USAfrica: Bank of Industry increases its solar energy fund to N6 billion

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Managing Director, BoI, Mr Olukayode Pitan

According to a statement on its website, the Bank of Industry (BoI) has expanded the size of its Solar Energy Fund to N6 billion.

According to the BoI, the Fund was upgraded to allow several end-user categories (commercial and residential) to get dependable solar products.

The Fund was initially introduced in 2017 as a N1 billion Solar Energy Fund for Micro, Small, and Medium-Sized Businesses (MSMEs). The objective was to assist in addressing the difficulties in Nigeria’s power sector.

N6 billion funds: The BoI announced that the Fund’s target market has expanded to include households, businesses (in the agricultural, solid mineral, artisanal, service, and hospitality sectors), project developers (who offer solar solutions for residential estates, educational institutions, and healthcare facilities), and deposit money banks (DMBs)/micro-finance banks. The Fund’s size has increased to N6 billion (MFBs).

End users can obtain the cash directly from BOI or indirectly through Deposit Money Banks (DMBs) or Microfinance Banks (MFBs).

The Fund establishes a threshold of N350 million per end-user for the funding structure. Less than N5 million per user in funding will be provided to micro-users through an on-lending agreement with DMBs or MFBs. Mini-users needing between N5 million and N20 million per end user and standard users needing between N20 million and N350 million per end user would be able to access money through direct financing from BoI for new small and medium businesses (SMEs) and large businesses (LEs). The range for solar energy developers is N20m to N350m.

According to the BoI, implementing the fund is anticipated to result in a cleaner and healthier environment powered by dependable and sustainable energy sources. A decrease in greenhouse gas emissions caused by fossil fuels would help mitigate climate change and promote inclusive economic development.

The Heinrich Boll Stiftung estimates that Nigeria’s off-grid industry for mini-grids and solar home systems will generate $10 billion in yearly revenue and save Nigerian households and companies $6 billion. According to the report on the global off-grid industry, Nigeria is the fifth-largest market in terms of the number of solar items sold. Off-grid solar system sales climbed from $23 million in 2018 to $63 million in 2019, more than doubling in value. The import value is closer to $150 million when associated products are included.

For the record, Mr. Olukayode Pitan, the BoI CEO, stated that the bank acquired a €100 million (N42.20 billion) line of credit through the Transforming Financial Systems for Climate (TFSC) program in conjunction with the Green Climate Fund in August 2022. (GCF).

According to him, the money would support a low-emission transition in Nigeria and finance investments that support climate change adaptation and mitigation measures.

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