Dubai-based company to supply 80 million Nigerians electricity using renewable energies

By Hauwa Ali

Dubai based financing consultants, Barika and Kraft has successfully raised over 60 Million US dollars in their third funding round to fund renewable energy and efficient energy projects in Nigeria, which would guarantee electricity supply to over 80 million Nigerians who are currently without power supply. 

The company who announced this in a statement on its website on Monday, said that the aim of the project is to combat energy shortage in the country using renewable sources.

Barika and Kraft stated that they are committed to sponsoring projects that were innovative, technically eligible, energy efficient and renewable.

In recent years finance for renewable energy projects has remained a challenge. Projects either tend to fail or face significant delays in development and construction due to burdensome and time-consuming negotiations and insufficient expertise. As renewable energy projects involve important capital expenditures, the cost of debt at the construction level also often has a disproportionate effect on their financial viability.

The President, Manufacturers Association of Nigeria (MAN), Mansur Ahmed, while wel coming the initiative, said that the poor state of energy service over the years had constrained the manufacturing sector, leading to its low level of competitiveness globally.

According to him, it would reduce the cost of doing business in the country, and urged manufacturers to take advantage of the funding facility.

Nigeria is Africa’s most populous country and third largest economy with growing energy needs that the national grid cannot meet fully or reliably. To increase access to electricity and economic opportunity and decrease fossil fuel dependency and greenhouse gas emissions, Nigeria seeks to exploit untapped potential in solar power and energy efficiency.

Nigeria has developed a CTF (Clean Technology Fund) investment plan for an expected $250 million to contribute to national strategies for sustainable, low carbon development. Projects include bus-based urban transport improvements in the cities of Lagos, Kano, and Abuja, and a financing facility to catalyze private sector investment for renewable energy and energy efficiency across various industries.

CTF concessional financing is also supporting a pioneering project that aims to demonstrate utility-scale solar PV deployment using independent power producer structures under public-private partnerships, contribute to knowledge and technology transfer, and promote a conducive enabling environment for future investments.

Similar to Climate Investor One – CIO which was a financing instrument developed in cooperation with the EU. Barika and Kraft combines a Development Fund, a Construction Equity Fund and a Refinancing Fund into one innovative “capital recycling” facility targeting wind, solar and run-hydro projects. 

Barika and Kraft seeks to mobilize blended finance provided by donors and the commercial sector with its additional recycling feature to maximize impact and reduce risk in markets where development is needed and climate change solutions can have a significant and sustainable effect.

The financing plans include investing in medium-size projects of between 25MW and 75MW. Upon fruition It is expected to deliver a significant development and environmental impact, producing an expected 1,133 MW of additional capacity that will reach some 7 million people. Participating in these projects, will avoid greenhouse gas emissions by ca. 1.8 million tonnes CO2-equivalent per year and will result in the employment of around 34,000 people. Its innovative financial structure will also help to prove a cross-sector potential, inspiring new approaches to financing in infrastructure sectors.

Aligned with The Nigeria Renewable Energy Programme (NREP), the initiative is expected create access to affordable sustainable energy in Nigeria by focusing on centralised energy solutions, including off-grid programmes and financing over 150+ MW of additional capacity

To conclude, Mr. Chiziterem – Founder and CEO of Forle Limited –

“The importance of improving finance channels to accelerate the adoption of renewable energy resources cannot be overemphasized. Our need to create a more viable alternative and achieve net-zero will come at a cost which we must all pay rapid attention to.”