Nigerian Sovereign Investment Authority (NSIA) in partnership with the International Finance Corporation ( IFC) World Bank’s investment outlet is committing $500 million to renewable energy projects in Nigeria.

NSIA’s intervention in renewable energy is being carried out via its latest outlet – Renewables Investment Platform for Limitless Energy (RIPLE). Under RIPLE, the Authority in conjunction with IFC would be undertaking a pilot initiative located within the Tokarawa Industrial Hub in Kano State

It involves setting up a generation and distribution system to meet 70MW of unsuppressed energy demands of industrial activities, commercial enterprises, and residential customers in an area covering about 9,000 connections.

The project will be extended to other parts of the country in the course of time.

NSIA and IFC signed a formal agreement on renewable energy over the weekend in Abuja. The agreement entails NSIA committing $25 million as a seed investment to the project.

Speaking to reporters at the event sidelines, Managing Director/ Chief Executive Officer of NSIA, Mr Aminu Umar – Sadiq described the moment watershed.

“I think this is a watershed moment for the renewable energy space in Nigeria. We are hoping that this fund we are targeting, about $500 million will focus on renewable energy space in general. The strategy is in three folds.

“The first is around diesel displacement, the second is around franchising in general, and then the third is around the backward integration towards PV manufacturing in Nigeria ”

“Naturally, we start with a proof of consent project with baby steps. However, as always the ambition of the NSIA and the IFC as it relates to this fund, is to scale up; to be able to go large.

“We are hopeful that in the course of time, we’ll begin to feel the impact of projects that we are co-developing as well as co-executing for the benefits of Nigeria and Nigerians”, explained NSIA MD.

Speaking about funds commitment, he said $25 million was pledged by the NSIA as committed capital. The IFC, he added was also co-developing transactions up north by a franchise project of 70 megawatts in Kano state. He estimated the project should be delivered within a space of three to four years.

” There are a number of important considerations within your control and there are also a number out of your control. Typically in executing a large-scale infrastructure project, you are talking about three to four years. We are hopeful we should be able to implement a couple of our initial projects within that time.

“Upon the conclusion, by the time we’ve basically gone very far in implementing our first couple of projects, and we have a proof of consent in terms of the portfolio of projects that we can show external investors, then we’ll embark upon that we looking at about two to two and a half years”, he said.

Sadiq was confident Nigeria will overcome her power challenge.

” We are investors but by the grace of God that is the ambition- to be able to meet our power deficit through the generation of sustainable, renewable energy in Nigeria”.

Speaking in an interview, Mr Dan Craft, IFC Regional Manager ( Africa)  underscored IFC’s interest on the renewable energy project in Nigeria.

“We are pretty much interested in everything you heard in that speech- access, efficiency, security, all on a climate-friendly basis. Our interest in the project is, working with credible partners who are committed to the long term to develop a project on a fully sustainable basis, delivering the most cost-effective power, as clean as possible. It’s all good. This is our interest in the project. We would love to find more partners like NSIA, but they don’t grow on trees”.

” At this early stage, what we’re working on is, development capital to seed the platform. But whenever we do this, it’s with a longer-term investment horizon. We’re not interested in just the upfront seed.

“In fact, if there is no long-term horizon, then we don’t do the first bit either. So what we’re looking at, is enough on a percentage share basis to get the thing moving. And then as more projects enter, the funding will follow.

Essentially, we don’t really have an upper limit for what we would like to finance in this space. Our problem is finding the opportunities to do so, which is why we’re so excited about this”, said IFC Regional Manager.

He said investment in renewable energy isn’t a new terrain as according to him, “We have done a number of renewable energy investments in solar and wind and hydro and transmission and distribution”.

“Like I said when I was speaking, it’s about finding the right way into the market. Bringing any of those solutions off the shelf doesn’t tend to work. This is the first step.

And as far as I know, certainly on the African continent, this is the first one of these we’ve done in terms of a platform”, he said.