The Rural Electrification Agency (REA) has unveiled its Rural Electrification Fund (REF), a scheme to provide funding rural power projects done by private investors to ensure 60 percent of Nigerians are connected to electricity by the year 2020.
The Managing Director, Mrs. Damilola Ogunbiyi at a stakeholders’ workshop on Thursday in Abuja on the Fund said it will create an enabling environment for the private sector participation to provide more access to electricity for rural dwellers.
She noted that her agency targets energizing 60 percent of rural areas which involves connecting 1.1 million rural households every year since 2015 to 2020.
The agency recently completed the guidelines for the operation of the REF which will allow private rural power developers, NGOs, and communities to get a capital subsidy from N3.5 million (about $10,000) to N106m ($300,000) to cover 75 percent of the project cost.
According to the Rural Electrification Strategy and Implementation Plan (RESIP) document obtained at the workshop, the implementation for the year 2020 target will range from N311 billion to N519bn.
The Fund will be put into a Trust that will manage the disbursements under a contract agreement.
The Daily Trust reports that the agency has sought the public to bid for this before Monday, December 11, 2017.
In his address, the Minister of State II, Ministry of Power, Works and Housing, Mr. Suleiman Hassan Zarma said the fund is meant to boost access to rural electrification to raise economic activities in rural areas.
The minister said the REF will be funded through budgetary allocations, international funding, and private sector financing which will be disbursed to private partners for such projects.
The Director of Promotions at REA, Mr. Ayang Ogbe, in his remark, said Section 88 of the Electric Power Sector Reform Act (EPSRA) 2005 empowers the agency to use REF mechanism to promote grid extension so that the private sector can also be involved.
The Chairman, House of Representatives Committee on Power, Mr. Daniel Asuquo said if the programme is properly carried out, it will help to drive the power sector growth.
He urged the agency to drive the process such that cottage industries in rural areas can be driven through the electrification projects.