- PowerGen is to build 28 DRE projects comprising solar PV and battery energy systems in Nigeria
- It will provide clean and reliable electricity to 55,000 Nigerians in residential, commercial and productive-use customers
- CBEA will take over the projects on completion, while PowerGen will continue to operate the same
- Oikocredit, Triodos IM and EDFI ElectriFI have provided construction financing
Kenya headquartered on-grid and off-grid distributed energy developer PowerGen will build 28 distributed renewable energy (DRE) systems as solar PV and battery-powered mini grids to provide clean and reliable electricity to 55,000 people in Nigeria, in residential, commercial and productive-use customers.
For this it has secured long term project financing from CrossBoundary Energy Access (CBEA) that plans to purchase the entire portfolio on completion, while PowerGen will continue to act as long-term operator of the same.
Construction financing for the projects, amounting to $9 million, is to be provided by social impact investor Oikocredit, Triodos Investment Management (Triodos IM) and EDFI ElectriFI (the EU-funded Electrification Financing Initiative).
PowerGen said this is a ‘1st’ for mini-grids in Africa at this scale. It has already commissioned 6 sites through a special purpose vehicle (SPV) which the company believes will help the denizens of Africa’s largest economy to deal with poor energy access, particularly in rural areas where only 25% have access to electricity forcing them to depend on harmful and expensive diesel generators and kerosene.
“We continue to believe that mini-grids are a key tool for bringing power to over 200 million people in Africa, and this project finance structure is the best way to attract the $187 billion of investment that these assets need,” said CBEA’s Associate Principal Humphrey Wireko. “We see this as the first of many such financings that CBEA plans to do in Nigeria.”
According to PowerGen, the project is supported by grant funding from the World Bank and Nigeria Rural Electrification Agency’s Nigeria Electrification Project (NEP).
In a 2019 report on mini grids, the World Bank estimated 210,000 of mostly solar-hybrid mini grids to serve electricity needs of 490 million by 2030, towards achieving universal energy access (see Mini Grids To Reduce Energy Access Gap: World Bank).
Nigeria has included solar home systems (SHS) in its Economic Sustainability Plan to emerge stronger from the COVID-19 related downturn (see Nigeria Wants Solar Home Systems For 5 Million Homes).