Business & Strategy

Federal Government Secures $750m World Bank Funding for Rural Electrification

Written by Jerry Alomatu on May 22, 2024

News Views: 57

In a significant stride towards enhancing energy access in rural Nigeria, the Federal Government has greenlit a $750 million World Bank funding initiative aimed at erecting 1,200 mini-grids across rural communities.

Abba Aliyu, the Managing Director/Chief Executive Officer of the Rural Electrification Agency (REA), revealed this during a press briefing at the Alliance for Rural Electrification Energy Access Forum held in Lagos.

Aliyu highlighted that President Bola Tinubu sanctioned the Distributed Access through Renewable Energy Scale-up (DARES) project, which targets providing electricity access to approximately 19 million out of the 85 million Nigerians currently without reliable energy sources in rural areas.

Citing Nigeria’s status with the highest electricity gap globally, Aliyu emphasized the government’s commitment to narrowing this disparity. The allocated funds will serve as a capital subsidy to entice private sector involvement in electrifying 23% of Nigerians lacking access to electricity.

Aliyu outlined the project’s multifaceted approach, aiming to provide electricity through isolated mini-grids, interconnected mini-grids, and solar system mesh-grids, thereby catering to various electrification needs.

Additionally, the funding will facilitate the provision of productive equipment to over 40,000 farmers, enhancing agricultural productivity.

The government is cognizant of the necessity to transition from grant-based funding to commercially viable mini-grid investments for sustainable electrification. This shift aligns with broader efforts to empower organizations capable of delivering energy services independently, reducing dependency on grant funding.

Minister of Power, Adebayo Adelabu, highlighted the ministry’s focus on off-grid solutions to accelerate energy access, particularly in rural areas. He emphasized the need for commercially viable mini-grid investments to ensure sustainable electrification and reduce energy poverty.

The Alliance for Rural Electrification Energy Access Forum underscores collaborative efforts between the Nigerian government and international partners to propel renewable energy initiatives. Discussions center on strategies to provide energy access to the 85 million Nigerians currently underserved.

The $750 million funding represents a strategic investment in Nigeria’s energy future, aiming to transform rural communities and drive economic development through enhanced electrification.