BoI expands renewable energy funding with N1b solar fund

The acting Managing Director/ Chief Executive Officer, BoI, Waheed Olagunju, who made the announcement in Lagos, said it was important to support the provision of sustainable and reliable energy for the MSMEs.

Indeed, the bank had in 2015, commenced with the provision of long-term financing for the installation of off-grid solar home systems in six communities in a pilot phase, as part of its Renewable Energy Partnership with the United Nations Development Programme.

This, he explained, was why the BoI decided to provide the Solar Energy Fund to the MSMEs.

According to him, the BoI is already playing an active role in lighting up and powering Nigeria through the provision of solar energy solutions for rural communities, having successfully deployed solar solutions worth N240m in six off-grid communities in Niger, Osun, Gombe, Anambra, Edo and Kaduna states, under its pilot scheme.

He said, “These communities with an average of 200 homes each previously had no access to electricity, but since the provision of clean, reliable and sustainable solar electricity, the lives of the indigenes of these communities have changed significantly.”

Olagunju explained that the provision of solar electricity in the communities had reduced energy costs, created more micro businesses, improved health care and quality of education, and generally provided a new lease of life for indigenes of the otherwise unserved communities.

He said, “This initiative is being replicated in other rural communities in collaboration with our development partners, United Nations Development Programme and relevant state governments, and it is now being scaled up to provide energy for the MSMEs across the country, commencing with the N1bn Solar Energy Fund.”

He said the BoI, being a Development Finance Institution, was able to come up with highly concessional funding solutions with interest rate as low as seven per cent and equally flexible terms and conditions.

“This also explains why the BoI is able to partner with the UNDP under which we are able to access increased level of financial support that peaked at $1.2m last year. Blending the grant with the BoI’s debt financing enables us to charge low interest rate,” Olagunju added.

He explained that the projects would be implemented in collaboration with eight solar energy project developers, who had been carefully selected through a competitive and transparent process.

“They will be responsible for implementing the solar projects by providing the MSMEs with solar solutions using appropriate business models,” he added.

Former Director General, United Nations Industrial Development Organization (UNIDO), and former United Nations Under-Secretary General and the Special Representative of the Secretary General on Sustainable Energy for All, Dr Kandeh Yumkella, commended the bank for the move adding that deploying the renewable solution will aid the nation’s industrial growth.

The MSMEs’ growth and development are crucial to the level of industrialisation, modernisation, income per capita, equitable distribution of income, welfare and quality of life enjoyed by the citizenry of any nation.

He, however, lamented that the growth of the MSME subsector in Nigeria had been hampered over the years by a combination of factors, one of which was access to reliable electricity.