FG Increases CBN’s ₦140 Billion Solar Intervention Fund

FG Increases CBN’s ₦140 Billion Solar Intervention Fund

Onyxnewsng reports that the federal government is increasing the disbursement of the N140 billion solar intervention fund, a facility established by the Central Bank of Nigeria (CBN) to address Nigeria’s massive energy gap, particularly in rural communities.

In the fourth quarter of 2020, the CBN announced the establishment of a fund that would provide obligors with access to a credit facility of up to N500 million, with the goal of providing rural residents with affordable mini-grid solutions.

The apex bank asserted that the pathways to energy access, financial inclusion, and poverty reduction were inextricably linked and necessitated the rapid deployment of pay-as-you-go off-grid technologies, which would generate a $2 billion annual market opportunity.

The federal government is increasing the disbursement of the N140 billion solar intervention fund, a facility established by the Central Bank of Nigeria (CBN) to address Nigeria’s massive energy gap, particularly in rural communities.

In the fourth quarter of 2020, the CBN announced the establishment of a fund that would provide obligors with access to a credit facility of up to N500 million, with the goal of providing rural residents with affordable mini-grid solutions.

The apex bank asserted that the pathways to energy access, financial inclusion, and poverty reduction were inextricably linked and necessitated the rapid deployment of pay-as-you-go off-grid technologies, which would generate a $2 billion annual market opportunity.

He emphasized that the funds were intended to encourage local developers in the renewable energy industry to step up their game, and he confirmed that a number of developers had already benefited from them.

“The loans in naira denominated funds have been a problem because getting funds from outside the country causes foreign exchange problems.”

“We have already disbursed to a few developers, and we hope that in the future, 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 promised that off-grid power would make significant progress this year, adding that the Rural Electrification Agency (REA) would expedite the process.

“We anticipate multiple commissionings of large mini-grid projects across the country in universities, markets, and rural areas,” he said.

Furthermore, Habeeb Jaiyeola, an Energy Expert at PWC, stated that in a developing market like Nigeria, interventions like the current one are critical.

“In developing countries like Nigeria, interventions from government entities such as the CBN are all necessary, but proper integration is required.”

“There’s a lot of infrastructure investment in that entire architecture,” he claims.

While more funding has been directed toward conventional energy generation sources, Jaiyeola observed that investment in the renewable sector, where the government intends to generate 30% of the 30,000 megawatts projected by 2030, has fallen short.

He advised that the intervention should be structured in such a way that beneficiaries are able to repay the fund, allowing the fund to contribute to the development of other sectors.

He stated that the government should consider the plan in light of existing initiatives, such as the Siemens power deal, and that the facility would be easier to service than a dollar-denominated loan.

“The currency differential continues to work against the country.” So it’s great that the money is coming from within the country.

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“This development is applicable across the board, not just in the power sector,” he explained.
Adedoyin Adeleke, Executive Director of the International Network for Africa Development (ISNAD-Africa), stated in his remarks that the N140 billion is a welcome development for developing rural communities by bridging energy access.

According to the CBN, 85 million Nigerians lack access to grid electricity, accounting for 43 percent of the country’s population and making Nigeria the world’s largest energy access deficit country.

Furthermore, Nigeria was ranked 171 out of 190 countries in terms of electricity access in the 2020 World Bank Doing Business report.