AfDB, EU Brainstorm Over Nigeria’s Dilemma To Connect 95m Rural Dwellers To Electricity

The European Union (EU) and African Development Bank (AfDB) are in the process of redefining their financing grants to catalyse Nigeria’s electricity industry which is struggling to bridge supply gap that has left about 95 million people in darkness.

Nigeria’s weak grid system has shut out a significant number of people out of the electricity market and has been in darkness for decades.

It is still not clear as to how and when this population would be energised as according to Chief Adetayo Olowoniyi, Chief Technical Adviser, Federal Ministry of Power, the country’s intervention capacity would not be adequate enough to provide electricity to that large population.

Olowoniyi highlighted the difficulties in achieving the mandate while addressing the media at the opening of the Energy Access Investment Forum (EAIF) in Lagos on Tuesday.

The forum is the top annual investment event for the renewable electrification sector, fostering business and investor partnerships for the purpose of sustainable electricity access, decarbonisation, economic growth and fighting against climate change.

The EAIF 2024 is organised by the Alliance for Rural Electrification co-hosted by the Delegation of the European Union to Nigeria and ECOWAS, and supported by GET.

The Technical Adviser said except private investments were expanded and sustained, the existing gap in the system would be difficult to bridge.

However, the acting Managing Director and Chief Executive Officer of the Rural Electrification Agency (REA), Abba Abubakar Aliyu, said the Agency has sustained off-grid deployment across the country with the aim to reduce the yawning gap.

Aliyu said the Agency is utilising the $750 million grant to provide access to a good number of people and is gradually and sustainably inching to achieve set target.

Aliyu said the World Bank approved the Nigeria Distributed Access through Renewable Energy Scale-up (DARES) project, being financed by $750 million International Development Association (IDA) credit.

This would leverage over $1 billion of private capital and significant parallel financing from development partners.
The financing from development partners include $100 million from the Global Energy Alliance for People and Planet and $200 million from Japan International Cooperation Agency (JICA).

Other development partners collaborating on the programme include the United States Agency for International Development (USAID), the German Development Agency (GIZ), SEforAll, and the African Development Bank (AfDB).

The REA CEO noted that the DARES project aims to provide over 17.5 million Nigerians with new or improved access to electricity through distributed renewable energy solutions.

The DARES project will use innovative financing solutions to scale up private sector led clean electricity provision in Nigeria.

About 95 million Nigerians lacked access to electricity; businesses and households with access to the national grid have faced unreliable and insufficient supply, a gap often filled with power from petrol and diesel-run generator sets that are costly and highly polluting to people and the environment.

To further address the access gap, DARES will build on the achievements of the World Bank-financed Nigeria Electrification Project (NEP), which has supported the establishment of 125 mini grids and the sale of over a million Solar Home Systems, through which more than 5.5 million Nigerians have gained access to electricity.

“We are committed to expanding clean energy-based access in Nigeria, with the $750 million Nigeria,” Aliyu declared.

Providing further information on EU intervention, Inga Stefanowicz, said the Union has provided support in Nigeria’s renewable energy market, which aims to provide energy efficiency (industry, building and appliances, policy, regulatory and institutional framework support.

This she said has provided jobs for youth and women with greater intervention in On- and Off-grid Renewable energy infrastructure investment

There were also ongoing projects in the energy sector and currently the EUD has nine active project in the energy sector, including Small Hydro Power Development for Agro-industry Use in Nigeria.

Stefanowicz revealed some funding in advancing Nigeria’s green and just transition to Net Zero through circular
economy practices with about €4 million implemented by UNIDOand another €1.7 million for Nigeria Solar for Health Project implemented by
NTU International.

There is also additional €30 million project implemented by
EDFI MC (consortium of European Development Finance Institutions)
plus €60 million loan from AFD), implemented by AFD.

Also, the Northern corridor, Katsina-Kano transmission line coating €25 million plus €220 million loan from AFD), implemented by AFD, all dedicated to improving the power sector.