PRESIDENT Bola Tinubu has secured $70 million from the International Finance Corporation (IFC) as funding for the mini-grid projects which target underserved Nigerians without access to electricity.
The President secured the fund at the Africa Energy Summit which ended on Tuesday, January 28, in Dar es Salam, Tanzania.
The fund is part of a $1 billion facility set up by the IFC through grants from the Rockefeller Foundation and the African Development Bank.
According to the Managing Director of the IFC, Makhtar Diop, Nigeria is the first country to benefit from the fund.
“Yesterday President Tinubu signed the first project using this facility, yesterday we signed for $70 million, Diop announced at a session during the summit.”
The ICIR reports that with recurrent national grid collapse, mini-grids fill an important gap between expensive grid extension projects and low-power solutions like solar home systems, with most Nigerian homes and institutions opting for alternative energy from weak national grid infrastructure.
Power sector watchers said Nigeria’s large population and strong economy make it an attractive place to build the sector; the vast but underdeveloped mini-grid market offers revenue potential.
“Establishment of independent mini-power grids would greatly minimise power failure in the country,” a power sector expert, Joseph Adedayo said.
Commenting on concerns of energy poverty in Nigeria, the country director, of Power for All, Ify Malo said, “Looking at the issues around electricity, it is actually a poverty issue, there is something we call the energy ladder, and if we don’t get people climbing that ladder from tier 1 to tier 5 using much more sophisticated methods of energy access, we are going to have a lot more people remaining in poverty.”
“Energy access is a problem majorly faced by rural inhabitants who don’t have access to electricity at all while unreliability is faced by urban dwellers, who are paying for electricity but are not getting enough or even getting at all to meet their energy needs,” she added.
Electricity is a scarce commodity in Nigeria. With just over 4,000 megawatts supplying nearly 220 million people, the electricity access deficit stands at about 40 per cent nationwide.
The picture looks even darker in rural areas. There, 73 per cent of the population is off the power grid.
The ICIR reports that electrification is crucial to achieving Sustainable Development Goal 7: “access to affordable, reliable, sustainable and modern energy for all.”
The ICIR reported that the Rural Electrification Agency (REA) confirmed the electrification of 46,661 Micro, Small, and Medium Enterprises (MSMEs) will foster ease of doing business growth and provide opportunities for wealth creation.
The agency also said households and public facilities are also being electrified with a total of 103 mini-grids geared toward providing an enabling business and economic environment for them.
Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.