The Nigerian Sovereign Investment Authority (NSIA) and the International Finance Corporation, a member of the World Bank Group, are shopping for $500 million for the development of renewable energy in Nigeria.
The Managing Director and Chief Executive Officer of NSIA, Mr. Aminu Umar-Sadiq, stated this at the launch of NSIA’s Renewable Investment Platform for Limitless Energy (RIPLE) and the official signing of a collaborative agreement between NSIA and the International Finance Corporation (IFC) in Abuja over the weekend.
Mr. Sadiq said that both NSIA and the IFC are committing $25 million each as initial capital to get the project off the gound.
He said the launch of RIPLE is a watershed moment in terms of actualising some of NSIA’s ambitions in the renewable energy space, adding that RIPLE is one of the new companies in NSIA’s foray into the financial market infrastructure.
He also noted that the new platform joins a long list of accomplishments that NSIA has actualised in terms of solving some of the value dislocations in Nigeria’s infrastructure sector.
He said that NSIA would be focusing in three areas as it relates to RIPLE, the first one being diesel displacement; franchising and the third, backward integration towards solar panel (PV) manufacturing in Nigeria so that the country can locally produce PV models that will be required for mass renewable energy use in the country.
While describing the partnership with IFC as strategic, Sadiq said, “The IFC is also co-developing transaction a franchise project, a 70 megawatts renewable energy project in Kano State and it is off the back of the success of that project that we would then embark on a roadshow in other to raise a capital of $500 million.”
On the time for the implementation of the project, the NSIA boss said, it would take between three to four years because certain things are not within their control.
He said the role of NSIA in the project goes beyond just being a financial investor. According to him, “NSIA always takes on the role of being a co-sponsor or a co-developer. What we do is we determine the value dislocation of the infrastructure subsector in Nigeria and we have the audacity to work with like-minded strategic partners to conceptualize solutions to meet those challenges. So our role goes beyond just providing capital but also creating sustainable and impactful solutions for Nigeria.”
Also speaking, IFC’s Regional Manager, Africa, Mr. Dan Croft, said the interest of IFC in the project is that it is interested in working with credible partners that 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.
He said IFC does not have an upper limit in its financial commitment to the project, noting that what IFC is working on is the early stage development capital, “but whenever we do this, the need for a long term investment arises, we are not interested in just the upfront seed, in fact if there is no long term arising, we don’t do the first bit either,” he said. “What we are looking at is enough capital on percentage share basis to get the project moving and as more projects enter, more funding will follow. Essentially we don’t have an upper limit in what we will be financing in this project our problem is finding an opportunities to do so and we are happy we found a credible partner in NSIA.”
The RIPLE programme lead, Mr. Yusuf Umar said the project will cut across the six geopolitical zones of the country.
“We are starting from Kano, next we will go to Abuja,” he said. “Our intention as an agency owned by the federal government, is to have a footprint across the country.
This project covers everything renewable, solar, wind and even mini hydro. We want to ensure that Nigerians have access to clean energy that is also efficiency because we have to use the resources that we have, and then we need to ensure that as Nigerians we are self sufficient in terms of providing for our energy needs.”
The event also witnessed the official signing of the collaborative agreement between NSIA and IFC.