The African Development Bank (AfDB) has approved the sum of $500,000 grant for the provision of clean energy in Nigeria.
The fund, which was approved under AfDB’s Sustainable Energy Fund for Africa (SEFA), is to develop and launch Nigeria Energy Access Fund (NEAF), a new private equity fund developed by All On, a Nigerian impact investment firm financed by Shell.
What the funds will be used for: The grant will provide the necessary support to set the NEAF in motion and enhance its engagement with private and public sector investors. NEAF is a facility that will provide eligible projects and businesses with equity solutions that are currently unavailable in the market. It’s the first of its kind.
“Nigeria requires bespoke and innovative market-based solutions to provide its off-grid population, estimated at 100 million, access to sustainable sources of energy. The SEFA grant will be instrumental in the constitution of NEAF, and ultimately, the mobilisation of much-needed private sector investment for the sector,” the bank’s Acting Vice President for Power, Energy, Climate Change and Green Growth, Wale Shonibare said.
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When the plan finally works out, NEAF is expected to complement the AfDB’s wide range of sustainable energy initiatives currently being implemented in Nigeria. AfDB has been instrumental in supporting electrification projects in Nigeria.
- In May 2018, SEFA approved a $1.5 million grant to support the first phase of the Nigerian government’s Jigawa 1-GW Independent Power Producer Solar Procurement Program.
- In November 2018, the Board of Directors of the Bank approved a $200 million package to support the Nigeria Electrification Project (NEP), designed to help scale-up green mini-grid solutions with subsidies, among other measures.
What you should know: SEFA’s support to NEAF is targeted towards securing an energy deal for Africa, in line with the Bank’s 5 priorities which are: Light up and Power Africa; Feed Africa; Industrialize Africa; Integrate Africa, and improve the quality of life for the people of Africa. The project will boost Nigeria’s power sector recovery plans.
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SEFA is a multi-donor facility established to unlock private sector investments in small to medium-sized clean energy projects in Africa through three components.
- Grants to facilitate the preparation of renewable energy generation and energy efficiency projects towards bankability.
- Equity investments to bridge the financing gap for renewable energy generation projects; and
- Support to the public sector in improving the enabling environment for private investments in sustainable energy.
SEFA is endowed with contributions from the governments of Denmark, United States and the United Kingdom, and is hosted and managed by the Power, Energy, Climate and Green Growth Department of the African Development Bank.