An AfDB financial investment project that seeks to provide a seven-year line of credit to a local bank to facilitate renewable energy (RE) and efficient energy (EE) projects in Nigeria.
In a country where only 40% of urban and 10% of rural residents have access to electricity, the Government of Nigeria has adopted an ambitious renewable energy agenda that will catalyze low carbon private investments and transform the country’s energy landscape. Nigeria aims to have 20% of the energy supply be renewable energy by 2030. Despite the potential of renewable energy projects, many Nigerian financial institutions lack experience evaluating and investing in green technologies.
In 2014, the Line of Credit for Renewable Energy and Energy Efficiency Project was approved with a CTF allocation of $25 million, and will support targeted capacity building to address market barriers and accelerate low-carbon investments in the private sector. The project will cost approximately $50 million, and will enable Nigeria to cut greenhouse gas emissions while providing for renewable and reliable energy its population.
Objectives and Outputs:
The main objective of the project is to extend a seven-year line of credit to Nigerian banks for private sector investments in RE and EE projects. CTF resources will allow the AfDB to provide appropriate access to financing in volume and pricing to banks that would promote investment in RE and EE projects. Direct beneficiaries include financial institutions and the private sector, which will benefit from longer lines of credit, as well as the country’s economy, which will benefit green economic opportunities. Women who own their own business and projects will receive special financing from Nigerian banks. Furthermore, the project will demonstrate replication potential and lessons learned for other countries pursuing similar RE/EE projects.
As of 2014, the AfDB has identified a pipeline for four projects, which will cost an estimated $300 million, with support from CTF and AfDB lines of credit. The four projects include a solar photovoltaic (PV) farm, 4 MW and 2 MW biomass thermal generation plants, and an electricity distribution grid. CTF and AfDB line of credit will help make the four projects, as well as future RE and EE projects possible. Overall, the project’s investments are expected to result in the reduction of about 158,580 tons CO2 per year and total of 4,940,040 tons CO2 over its lifetime, as well as provide a newly installed energy capacity of 107 MW.
This project summary is drawn from draft project proposals [such as the PAD, PID, SAR, and country investment plan] and may not contain the most up-to-date information.
Project Document | Extension Notification | Proposed Decision
Approved on April 11, 2014 (Approved Decision)
USD 25.0 million