According to a statement on its website, the Bank of Industry (BoI) has increased its Solar Energy Fund to N6 billion.
According to the BoI, the Fund was revised upwards to enable various end users (commercial and residential) to obtain dependable solar solutions.
The Fund was first established in 2017 as a N1 billion Solar Energy Fund for micro, small, and medium-sized businesses. The goal was to address the challenges in Nigeria’s power sector.
N6 billion Fund details
The BoI said the target market has expanded to include households and businesses (agribusiness, solid minerals, artisans, service and hospitality industries), project developers (providing solar solutions for residential estates, educational facilities, and healthcare facilities), and deposit money banks (DMBs)/micro-finance banks.
End users or solar energy companies can obtain funds directly from the BOI or indirectly through Deposit Money Banks (DMBs) or Microfinance Banks (MFBs).
Funding structure
The Fund sets a cap of N350 million per end user. Micro-user funds of less than N5 million per user will be distributed through an on-lending arrangement with DMBs or MFBs. Mini-users requiring between N5 million and N20 million per end user, and standard users requiring between N20 million and N350 million per end user, will be able to access funds from the BoI through direct lending. The limit for solar energy developers will be between N20 million and N350 million.
Projected Impact
According to the BoI, implementing the fund will result in a cleaner and healthier environment through reliable and sustainable energy sources. Reduced greenhouse gas emissions from the use of fossil fuels help to mitigate climate change while also boosting inclusive economic growth and development.
Off-grid market
According to Heinrich Boll Stiftung, Nigeria’s off-grid market for mini-grids and solar home systems is expected to generate $10 billion in revenue and $6 billion in savings for Nigerian homes and businesses yearly. According to a global off-grid market report, Nigeria is the fifth largest market in terms of the volume of solar products sold. The value of off-grid solar system sales more than doubled from $23 million in 2018 to $63 million in 2019. The total import value approaches $150 million when related products are included.
For the record
Mr Olukayode Pitan, the Chief Executive of BoI, announced in August 2022 that the bank had accessed a €100 million (N42.20 billion) line of credit through the Transforming Financial Systems for Climate (TFSC) program in collaboration with the Green Climate Fund.
He stated that the funds would be used to finance investments that contribute to climate change mitigation and adaptation measures and promote a low-emission transition in Nigeria.
