Africa Growing Together Fund provides $50 million loan for Nigeria Electrification Project (Linked to Umbrella Record ID#36104)

Africa Growing Together Fund provides $50 million loan for Nigeria Electrification Project On May 22, 2014, the African Development Bank (AfDB) and the People's Bank of China (PBOC) signed an agreement for the Africa Growing Together Fund (AGTF) (see Umbrella Record ID#36104). The purpose of this $2 billion loan facility was to finance large development projects in Africa between 2014 and 2024.

The AGTF is sponsored by the PBOC and the administered by AfDB.

Then, on March 4, 2019, AGTF signed an $50 million loan agreement (ID#5050200000551) with the Government of Nigeria for the Nigeria Electrification Project (NEP).

On the same day, the African Development Bank (AfDB) issued a $150 million loan (ID#200200003401) to the Government of Nigeria for the same project.

The first AfDB and AGTF loan disbursements took place in December 19, 2019. The AGTF loan had achieved an 0.2% disbursement rate ($100,385.87 out of $50,000,000) as of December 301, 2019.

The $1.215 billion project was also supported by the World Bank ($350 million), commercial financing ($660 million), and the Government of Nigeria ($5 million).

Nigeria Electrification Project (NEP) is a Federal Government of Nigeria initiative that is private sector driven and seeks to provide electricity access to households, micro, small and medium enterprises in off grid communities across the country through renewable power sources.

NEP is being implemented by the country’s Rural Electrification Agency (REA) in collaboration with the World Bank and it aims to be the largest off-grid electrification project across 250 communities in 4 states (Niger, Ogun, Sokoto and Cross River).

The project will seek to provide electricity to households, small-to-medium-sized enterprises, and public institutions in a least-cost and timely manner through off- and mini-grid solutions. NEP’s objective is to provide over 500,000 people with access to affordable sources of electricity.

The specific objectives of the project are are to (a) increase electricity access to households and micro small and medium enterprises (MSMEs); (b) provide clean, safe, reliable and affordable electricity through renewable power sources to unserved and underserved rural communities; (c) develop a data driven off-grid model for Nigeria that will become an exemplar for Sub-Saharan Africa; and (d) provide reliable power supply for 250,000 (MSMEs) and 1 million households.

The project has 4 components: (1) Solar Hybrid Mini Grids: Partial grant support will be provided to support the development of private sector mini grids in unserved areas to electrify households, local enterprises, and public institutions.

This component includes a minimum subsidy tender to electrify selected communities that have high economic growth potential, and a performance-based grant program that developers may use to electrify the communities of their choice. (2) Standalone Solar Systems (SHS): Market-based incentives and technical assistance will be provided to standalone solar system providers to install solar home systems to help millions of underserved Nigerian households and enterprises.

With this, Nigerians will access clean, safe and reliable energy services from private companies at a lower cost. (3) Energizing Education Programme (EEP): The overall objective of this component is to provide reliable, affordable and sustainable power to universities and associated teaching hospitals.

This EEP’s scope is 37 federal universities and 7 associated university teaching hospitals across the country, serving approximately 120,000 people.

These learning institutions will be powered by electricity generation systems of 1 MW to 11 MW that can operate either isolated from the grid or connected to the grid. (4) Technical Assistance: The provision of technical assistance will support project implementation and broad capacity building in the Federal Ministry of Power, Works and Housing and the Rural Electrification Agency.

It will also finance project implementation as well as help build a framework for rural electrification.

As of June 2020, AfDB provided the following NEP implementation summary: ‘Due to [a delayed] project start up, NEP has suffered from procurement implementation delays and slow disbursement. The [AfDB] task team has been continuously working with PMU – with guidance from relevant bank teams, i.e.

FM, SNFI, and disbursement to review the implementation plan, work plan and procurement plan.