Nigerian Manufacturers Eye Lower Output Costs with €70m Energy Facility

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By Chineme Okafor

Manufacturers in Nigeria can reduce their energy cost by about 40 per cent if they key into a new €70 million renewable energy and energy efficiency facility backed by the French Development Agency (AFD) and European Union Infrastructure Trust Fund (EU-ITF), THISDAY has learnt.

The facility – the Sustainable Use of Natural Resources and Energy Finance (SUNREF), is a green financing line for businesses. It was developed by the AFD and EU-ITF to give technical assistance for the development of green energy projects in Nigeria and support the country’s manufacturers to adopt proactive energy efficient practices.

SUNREF was recently launched in Nigeria with the €70 million portfolio respectively segmented into €60 million funding and €9.5 million investment grant for renewable energy and energy efficiency projects.

Through the grant, the SUNREF Nigeria programme will provide technical assistance to support the Manufacturers Association of Nigeria (MAN), partner banks – Access Bank and the United Bank for Africa (UBA), as well as medium scale companies in Nigeria towards the development of energy efficiency (EE) and renewable energy (RE) projects.

“It is going to vary from member to member depending on their energy usage, but in most cases when somebody will go into your company and do energy audit and see what can be done, most people can save at least, it is always usually 30 to 40 per cent; and they are not unusual in terms of energy savings, both from the energy efficiency side and some renewable energy systems that can be applicable,” said Javier Betancourt, who is the Team Leader for the SUNREF Nigeria Programme during a webinar to launch the programme.

Betancourt, further explained that while it is difficult to give a particular number on how much cost members of the MAN could save in this regard, he added, “we think that anybody that isn’t saving 30 to 40 per cent really hasn’t structured this project appropriately because there is so much that can be done.”

He noted that: “There is so much space on the energy efficiency side which is needed by everyone in Nigeria and the renewable energy side where we can do solar photovoltaic or biomass. There is so much solutions out there that really the manufacturers association can be satisfied to get.”

According to the SUNREF team, in Nigeria where access to energy is far from universal, limited energy security and rising energy prices will likely continue to challenge the growth of Nigerian businesses in the near future.

They stated that: “As a result, increasing the development of green energy is a key condition to a sustainable economic growth by ensuring reliable access to energy as well as enabling businesses and households to seize the opportunities of the ecological transition.”

“The SUNREF Nigeria programme which is composed of a €60 million ($70 million) low-cost debt financing and a €9.5 million ($11 million) grant facility seeks to improve access to energy through improved access to affordable finance for renewable energy technologies and energy efficient initiatives that will improve lives, increase economic opportunities, and support various sectors such as industry and agriculture,” they added.

For the MAN, which is the target beneficiary, its president Dr. Mansur Ahmed stated that: “This programme will be critical in increasing the competitiveness of Nigerian manufacturers as they transition to renewable energy sources and implement energy efficiency measures in their operations.”

In her remarks, Inga-Elisabeth Hawley, who is the Senior Director, Environment and Energy at WINROCK International said the WINROCK International is “delighted to be appointed to implement the technical component of the SUNREF programme.”

Further, Betancourt said the SUNREF Nigeria programme will bring the global SUNREF experience of providing financing and technical assistance for renewable energy and energy efficiency projects to Nigeria to assist businesses become more efficient and transition to green energy.

With regards to the thoughts of participating banks on the programme’s expected impacts on Nigeria’s economy, the Chief Risk Officer at Access Bank, Dr. Gregory Jobome stated that his bank would expect to see more Nigerian banks get into financing green energy projects through the success of the programme.

“Access Bank has been on this journey of financing green energy projects for a long time. We hope that through this program, it shall be a stimulus for other banks to start financing such projects that will benefit many generations to come,” Jobome said.