…New credit facility to support FG’s rural electrification goals
A new collaboration between key local and international energy firms is aiming to address bottlenecks and reduce cost of renewable energy through a $10 million aggregated solar equipment procurement financing facility.
Under the Renewable Energy Master Plan (REMP), Nigeria is aiming to increase the share of renewable electricity from 13 per cent of electricity generation to 23 per cent in 2025 and 36 per cent by 2030.
While All On, Odyssey Energy Solutions, and the Global Alliance for People and Planet already launched the impact investment in Nigeria there are indications that the move would ensure affordable, high quality solar products communities in the country.
This is at a time that the country is struggling to sustain its grid-generated electricity while the rest of the world focuses on renewable energy.
With the new development, there are indications the country may be able to accelerate the growth of the renewable energy sector by combining demand pooling and aggregated purchase of solar equipment, access to affordable finance, and coordinated logistics processes to unlock economies of scale for solar companies and achieve cost savings for end users.
The All On-managed finance facility would provide debt funding for solar companies already approved by the Rural Electrification Agency (REA) for the Nigeria Electrification Program (NEP) to purchase lower-cost solar equipment through the DART.
Managing Director of Innovation for the Alliance, Eric Wanless said the facility is an important part of the Global Energy Alliance for People and Planet, which is accelerating the transition to renewable energy access for all, reducing emissions and creating jobs.
According to him, aggregating the procurement of standardised DRE products will ensure low-cost, reliable, and clean energy is empowering people and businesses in Nigeria.
The Equipment Finance Facility for Nigeria is seeded by matching investments of $5million from All On and The Alliance respectively.
All On CEO, Wiebe Boer said: “We are particularly excited about this deal which will inject much needed capital into the renewable energy sector in Nigeria.”
According to him, the innovative partnership provides a solution to industry challenges such as high finance costs and lack of scale, by ensuring price competitiveness, supply chain optimization and unlocking local currency financing.”
Odyssey Energy Solutions is expected to provide aggregated procurement services in five pilot countries in Africa, starting in Nigeria.
