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From Isaac Anumihe, Abuja
Managing Director and Chief Executive Officer (MD/CEO) of Rural Electrification Agency (REA), Abba Abubakar Aliyu, has said that Nigeria needs a whooping $23 billion to address electricity challenges in Nigeria and to enhance reliability of supplies.
Aliyu made the disclosure, at the weekend, when he signed a N50 billion Memorandum of Understanding (MoU) with Alpha Morgan Bank to accelerate electricity supplies to underserved communities in Nigeria.
However, he regretted that what is available to address the challenges is far less than the money available.
” So, that is why we need to continue to crowdfund this financing. And we are expecting any moment from now additional financing of $119 million from Japan International Corporation Agency (JICA). That will also be used for the deployment of interconnected mini-grid and isolated mini-grid.
Under the MoU, Alpha Morgan Bank will provide up to ₦50 billion in project financing to eligible renewable energy developers participating in REA-led programmes, including the Distributed Access through Renewable Energy Scale-up (DARES) Project” Aliyu explained
Also, eligible developers will have access to revolving loans of up to ₦10 billion per developer, with proposed tenures of 12 to 24 months, subject to the bank’s credit assessment and approval. Alpha Morgan Bank will provide up to 70 per cent counterpart funding for eligible projects.
The partnership, he said, is designed to address one of the major challenges facing renewable energy developers: access to affordable and timely financing.
“By improving access to credit, the collaboration is expected to enable developers to procure equipment, complete projects more efficiently and expand electricity services to households, public institutions and businesses in rural and underserved communities.
According to Aliyu, the collaboration would strengthen private-sector participation in Nigeria’s energy transition and help close the electricity access gap.
“Access to finance remains critical to the successful delivery and scale-up of decentralised renewable energy projects. This partnership provides a practical financing mechanism that can help developers move from project approval to implementation more quickly, while expanding reliable electricity access to communities that need it most” he said
Managing Director/CEO of Alpha Morgan Bank, Ade Buraimo, who was represented by the Executive Director, Doyin Anyaehie, stated that the partnership reflects the bank’s commitment to sustainable development through innovative financing.
‘’Access to reliable electricity is fundamental to economic growth and improved livelihoods. Through structured financing and advisory support, our collaboration with REA will help bridge the gap between renewable energy projects and the capital required to deliver them” he said.
Buraimo noted that reliable electricity is a basic necessity and critical to economic activity, particularly for Small and Medium Enterprises (SMEs) and rural communities that cannot sustainably afford alternative power sources.
“Alpha Morgan Bank is proud to partner with REA to provide financing to eligible renewable energy developers under the DARES programme for the provision of reliable electricity to underserved communities” he noted.
Meanwhile, the partnership will also provide eligible developers with financial advisory support, while REA will facilitate project approvals, grant agreements, and verification. The collaboration is expected to strengthen the link between public-sector funding and private-sector finance, accelerating renewable energy deployment and supporting the Federal Government’s objective of expanding reliable and sustainable electricity access across Nigeria.
