Nigeria receives $200m loan for NEP to address energy access deficit

Nigeria has already implemented one of the most comprehensive regulatory frameworks for off-grid development in Africa and has attracted preliminary interest from both large international companies and local firms.
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Nigeria Electrification Project will be implemented by Rural Electrification Agency. Credit: Fré Sonneveld on Unsplash

In order to resolve its energy access deficit, Nigeria has received a $150 m loan from the African Development Bank (ADB) and a $50 m loan from the Africa Rising Together Fund (AGTF) for its Nigeria Electrification Project (NEP).

The loans would assist the country in its rural electrification efforts, which could be accomplished through the growth of the private sector, the introduction of off-grid solutions and the construction of federal university power systems.

The NEP, to be introduced by the Rural Electrification Agency, would help channel private sector investments into commercially viable mini-grid and off-grid solutions.

Amadou Hott, ADB Vice-President for Power, Energy, Climate Change and Green Development, said:
“Given the limited amount of public financing available, projects that catalyse private sector investment are critical in enabling the ADB and its regional member countries meet their shared objective of electrifying the continent within the next decade.”

The NEP project is aligned with the ADB's New Deal on Energy for Africa, the Climate Change Action Plan and the High-5 Priorities.

In addition, the project is aligned with the Rural Electrification Policy and Implementation Plan of Nigeria and the Power Sector Recovery Program, aimed at boosting private investment in the energy sector.

One goal of the NEP is to boost private sector investment in the off-grid sector as a measure to boost universal energy access.

Ebrima Faal, ADB Country Office Director for Nigeria, said:
“Nigeria has already implemented one of the most comprehensive regulatory frameworks for off-grid development in Africa and has attracted preliminary interest from both large international companies and local firms. The NEP will provide the spark that is needed to convert private sector interest into action.”

The NEP is expected to build jobs and play a positive role in the education sector by providing federal universities with access to affordable power through hybrid power plants, which would minimize their heavy dependency on diesel generators.

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