- VP commends UBA, Sterling Bank, First Bank, Fidelity Bank, for leading off-grid financing in Nigeria
Designed to boost ongoing efforts to fix Nigeria’s energy supply challenge, the 5 million homes solar installation plan under the Buhari administration’s Economic Sustainability Plan (ESP) will be a game-changer in the renewable energy space, according to Vice President Yemi Osinbajo, SAN.
This is because, besides the installation of the 5 million solar home system and mini grids, the initiative will also generate significant employment through the development of local capacities for the manufacture and maintenance of solar components and equipment.
Prof. Osinbajo stated this Thursday at a virtual engagement with stakeholders involved in the implementation of the Solar Power Naija Initiative.
Under the arrangement, the Rural Electrification Agency (REA) will drive the implementation while private companies will install and manage the home systems, drawing funding from a low-cost loan facility from the Central Bank of Nigeria.
According to the Vice President, “Our Solar Home System was designed to be a game-changer in the renewable energy space, in other words, it is not just a programme to provide off-grid power alone, but one that creates opportunities for the development of the local capacities in the assembly, manufacture and even maintenance of equipment.
“We have seen quite a bit of interest already from international and local players across the off-grid solar value chain, there is indeed a lot of interest that we are seeing.”
Under the Solar Home System of the ESP, the Federal Government is connecting 5 million households to solar systems and servicing 25 million Nigerians who are not connected to the national grid.
Under the scheme, there is an option of outright ownership by beneficiaries possibly at a rough estimate of N4, 000 per month for a period of 3 years. Also, there is the value addition to the economy in the area of job creation for at least 250, 000 persons and the ramping up of local content in solar equipment manufacturing systems installation and maintenance.
Emphasizing the Federal Government’s commitment to the project, Prof. Osinbajo said, “we are open and ready to partner, let’s go out there and ensure that we are able to do this 5 million connection in record time.”
“The banks that are keyed into this have already shown a great deal of interest and leadership in this particular area and we commend them for what they have done so far. We hope that we will be able to work closely with them as we go ahead. And same with all of the assemblers, manufacturers of off-grid systems,” Prof. Osinbajo added.
Citing the example of A-Solar’s 100,000 connections project as an effective public private partnership in delivering reliable off-grid energy to underserved communities, and developing the entire value chain, the Vice President said “one of the innovative deals that I like to highlight as part of what is going on is the A-Solar 100,000 connections transaction which is supported by Sterling Bank and the NDPHC.”
His words: “The transaction is interesting, and in some sense, it is exemplary because it combines not just the deployment of a 100,000 systems but also the setting up of two local assembly factories by A-Solar. So, it really does capture what we are trying to do here. We are trying to not just deploy systems, off-grid capacities but we also want to create opportunities for local assembly and eventually manufacturing, and this particular transaction captures that.”
While calling on commercial banks to support the Federal Government’s drive to develop the local capacity for the entire solar energy sector, the Vice President commended Sterling Bank for its stand financing off-grid power projects in the country.
“I like to highlight Sterling Bank’s continued support for the Off-grid space in partnership with the CBN’s development finance group. We have seen a couple of these huge transactions and we are hoping that we will be able to see more of these kinds of transactions and we are hoping that all our friends and partners will be able to collaborate with us.
“This programme, of course, can’t work without the commercial banks, and I will like to thank the UBA, Sterling Bank, First Bank, and Fidelity Bank for being at the forefront of off-grid financing and I will like to encourage you to be our anchor banks to drive the transactions at an accelerated but structured manner.
“As you know, the CBN is committed to this, and we hope that this partnership will be one that we will be able to leverage to achieve great things in the coming months. Please leverage on the funding opportunities that have been offered and all of our internal people are willing to work to ensure that you succeed,” the Vice President stated.
Corroborating the Vice President’s views about the potentials of the Solar Home System, in his contribution at the meeting, the Minister of State for Power, Mr Godwin Jedy Agba said the 5 million solar connections will usher in more investments in the off-grid space, creating more jobs for Nigerians.
Stakeholders present at the meeting include the Managing Director of the Rural Electrification Agency (REA), Mr Ahmad Salihijo; the representatives of the Governor of the Central Bank of Nigeria (CBN); Sterling Bank; First Bank of Nigeria; United Bank for Africa (UBA); Fidelity Bank; Pan Africa Solar; Auxano Solar; Blue Camel Energy; Lumos Nigeria; GVE Projects Limited; and ENGIE Energy Access.
