.

According to a statement by Femi Adesina, special adviser to the president, media and publicity, the president said “the initiatives like these will go a long way in developing local capacity through technology transfer and relieving transmission constraints through the generation and distribution of electricity in the local distribution companies franchise area, making off-take easier.

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‘‘The ministers of finance and power, as well as other agencies of government, will remain available at all times, to ensure the achievement of this significant project as part of our efforts towards achieving Net Zero Emission by 2050.

‘‘I am pleased to note the technology transfer content embedded in this initiative as well as the employment generation potentials. I thank you all for coming and look forward to receiving regular updates as you achieve significant milestones in developing your projects in Nigeria.”

In his remarks, Goran Rajsic, founder, Sun Africa LLC, USA, said the renewable and infrastructure company hopes to deliver solar power in multiple locations across the country, just as it has done in Angola, with financing done through the US EXIM Bank.

He submitted that his organization, working with other leading energy companies, has the capacity to do what Nigeria requires in the area of power.

“We will create something that will be of immediate need for Nigeria, and last for years to come. He described what Sun Africa LLC, USA has in mind as “a partnership for energy and infrastructure, which will revolutionize both the industrial and agricultural sectors.”

The managing director/CEO, Chiedu Ugbo, said the company will utilise the loan facility to provide solar power at 10 sites starting with five, including Gwagwalada, Lafia, Dadinkowa, Geregu, among others.

He assured that the project will enhance the generation capacity of the NDPHC, by adding another 1000 megawatts of electricity, adding that power generation has been hampered by gas limitations.