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REA shops for $750m cash for renewable energy project

The Rural Electrification Agency (REA) is currently shopping for $750 million worth Distributed Asset Renewable Energy Scale Up (DARES) project from other financial institutions aside the World Bank and African Development Bank (AfDB).

According to the agency's Managing Director, Ahmad Salihijo Ahmad, the DARES is the biggest funded project globally.

The Head, Project Management Unit (HPMU), Mr. Abba Aliyu broke the news to reporters in Abuja during the Renewable Energy Conference 2023.

The conference that Renewable Energy Association of Nigeria (REAN) organized had the theme: "Transforming Energy Finance: Bridging Gaps & Building Opportunities."

The project, he said, is part of the Federal Government's effort through REA to continuously  develop mini - grid projects in the country.

He recalled that the REA is already implementing the $350million World Bank Financed and African Development Bank $200million Nigerian Electrification Project ((NEP) that is total $550million project.

Ahmad said: "The Nigerian Electrification Project is $350 million finance by the World Bank and $200 finance by the African Development Bank in total, $550m. That is a big project.

"Currently, the Federal Government is working on a much bigger programme. We call it the Distributed Asset Renewable Energy Scale Up. And that is a $750million project.

"We are also looking at another financial institutions and that will make that project the biggest funded in the entire world."

Earlier, he explained that the NEP is to give mini- grid developers access to grants and subsidies to reduce the cost of electricity.

He said through a company named Productive Use of Equipment the agency incentivizes equipment financiers to sell their equipment to mini - grids so that the mini -grids can continuously be economically viable and continuous leader and off - taker of the electricity generated from the  project.

He identified access to financing as a key challenge facing the development of renewable energy.

He urged the conference to ponder on financing that is innovative.

The REA boss insisted "We have to think of financing in local currency."

Ahmad recalled that President Bola Tinubu passed into law the 2023 Electricity Act a few months ago.

He noted that a forward-leaning and people-centered framework, the revisions on the Act shows how committed the Federal Government is toward deepening efforts on the alleviating energy poverty in Nigeria.

According to him, with the critical role the State Governments are now expected to play, we are confident this will enable us to start working in lockstep with regional institutions to draw in investments, private sector participation, finance and viable clean energy technologies.

The REA boss said, "As we delve into topics such as "Financing Options for SMEs and Low- Income Consumers" and "Scaling up Consumer Finance Models," we recognize the profound impact that robust financial mechanisms can have on transforming the energy landscape.

"It is a testament to our collective commitment to ensuring that no one is left in the dark, both figuratively and literally.

Speaking, the chairman, House Committee on Renewable Energy, Hon. Afam Victor Ogene described fossil fuel as enemy of mankind.

He noted that renewable energy can bridge the energy gap in Nigeria.

Ogene said: "Instructively, records, research and science, have all shown, evidentially, that fossil fuels are one of such friendly enemies of mankind.

"When we hear about climate change, or gradual but steady destruction of the ozone layer, we in this part of the world may not relate practically to such seeming 'abstract conversations' that may not readily address our peculiar and immediate economic or socio-political challenges."

According to him, energy plays a crucial role in  everyday lives, whether as individuals, Small and Medium Enterprise (SMEs), big manufacturing firms and Service providers.

He insisted that the overall role of energy in economic development, Agriculture and productivity in corporate and government offices, cannot be quantified.

Meanwhile, the REAN President, Dr. Ayo Ademiluwa disclosed that the major issue consumers were grappling with were affordability of renewable energy technologies in their homes and businesses.

He noted that the conference was for experts to discuss the available financial solutions and supports from government and other agencies for the adoption of renewable energy technology in Nigeria.