From Isaac Anumihe, Abuja
Rural Electrification Agency (REA) has said that it needs $1.9 trillion exchange-trade products (ETP) security to enable it electrify the rural communities.
Speaking to newsmen at the weekend, in Abuja, the Managing Director of the agency, Engineer Ahmad Salihijo, added that on annual basis, the agency would require $10 billion.
For the renewables, REA needs about $300 million and it is cascaded down to about $82 billion to decentralise power.
“So, what we are going to demonstrate is that as an agency under the Federal Ministry of Power we are in a position to accept private sector funding. We already have a commitment of about $10 billion which we are going to showcase that we are ready to implement the project of this magnitude.
“As an agency we have been able to look through each and every module and we are in a position to attract additional financing to ensure that we reach our target. As part of the ETP, what we have as a requirement for next year is $1.9 trillion where we need $10 billion annually. According to the Rural Electrification Strategy Implementation Plan, we need about $300 million of renewables while that is cascaded down to about $82 billion to decentralise power. So, what we are going to demonstrate is that as an agency under the Federal Ministry of Power we are in a position to accept this sort of funding. We already have a commitment of about $10 billion which we are going to showcase that we are ready to implement projects of this magnitude” he said.
According to the MD, rather than wait for the budget, REA reached an agreement with the private sector to identify communities not connected to the mini grids and electrify them on a subsidy of 60 per cent to 40 per cent basis.
“We pay 60 per cent to every household. To every household or to every Small and Medium Enterprises (SME) or public institution we give a naira equivalent of $600” he said.
One company, Ahmad said, can have 10 agreements which is an agreement per community for the mini grid end.
“Only 67 mini grids have been completed out of 667 agreements. So, we still have a lot more achievements to expect or outcomes to expect. A lot more mini grids will be developed through these companies who secure the finance to invest in these mini grids before we provide the right funding” the MD, noted, adding that apart from the mini grid component, the agency has other components which include solar hybrid, solar home system, energgise education programme and technical aid systems.
Meanwhile, REA is an implementing agency of government under the Federal Ministry of Power that has the mandate of taking power to, especially, the underserved Nigerians.
“How we go about doing this depends on when funding comes up. According to the Rural Electrification Strategy Implementation Plan, we have targets to reach Nigerians everywhere in the country and this number is about 80 million or so. If you look at what our mandate says and how we must achieve that there’s a lot of requirements and a lot of funding.
“What we are used to is that we have an agency that every year, you wait and get government money from the budget; go to the project or go to site, implement and then deliver on those projects.
However, if we were to do this, in the next 100 years, I can tell you for free that we will not be able to make those achievements. Within that five-year plan it was very important to ensure that the mandate doesn’t only end at the implementation stage because as part of the Electric Sector Reform we administer the rural electrification fund which is a private-sector driven initiative. So, we have to think of REA not only as an implementer but also as a hub and an enabler to ensure that funding is coming from various areas within the private sector; within the international development partners so that we can deliver on our mandate. So, that being said, we have to design programmes to attract more or less private sector financing” he said.