Nigeria and a United Nations agency have set a $500 million target for a fund to finance the roll out of so-called distributed renewable energy, such as solar home systems and mini-grids.
The fund backed by the Nigerian Sovereign Investment Authority and the UN’s Sustainable Energy For All organization, known as SEforALL, will be managed by Africa50, an infrastructure investor established by the African Development Bank.
Nigerian pension funds will also invest, according to Damilola Ogunbiyi, SEforALL’s Chief Executive Officer (CEO).
The aim is to put together a “fund that would be accessible and will be in local currency for local developers,” she said in an interview in Cape Town on the sidelines of the Finance in Common Summit, a global gathering of development finance institutions.
The fund is linked to the Mission 300 program led by the World Bank and the AfDB with the aim of providing electricity to 300 million people in Africa by 2030.
The initiative will provide tens of billions of dollars to countries that meet certain conditions including reforming power utilities and adapting regulations to encourage private investment in the power sector.
Other renewable investment in Nigeria
Separately, Africa50 is also setting up a $200 million fund to be known as the Africa Solar Facility, to invest in distributed renewable energy projects across the continent and sponsored by the International Solar Alliance.
Mini-grids and solar home systems are seen as a way of getting electricity to settlements and rural areas far away from national grids.
More than 80% of the people in the world without access to electricity, or 570 million people, live in sub-Saharan Africa, and 86 million of them are in Nigeria.
The funds are meant for The Alliance for Green Infrastructure in Africa fund which is dedicated to off-grid power companies that are part of a major push toward sustainable energy solutions. It will also target sectors ranging from renewable energy to transport that limits greenhouse-gas emissions.
Africa50 continues to expand its investment footprint with three flagship platforms: Africa50-Project Development, Africa50-Project Finance, and the Africa50 Infrastructure Acceleration Fund.
With $2.3 trillion in institutional capital across Africa, Africa50 is aiming to mobilize even more resources for infrastructure projects.
It is worthy of note that over the past seven years, the firm has invested in 28 projects spanning 27 African nations and now manages assets worth $1.1 billion.
