The World Bank has approved the sum of $750 million for Nigeria’s Distributed Access through Renewable Energy Scale-up (DARES) project.
The project being financed by the Bank’s International Development Association (IDA) credit is expected to expand access to clean energy for 17.5 million Nigerians.
In a statement on Friday, the World Bank said: “The DARES project will use innovative financing solutions to scale up private sector led clean electricity provision in Nigeria.
“As of 2021, over 85 million Nigerians lacked access to electricity; businesses and households with access to the national grid have faced unreliable and insufficient supply, a gap often filled with power from petrol and diesel-run generator sets that are costly and highly polluting to people and the environment.
“To further address the access gap, DARES will build on the achievements of the World Bank-financed Nigeria Electrification Project (NEP), which has supported the establishment of 125 mini grids and the sale of over a million Solar Home Systems, through which more than 5.5 million Nigerians have gained access to electricity.
“NEP has also resulted in the creation of over 5,000 private-sector local green jobs in Nigeria.”
Recall that IDA in June 2020, also approved a similar amount of $750million under the Power Sector Recovery Operation (PSRO) to achieve financial sustainability and enhance accountability in the sector.
The PSRO was meant to ensure that 4,500 MWh of electricity was supplied through the National Grid by 2022.
It is uncertain whether this objective was achieved before the DARES programme was approved.
According to the World Bank, DARES would enable the Nigerian Government to coordinate and finance all off-grid electrification efforts, and also assist states to access technical assistance to develop institutional capacity and policy frameworks for rooftop solar.
Additionally, the programme would prioritise gender and inclusion by building on the NEP’s gender-related actions to facilitate access to electricity for disadvantaged female-headed households and women-led Micro, Small and Medium Enterprises (MSMEs), and actions to increase the employment of women in the energy sector.
It will benefit over 17.5 million unserved, underserved, rural, and remote Nigerians through the deployment of standalone solar and mini grids and replace more than 280,000 polluting and expensive petrol and diesel generator sets, an important step for Nigeria towards achieving its energy transition targets.
Energy access
Commenting on the facility, World Bank Country Director for Nigeria, Shubham Chaudhuri, was quoted as saying: “We are committed to expanding clean energy-based access in Nigeria, with the $750 million DARES project being the largest ever single distributed energy project of the World Bank globally.
“It will benefit over 17.5 million unserved, underserved, rural, and remote Nigerians through the deployment of standalone solar and mini grids and replace more than 280,000 polluting and expensive petrol and diesel generator sets, an important step for Nigeria towards achieving its energy transition targets.” said.
During the pandemic, Chaudhuri did say that the objective of the PSRO was “to help turn around the power sector and set it on a fiscally sustainable path.
He had also noted that “The lack of reliable power has stifled economic activity and private investment and job creation, which is ultimately what is needed to lift 100 million Nigerians out of poverty.”
This latest facility would leverage over $1 billion of private capital and significant parallel financing from development partners, including $100 million from the Global Energy Alliance for People and Planet; and $200 million from Japan International Cooperation Agency (JICA).
Others are the United States Agency for International Development (USAID), the German Development Agency (GIZ), SEforAll, and the African Development Bank (AfDB).
Also commenting, the Minister of Power, Adebayo Adebalu, said: “Through the DARES project, Nigeria will be able to provide up to 237,000 MSMEs with reliable and clean electricity for productive uses that will help improve their potential to generate income and create local jobs.
“I am excited to contribute to this revolutionary movement, emphasising innovative financial instruments like the DARES programme.
“These initiatives not only unlock the full potential of the off-grid sector but also fuel investments, propelling forward clean energy solutions.
“The ripple effect reaches unserved and underserved communities, unlocking access to a realm of clean and equitable energy for all. It’s a powerful journey of empowerment and transformation.”
