Stakeholders canvass sustainable financing for rural electrification
AS Nigeria battles with electricity supply with millions of rural dwellers totally unconnected to the grid despite the poor performance of the electricity grid system, stakeholders are demanding for sustainable financing that will increase electricity access across unserved and underserved communities.
Despite being privatised about eight years ago, over 80 million people in Nigeria reportedly lack access to electricity and those with connections do not have a reliable supply.
Although the privatisation of the power sector left the responsibility of rural power supply in the hands of Rural Electrification Agency ( REA), the funding gap remained a critical challenge as over N3 trillion is reportedly needed yearly to bridge the electricity access in the country.
This is coming at a time when the International Energy Agency says about $ 49 trillion should be invested in renewables and efficiency over the decade until 2030 as the agency predicted that renewables would provide 57 per cent of global power generation by 2030, up from 25 per cent in 2017 and an expected 30 per cent in 2020.
Some stakeholders, who noted that funding remained critical, especially that the government would power rural communities and enable them to contribute meaningfully to national development, insisted that getting policies and strategies would be a key enabler to the efforts being made through the
REA.
Last week, the Federal Government said $ 550 million loan borrowed from World Bank and African Development Bank ( AFDB) is currently being spent to electrify rural communities across Nigeria.
The fund targeting unserved and underserved communities comes under the Nigeria Electrification projects ( NEP) and implemented by the Rural Electrification Agency ( REA).
About 267 agreements totaling $ 395 million ha ve already been signed for renewable electricity deployment, REA said in a media parley in Abuja, while adding that $ 350 million of the loan came from the World Bank and $ 200 million loan came from AFDB.
The agency, in a briefing noted that $ 64.8 million of the commitments ha ve been disbursed to private sector partners for the execution of the projects.
The plan would provide offgrid reliable and clean electricity su pply to 705,000 households, 90,000 micro , small and medium enterprises, 100 isolation and treatment centres and 400 primary healthcare centres in unserved and underserved areas of the country, Managing Director of REA, Ahmad Salihijo Ahmad said.
Ahmad said: “Now government money is used as an enabler to attract private investment. For instance, for the rural electrification fund, you have a capital subsidy where if a project cost N100 million, that subsidy will come in at may be 50- 60 per cen and the private developer will come up with the rest of the money, deliver the service to the community and go into an agreement with the community for the rest of the money”. “What we are used to doing is every year we wait and get government’s money from the budget, go to the site and then implement the projects. However, if you are to do this for the next 100 years, you will not be able to meet those targets hence it became important for the agency to ensure that its mandate does end at implementation”.