The Bank of Industry (BoI) and All On have agreed to establish a N1billion 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 year (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, small and medium enterprises (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.
Speaking at the signing ceremony for the agreement, BoI Managing Director, Mr. Olukayode Pitan, 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 to achieving industrialisation, 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.”
Chief Executive Officer, All On, an off-grid energy investment company backed by Shell, Dr. Wiebe Boer, said: “We are excited to partner the Bank of Industry on the Niger Delta off-grid energy fund because of their reputation as a leading development finance institution and their deep experience as one of the earliest investors in the 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.