The federal government has secured a $200 million loan from the African Development Bank (AfDB) to fund electrification projects in the country.
In a statement on Monday, the bank said its board of directors approved the sovereign loan to finance the Nigeria Electrification Project (NEP).
While AfDB approved $150 million, the Africa Growing Together Fund (AGTF), a $2 billion facility sponsored by the People’s Bank of China and administered by AfDB, approved a $50 million to co-finance the project.
According to the statement, the joint financing will support rural electrification efforts in Nigeria by facilitating private sector development and the rollout of off-grid solutions, as well as the installation of dedicated power systems for federal universities.
“The joint financing from the Bank and AGTF will support the Federal Government of Nigeria’s efforts to address critical energy access deficit in the country, and catalyze achievement of universal energy access by 2030 targets,” the statement read.
“The NEP, which will be implemented by the Rural Electrification Agency (REA), presents an innovative approach to address the energy access deficit by channeling private sector investments into commercially viable mini grid and off-grid solutions.”
Damilola Ogunbiyi, managing director of Rural Electrification Agency (REA), said the agency is pleased with the development.
“We are extremely pleased with the African Development Bank’s decision to support NEP. By supporting the electrification of unconnected and underserved communities, NEP will contribute materially to their economic development,” he said.
“Access to reliable, affordable and clean electricity will result in savings for households and businesses, which can be deployed to other uses. NEP will also train and employ thousands of Nigerians with particular focus on women and young people.”
In November, Akinwumi Adesina, president of AfDB, said he was ashamed of the country’s power generation despite the fact that the bank had invested over $200m in driving power generation and transmission in Nigeria.