The Bank of Industry and All On have announced the establishment of a N1 billion Niger Delta Off-Grid Energy Fund.
The fund will provide local currency debt financing to facilitate the deployment of energy solutions by access-to-energy companies in the Niger Delta at 10 per cent interest rate per annum (with a one-year moratorium) and tenor of up to seven years.
The objective of the fund is to stimulate the growth and geographic spread of off-grid energy businesses in the Niger Delta to enable households, SMEs and communities have access to clean, affordable and reliable power solutions.
In the Niger Delta, the majority of the population reside in rural areas and only 34 per cent of these have access to reliable grid power.
The result is that SMEs in the region use expensive and inefficient diesel and petrol generators, increasing their operational costs, families cook with firewood or kerosene, while children study with flashlights or candles with the attendant negative health and safety concerns.
The provision of clean, affordable and reliable sources of energy is therefore essential for improved economic activity and livelihoods of the people of the region, a statement by All On on Monday said.
Speaking at the signing ceremony for the agreement, Olukayode Pitan, Managing Director, BOI, a foremost Development Finance Institution in Nigeria, said: “Bank of Industry keeps seeking and exploring strategic partnerships with reputable institutions like All On in developing sustainable solutions to facilitate social and industrial development.
“Power is a critical resource towards achieving industrialization, and is also a major cost driver for SMEs in Nigeria.
“We are therefore particularly pleased with this partnership as the deployment of this fund will provide clean energy at affordable interest rate and friendly conditions not only to SMEs, but also to households and communities in the Niger Delta region of the country.”
According to Dr. Wiebe Boer, the CEO of All On, a Nigerian off grid energy investment company backed by Shell: “We are excited to partner with the Bank of Industry on the Niger Delta Off-Grid Energy Fund because of their reputation as Nigeria’s leading Development Finance Institutions and their deep experience as one of the earliest investors in the Nigerian off grid energy sector.
“This partnership will go a long way to encourage off grid energy companies to deploy in the Niger Delta and address the massive access to energy gap in the region.”
The N1 billion fund is funded equally by the two institutions but will be operated by the Bank of Industry.