The African Development Bank Group (AfDB) has approved $200million to boost Nigeria’s electrification project, particularly the off-grid expansion being implemented by the Rural Electrification Agency (REA).
A source in the bank, who did not want his name in print because he was not authorised to speak, said the project is expected to provide electricity to households, medium, small and micro enterprises (MSMEs) and public institutions in a least-cost and timely manner.
According to him, the project has four components which include solar hybrid mini grids for rural economic development, stand-alone solar systems for homes and enterprises, energising education as well as technical assistance.
The proposed project, he said, will support the Federal Government’s aim of increasing electricity access as defined in the national development agenda, adding that in order to meet the government’s targets, the country will have to embrace both on-grid and off-grid expansion.
The AfDB, the source, is also supporting some independent power projects (IPPs), which are in the pipeline, but is most concerned with proving finance or guarantee instrument to off-grid power projects.
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The source said: “We also have some gas related projects we are looking at financing. We know that in the power sector we need gas as feed stock and we know companies that have interest in bringing gas to the market. Then we are looking at financing them to ensure that they are able to bring that gas to the market to the advantage of the electricity sector and others sectors.
“The Nigerian electrification project is soon going to be launched. We have already started preparatory activities on the solar projects. We are in discussions with the Nigerian Bulk Electricity Trading (NBET), so once these discussions are completed, may be by the end of the year and the financing structure is put in place, we can start construction as early as next year.