Nigerian Government Secures $1.5 Billion Loan To Establish Solar PV Projects

The Federal Government of Nigeria and the US-based renewable energy firm Sun Africa have inked a contract for the engineering, procurement, and construction (EPC) of 5,000 MW of solar production capacity and 2,500 MW/h of battery energy storage capacity.

More than 30 million people will have access to clean and affordable electricity thanks to the power plants, which will be distributed among the six geographical zones of the nation.

According to a statement made by the Federal Government on its official Twitter account, the deal was reached during the most recent US-Africa Business Forum.

FG and Sun Africa LLC signed a development and Engineering, Procurement and Construction (EPC) implementation framework agreement for the construction of 5,000 MW of solar generation & 2,500 MWh of battery energy storage power plants for up to $10bn investment from the US govt. pic.twitter.com/Z7uJxL5uz1

— Government of Nigeria (@NigeriaGov) December 18, 2022

The Federal Government claims that the American government will invest $10 billion to fund the project.

A portion of the money comes from a $1.5 billion loan Nigeria received from the Exim Bank, an American export credit organisation.

It was revealed in August 2022 that the Federal Government had obtained a $1.5 billion loan from the US-Exim Bank to expand the nation's solar power infrastructure in ten distinct areas.

Nigeria is one of the solar markets that is expanding the fastest, according to a 2021 analysis of the country's solar business that was put up by the Netherlands Enterprise Agency.

Nigeria has a fairly even distribution of solar radiation, with a maximum of 19.8 months of solar radiation modified by rainfall (MJm2/day).

According to the analysis, the off-grid sector in Nigeria for mini-grids and solar home systems is expected to generate $10 billion in revenue yearly and save Nigerian households and companies $6 billion.

The study also emphasises how sales of off-grid solar systems (50-100W output) climbed in value by more than twice as much from $23 million in 2018 to $63 million in 2019.

The import value is closer to $150 million when including associated goods.