Facility complements FG’s efforts of providing affordable electricity to rural dwellers
The Central Bank of Nigeria(CBN) has unveiled a framework for the implementation of solar intervention facility, which it said was designed “to complement Federal Government’s effort at providing affordable electricity to rural dwellers through the provision of long term low interest credit facilities to the Nigeria Electrification Project (NEP) pre-qualified home solar value chain players that include manufacturers and assemblers of solar components and off-grid energy retailers in the country.”
As part of its Economic Sustainability Plan (ESP), the Federal Government had launched an initiative to achieve the roll out of five million new solar-based connections in communities that are not grid connected.
According to the CBN, the programme, which is aimed at supporting economic recovery given the impact of the Covid- 19, is expected to generate an additional N7 billion increase in tax revenues per annum and $10 million in annual import substitution.
In addition, the regulator said the initiative was expected to boost energy access to “25 million individuals (5 million new connections) through the provision of Solar Home Systems (SHS) or connection to a mini grid; increasing local content in the off-grid solar value chain and facilitating the growth of the local manufacturing industry; and incentivising the creation of 250,000 new jobs in the energy sector.”
According to the solar connection facility guidelines posted on the CBN’s website yesterday, upstream participants, including manufacturers of solar components and balance of system, assemblers of solar components, among others, who access the facility, are barred from using the funds to finance the importation of fully assembled solar components and Balance of System.
The CBN further stated that funding for participants would not exceed 70 per cent of the total cost of the project, while facilities granted under the facility “shall have a maximum tenor of up to 10 years as determined by the project’s cash flow profile but not exceeding December 31, 2030.”