Nigerian regulator seals $395m deal to boost rural electrification

*The Rural Electrification Agency says it has signed 267 agreements worth about $395 million to provide off-grid reliable and clean electricity supply to consumers in 705,000 households, 90,000 Micro, Small and Medium Enterprises in the West African country

Isola Moses | ConsumerConnect

In the country’s effort at lighting up while empowering the grassroots, the Rural Electrification Agency (REA) has signed 267 agreements worth about $395 million to provide electricity to unserved and underserved Nigerians under the Nigeria Electrification Projects (NEP).

ConsumerConnect reports Mr. Salihijo Ahmad, Managing Director of REA, told reporters in Abuja, FCT, that the Nigeria Electricity Programme is currently funded by a $350 million World Bank loan and $200 million African Development Bank (AfDB).

Ahmad said that the loan for the rural electrification programme is to provide electricity to Nigerian communities.

The REA Chief also stated that about $64.8 million of the commitments had been disbursed to private sector partners for the execution of the projects.

The electricity programme, he noted, is expected to provide off-grid reliable and clean electricity supply to 705,000 households, 90,000 micro, small and medium enterprises.

Ahmad further said that the power project would also provide 100 isolation and treatment centres and 400 primary healthcare centres in unserved and underserved areas in Nigeria.

According to him, over the years, REA had moved from just being an implementer of Federal Government projects in the sector to a hub and an enabler of business in the sector.

Such agreements signed with private developers have led to over a million connections across the country, stated he.

The Managing Director said: “The REA has the mandate of taking power to unserved and underserved Nigerians. How it goes about doing this depends on where the funding comes from.

”According to the rural electrification strategy plan, we have targets to reach Nigerians everywhere in the country and the numbers at the moment, are being quoted to be as high as 80 million people.”

He as well said: “To achieve this, a lot of funding is required and what we are used to doing is that every year we wait and get government’s money from the budget, go to the site and then implement the projects.

”However, if you are to do this for the next 100 years, you will not be able to meet those targets hence it became important for the agency to ensure that its mandate does not end at implementation.”

With the Rural Electrification Fund, which is private sector-driven, REA became a hub and an enabler to ensure that funding comes from different areas to enable it deliver on its mandate.

He noted: “Now government money is used as an enabler to attract private investment.

”For instance, for the rural electrification fund, you have a capital subsidy where if a project cost N100 million, that subsidy will come in, may be at 50-60 per cent and the private developer will come up with the rest of the money.

”Deliver the service to the community and go into an agreement with the community for the rest of the money.”

Speaking at the media briefing, Ms. Anita Otubu, Head of Programme Management Unit at NEP, explained that the programme has five components.

Otubu stated these include the solar hybrid mini-grid worth $213 million, standalone solar home systems $75 million, energising education programme $250 million.

Others were the energy efficient equipment and productive use of appliances worth $20 million, and technical assistance at $37 millon.

The NEP Head of Programme Management disclosed that 67 mini-grids had been completed with 995,396 solar home systems deployed, with about 1,151 jobs were created on the electricity programme this far.