Friday, December 9 2022 Sign In   |    Register

News Quick Search



Front Page
Power News
Today's News
Yesterday's News
Week of Dec 05
Week of Nov 28
Week of Nov 21
Week of Nov 14
Week of Nov 07
By Topic
By News Partner
Gas News
News Customization


Pro Plus(+)

Add on products to your professional subscription.
  • Energy Archive News

    Home > News > Power News > News Article

    Share by Email E-mail Printer Friendly Print

    Account holders to explore N7.5tr off-grid power market

    October 4, 2022 - The Nation


      The Central Bank of Nigeria's (CBN) policy on off-grid power companies operations presents an opportunity for prospective account holders to explore the benefits of being included in the financial services sector.

      The number of new account openings by grassroots customers and micro, small and medium enterprise are expected to increase as the apex bank intensifies plans to activate N7.5 trillion market share for off-grid power companies being integrated into the financial services sector to boost energy access, promote financial inclusion and poverty reduction.

      Yellow Page mobile

      In a guideline for the off-grid power companies'operations, the apex bank said energy access, financial inclusion and poverty reduction are linked and requires rapid scale of pay-as-you-go (PAYG) off-grid technologies to create trillion-naira yearly market opportunity for the country. It said the market penetration is at less than five per cent of total market potential.

      The investment and credit opportunity from the CBN under the Solar Connection Intervention Facility will lead to new account openings by many Nigerians. It will also enable commercial banks to provide more high quality financial products, such as savings, credit, insurance, payments and pensions, which are relevant, appropriate and affordable for the adult population, especially the low-income earners.

      Speaking on the plan taboos grassroots banking through power sector businesses, the President, Bank Customers Association of Nigeria (BCAN), Uju Ogubunka, earlier said the off-grid power scheme would lead to massive account opening, and reactivation of dormant accounts by new players in the market.

      He said the conditionalities of the market, entry requirements and capacity to deal with power problems would determine how many people would enter the market and those that would open and reactivate dormant accounts.

      'If the capital needed to get into into the market is not too high, many people will avoid it. In such case, the major players will be those who are already in businesses making money and wanting to diversify. But if the entry requirement is simple, it will see more grassroots participation and massive job creation,' Ogubunka, a former Registrar/Chief Executive, Chartered Institute of Bankers of Nigeria (CIBN), said.

      According to him, more capital flows into the economy from offshore investors, which will galvanise economic activities for economic boom.

      He said evidence worldwide shows that access to financial services contributes to growth and wealth creation and is, therefore, key to tackling the 'poverty' trap in Nigeria.

      He said it is critical for regulators and policy makers to create an enabling policy environment to actively promote the demand for and the supply of financial services to the unbanked and under-banked.

      The facility will be administered at an 'all-in' interest rate of not more than nine per cent yearly. However, as part of the CBN's COVID-19 relief package, the interest rate to be charged up to February 28, last year will not exceed five per cent per year. Interest shall be payable by the loan beneficiaries in accordance with the approved repayment schedule outlined in the transaction documents.

      The scheme will enable the manufacturing of solar components and balance of system, establishment/expansion/upgrade of solar manufacturing facilities, assembly of solar components and balance of system and repairs and maintenance of solar home systems and mini-grid equipment.

      Also, to support the economic recovery in response to the COVID-19 pandemic, the Federal Government is implementing the Economic Sustainability Plan (ESP) to ensure the roll out of five million new solar-based connections in communities that are not grid connected. This programme is expected to generate an additional N7 billion increase in tax revenue yearly and $10 million in annual import substitution.

      The solar connection scheme is a Federal Government initiative meant to expand energy access to 25 million individuals (five million new connections) through the provision of solar home systems (SHS) or connection to a mini-grid; increasing local content in the off-grid solar value chain and facilitating the growth of the local manufacturing industry; and incentivising the creation of 250,000 new jobs in the energy sector.

      Interventions in energy sector

      CBN recently released data on N1.63 trillion interventions in the energy sector in the face of consistent electricity grid collapse in the country.

      In the CBN's report on energy/ infrastructure interventions, the apex bank said as at May, last year, it released N15.71 billion to power sector players, including generation companies (GenCos) and gas companies (GasCos).

      The funds came under the Nigeria Bulk Electricity Trading Plc - Payment Assurance Facility (NBETPAF) - bringing the cumulative disbursement under the facility to N1.30 trillion.

      Also, N22.67 billion was also released to Distribution Companies (DisCos) for their Operational Expenditure (OpEx) and Capital Expenditure (CapEx), under the Nigeria Electricity Market Stabilisation Facility - Phase 2 (NEMSF-2).

      Cumulative disbursement under the NEMSF-2 stands at N251.93 billion.

      Also, under the National Mass Metering Programme (NMMP), the bank has disbursed N0.19 billion to DisCos for the procurement of electricity meters, bringing the cumulative disbursement for the procurement and installation of 865,956 meters across the country to N47.82 billion.

      Interventions in energy/infrastructure are designed to improve investment and develop enabling infrastructure in the Nigerian electricity supply industry.


    Other Articles - International


       Home  -  Feedback  -  Contact Us  -  Safe Sender  -  About Energy Central   
    Copyright © 1996-2022 by CyberTech, Inc. All rights reserved.
    Energy Central® and Energy Central Professional® are registered trademarks of CyberTech, Incorporated. Data and information is provided for informational purposes only, and is not intended for trading purposes. CyberTech does not warrant that the information or services of Energy Central will meet any specific requirements; nor will it be error free or uninterrupted; nor shall CyberTech be liable for any indirect, incidental or consequential damages (including lost data, information or profits) sustained or incurred in connection with the use of, operation of, or inability to use Energy Central. Other terms of use may apply. Membership information is confidential and subject to our privacy agreement.