The federal government is ramping up the disbursement of the N140 billion ($336.9 million) solar intervention fund, a facility by the Central Bank of Nigeria (CBN) to close the huge energy gap, especially in Nigeria's rural communities.
In the last quarter of 2020, the CBN had introduced the fund that would offer obligors access to a credit facility that would not exceed a maximum of N500 million, with the aim of providing affordable mini-grid solutions to rural dwellers.
The apex bank posited that the pathways to energy access, financial inclusion and poverty reduction were closely linked and required rapid scale of pay-as-you-go off-grid technologies that would create a $2 billion annual market opportunity.
To support the economic recovery in response to the COVID-19 pandemic, the CBN said the federal government launched the initiative as part of the Economic Sustainability Plan (ESP) to achieve the rollout of 5 million new solar-based connections.
According to the CBN, the solar connection scheme aims to expand energy access to 25 million individuals (five million new connections) through the provision of solar home systems or connection to a mini-grid.
Stakeholders who spoke on the matter, stated that proper implementation of the fund was capable of lifting many underserved communities from poverty, especially in the use of the deployment of energy uses in agriculture.
Executive Director, Rural Electrification Fund (REF), Sanusi Ohiare, said government had been working and making remarkable progress through the N140 billion CBN fund.
He stressed that the whole idea was to encourage local developers in the renewable energy industry to up their game, confirming that a number of developers had already benefitted from the funds.
"The loans, in naira denominated fund, have been an issue because by getting funds outside the country, it comes with foreign exchange problems.
"We have already disbursed to a few developers and we are hoping that going forward, we can scale up the disbursement so that we can manufacture renewable energy components and provide electricity through mini-grids and solar," he said.
In his intervention, Special Adviser to the President on Infrastructure, Ahmad Zakari, assured that off-grid power would experience massive progress this year, adding that the Rural Electrification Agency (REA) would fast track the plan.
He said: "The NSIA just announced a N10 billion intervention under solar power Naija and we see solar off-grid connections moving towards new peaks as financing is crowded in through Solar Power Naija and other REA programmes with critical development finance institutions.
"We expect multiple commissioning of large mini-grid projects in universities, markets and rural areas across the country," he explained. ■