Nigeria Infrastructure Debt Fund (NIDF) will finance Chapel Hill Denham N1.8billion to construct 22 minigrids under the Nigeria Electrification Project.
NIDF will provide Havenhill long-term financing of $4,7million (N1.8billion) to part-finance the roll out of the minigrids. The solar minigrids will connect 70,000 people, along with other establishments in the host communities to clean, reliable energy supply.
According to the National Bureau of Statistics access to reliable electricity in the country is relatively low, with a rural electrification rate still hovering around 39%.
In 2019, the International Monetary Fund (IMF) also estimated that a lack of access to reliable electricity costs Nigeria an estimated $29 billion annually.
The inability of the owners/operators of the main electricity grid to connect rural communities and provide them with reliable power supply has further amplified the need for decentralised energy systems and other clean alternatives. Havenhill is addressing these challenges by deploying smart solar minigrids to commercially viable rural communities across the country.
Anshul Rai, NIDF CEO, said it was quite fulfilling to note the Fund is playing a significant role in improving energy access in Nigeria.
“NIDF prides itself in being the leader in financing of clean energy and energy access projects in Nigeria and thus contribute to the achievement of UN’s Sustainable Development Goals. In multiple projects, such as Havenhill, our unit-holders can see their capital in action and generating not only financial returns but also making a strong, positive impact on the daily lives of their fellow citizens”, Rai said.
Nigeria Electrification Project turning to minigrids for remote communities
Rai disclosed that financing of the project will be funded from the NIDF’s recently concluded Series-7 capital raise, which also involved the participation of African Development Bank (AfDB).
“With the support of AfDB, NIDF is also implementing a comprehensive Environmental & Social Management System for the fund and supporting its borrowers to adopt the international best practices in the area of environmental and social sustainability,” he added.
Wale Shonibare, AfDB Director of Energy Financial Solutions, Policy & Regulation, described the investment in the project as a welcome development that would assist in complementing its role to the sovereign loan offered to the Federal Government of Nigeria which is targeted at supporting the implementation of the Nigeria Electrification Project.
While expressing his satisfaction with the outcome, the CEO of clean tech utility company Havenhill, Olusegun Odunaiya stated it was exciting to have NIDF as a long-term partner for the minigrids roll-out project.
According to Odunaiya, the NIDF team’s commercial savviness has enabled it to implement a highly innovative financing structure that fully addresses the peculiarities of the project and, therefore, ensure its long-term success.
“This milestone serves as a renewal of Havenhill’s commitment to powering Nigeria’s most remote communities and delivering last-mile electricity connections. These minigrids will catalyse economic activities in host communities, serve healthcare facilities and overall deliver a transformative multiplier effect,” said Odunaiya.
Havenhill is also currently pioneering a new structure for powering healthcare facilities through the electrification of 23 healthcare facilities under its Energising Healthcare Initiative in partnership with USAID’s Power Africa Off-Grid Project (PAOP) and United States African Development Foundation (USADF).