A multi-donor trust fund managed by the African Development Bank (ADB), Sustainable Energy Fund for Africa (SEFA), has approved a $500,000 grant to support the development and launch of the Nigeria Energy Access Fund (NEAF).
This new private equity fund is developed by All On, a Nigerian impact investment firm financed by Shell.
According to a release signed by the ADB spokesperson, Emeka Anuforo, NEAF will make strategic investments in sustainable energy in Nigeria, particularly in the country’s growing off-grid and mini-grid sectors.
The SEFA grant will support specific workstreams to set NEAF in motion and enhance its engagement with private and public sector investors.
The release also said NEAF will be a first-of-its-kind facility to provide eligible projects and businesses with equity solutions that are currently unavailable in the market.
“Nigeria requires bespoke and innovative market-based solutions to provide its off-grid population, estimated at 100 million, access to sustainable sources of energy. The SEFA grant will be instrumental in the constitution of NEAF, and ultimately, the mobilization of much-needed private sector investment for the sector” the bank’s Acting Vice President for Power, Energy, Climate Change and Green Growth, Wale Shonibare, was quoted as saying.
Once operational, NEAF is expected to complement the bank’s wide range of sustainable energy initiatives currently being implemented in Nigeria.
According to the release, In November 2018, the Board of Directors of the bank approved a $200 million package to support the Nigeria Electrification Project (NEP), designed to help scale-up green mini-grid solutions with subsidies, among other measures.
“In May 2018, SEFA approved a $1.5 million grant to support the first phase of the Nigerian government’s Jigawa 1-GW Independent Power Producer Solar Procurement Program” it said.
SEFA’s support to NEAF is said to be aligned with the New Deal on Energy for Africa and the ADB’s High 5 priorities, especially ‘Light Up and Power Africa’ and ‘Improve the Quality of Lives of Africans.’ The project conforms with the bank’s Energy Sector Strategy and will boost the Nigerian government’s power sector recovery plans.