The African Development Bank and the Africa Growing Together Fund (AGTF) have approved a $200m loan for the Federal Government of Nigeria to finance the Nigeria Electrification Project (NEP).
Image: African Development Bank, AGTF offer $200m financing for Nigeria Electrification Project. Photo: Courtesy of Fré Sonneveld on Unsplash.
For the electrification project, the African Development Bank has approved $150m sovereign loan to the Federal Government of Nigeria. NEP.
The AGTF is a $2bn facility sponsored by the People’s Bank of China and directed by the African Development Bank. AGTF has also approved a loan of $50m to the Federal Government of Nigeria to co-finance the project.
The joint funding is expected to support the government’s attempts to tackle the deficiency of critical energy access and achieve the universal energy access target by 2030.
Financing provided to the NEP, which will be implemented by the Rural Electrification Agency (REA), is aimed at boosting private sector development and launching new off-grid solutions, along with the installation of dedicated power systems for Federal Universities.
The NEP allows channeling private sector investments into mini grid and off-grid solutions to deal with the energy shortage with an innovative approach.
The NEP is in line with the bank’s various plans and deals on energy and climate change, like Energy for Africa, High 5 priorities and Climate Change Action Plan. The project is also aligned with the Rural Electrification Strategy and Implementation Plan (RESIP), and the Power Sector Recovery Program by the Federal Government of Nigeria to boost private investments into the energy sector.
The African Development Bank’s Nigeria office director Ebrima Faal said: “Nigeria has already implemented one of the most comprehensive regulatory frameworks for off-grid development in Africa and has attracted preliminary interest from both large international companies and local firms. NEP will provide the spark that is needed to convert private sector interest into action.”
NEP aims to increase the private sector investment in the off-grid sector. The African Development Bank, which operates both within the framework of NEP, will work with public and private sector stakeholders to support the development of an ecosystem for rapid, electrification of off-grid communities in Nigeria.