Manufacturers to leverage $81m renewable energy fund to bridge gaps
With the country’s energy deficit estimated to range between 30GW and 175GW, even though a large percentage of the demand is from the industrial sector, local manufacturers have been urged to take advantage of available financing for renewable energy adoption.
According to the Manufacturers Association of Nigeria (MAN), increased cost of electricity, despite its limited availability continues to depress confidence of local producers in the economy, notwithstanding the huge impact on production costs.
To this end, the French Development Agency and MAN have put together an $81m funding scheme for the development of renewable energy and the energy efficiency sector in Nigeria.
Both organisations are supporting renewable energy development in Nigeria through the Sustainable Use of Natural Resources and Energy Finance programme.
The fund is composed of a €60 million ($70 million) low- cost debt financing, a €9.5 million ($11 million) grant facility and technical assistance provided to partner banks and project developers.
SUNREF is a green financing line for businesses developed by the French agency and MAN, as both organisations just hosted an investor’s conference to attract investment into Nigeria’s renewable energy and energy efficiency sector.
According to SUNREF Nigeria Programme, the $81 million would be disbursed as low cost debts and grants. MAN President, Mansur Ahmed, at the SUNREF conference said: “The SUNREF facility has come at the right time when manufacturers need more power to drive our operations.
“We are excited about it as potential beneficiaries, and we hope that both our members and non-members will take full advantage of this opportunity.”
The Chief Executive Officer, All-On, Wiebe Boer, highlighted the market potential in the renewable energy and energy efficiency sectors in Nigeria.
“The size of the energy gap in Nigeria is between 30GW and 175GW, and would cost between $40 billion to $200 billion to address. Nigerians spend $15 to $20 billion annually on power, which is ten times the grid,” said Dr Boer. “This is also a market opportunity for providers of constant, reliable electricity, such as mini-grids which are a potentially $10 billion market”, he added.
SUNREF Nigeria programme, seeks to improve access to energy through improved access to affordable finance for renewable energy technologies and energy efficiency initiatives that will improve lives, increase economic opportunities, and support various sectors such as industry and agriculture.
The SUNREF initiative has been deployed in over 30 countries and successfully supported over 42 projects in partnership with about 70 banks to the tune of about €2.5 billion from AFD, of which €1.2 billion has been paid.