Nigeria needs approximately $23 billion to address its electricity challenges and improve the reliability of power supply across the country, the Managing Director and Chief Executive Officer of the Rural Electrification Agency (REA), Abba Abubakar Aliyu, has said.
Aliyu made the disclosure at the weekend during the signing of a N50 billion Memorandum of Understanding (MoU) between the REA and Alpha Morgan Bank to accelerate electricity access in underserved communities across Nigeria.
According to the REA boss, the funding currently available to address the country’s electricity challenges remains significantly below the amount required, making additional financing critical to closing the power gap.
He said the agency was therefore exploring multiple funding sources and expected to receive an additional $119 million from the Japan International Cooperation Agency (JICA) for the deployment of interconnected and isolated mini-grids.
Under the agreement, Alpha Morgan Bank will provide up to N50 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.
Eligible developers will also have access to revolving loans of up to N10 billion per developer, with proposed tenures ranging from 12 to 24 months, subject to the bank’s credit assessment and approval.
The bank will provide up to 70% counterpart funding for eligible projects.
Aliyu said the partnership was designed to address one of the major challenges confronting renewable energy developers: access to affordable and timely financing.
He explained that improved access to credit would 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 him, the partnership will strengthen private-sector participation in Nigeria’s energy transition while helping to reduce the country’s electricity access gap.
“Access to finance remains critical to the successful delivery and scale-up of decentralised renewable energy projects,” Aliyu said, adding that the financing mechanism would help developers move from project approval to implementation more quickly.
Managing Director and Chief Executive Officer of Alpha Morgan Bank, Ade Buraimo, who was represented by the bank’s Executive Director, Doyin Anyaehie, said the partnership reflects the financial institution’s commitment to sustainable development through innovative financing.
He said reliable electricity is fundamental to economic growth and improved livelihoods, particularly for small and medium-sized enterprises (SMEs) and rural communities that cannot sustainably afford alternative power sources.
Buraimo said the bank was proud to partner with the REA to finance eligible renewable energy developers under the DARES programme and support the delivery of reliable electricity to underserved communities.
The partnership will also provide eligible developers with financial advisory support, while the REA will facilitate project approvals, grant agreements and project verification.
The collaboration is expected to strengthen the connection between public-sector funding and private-sector finance, accelerate renewable energy deployment and support the Federal Government’s objective of expanding reliable and sustainable electricity access across Nigeria.
