- President Bola Tinubu has approved a $1 billion financing package for the Rural Electrification Agency to enhance renewable energy access across Nigeria, including a $750 million Distributed Energy System (DES) project.
- The International Finance Corporation has launched a $250 million funding initiative to support Renewable Energy Service Companies (RESCOs) participating in the DES program.
The Rural Electrification Agency (REA) has secured a $1 billion financing package, approved by President Bola Tinubu, to expand access to renewable energy across Nigeria. This includes a $750 million funding initiative for the Distributed Energy System (DES) project, which President Tinubu officially launched on Tuesday.
Abba Abubakar Aliyu, the REA Managing Director/CEO, shared this update at a Stakeholders’ Engagement Workshop held in Abuja on Wednesday. He also highlighted the International Finance Corporation’s (IFC) $250 million financing to support Renewable Energy Service Companies (RESCOs) in the DES program.
Aliyu explained that the funds are now available to the private sector, urging companies to identify communities and begin deploying renewable energy infrastructure. Once a grant agreement is signed with the REA, private sector participants can secure funding from the IFC, as the financing agreement mirrors the grant terms.
Aliyu emphasised the role of the private sector and subnational governments in Nigeria’s new energy landscape, pointing out that the recently passed Electricity Act 2023 has liberalised the entire electricity value chain. This reform allows local governments and private entities to participate actively in electrification efforts.
He also mentioned the creation of a framework for distributed renewable energy facilitated by the National Electrification Strategy and Implementation Plan. This initiative is being led by the Executive Governor of Cross River State, with representatives from each of Nigeria’s geopolitical zones.
The REA has made significant progress, deploying 124 mini-grids and 25,580 solar home systems, collectively providing 16.6 MW of power. Over 195,000 connections have been made across 183 communities, including 12 markets. Aliyu announced that the project aims to deliver continuous power to 3,700 primary healthcare centres, 25 schools per state, 25 communities, and solar-powered tricycles and charging stations across all 36 states and the Federal Capital Territory (FCT).
The Minister of Power, Adebayo Adelabu, emphasised the government’s commitment to bridging the electricity supply gap, with approximately 80 million Nigerians still lacking access to power. He noted that the $750 million World Bank loan for renewable energy development is a key part of the government’s strategy to address this issue, especially in rural areas, where the e-HEART project will deploy mini-grids to create sustainable economies and reduce rural-urban migration.
Additionally, the government has secured $700 million from the African Development Bank for the “Desert to Power” project, aimed at harnessing the vast solar potential in northern Nigeria to generate renewable energy.
Dr Sunday Owolabi, the Director of Renewable and Rural Power Access, expressed optimism that these efforts would impact at least 13 million Nigerians. He also mentioned a recent €161 million contract approval for power substation upgrades under the Presidential Power Initiative (PPI), which will add 150 MW to the national grid, benefiting 14 existing substations and establishing 21 new ones.
The REA team and its partners are confident that the ongoing renewable energy projects, including the Distributed Access through Renewable Energy Scale-up (DARES) program, will significantly impact Nigeria’s energy access and contribute to the country’s development.