The Export-Import Bank of India and Nigeria had signed US$100m line of credit agreement to finance energy projects in Nigeria.
According to a statement released by the African Development Bank in Nigeria, the Managing Director of India-Exim Bank, Mr Yaduvendra Mathur and Nigeria’s Minister of Finance, Dr Ngozi Okonjo-Iweala, signed the agreement during the recent AfDB’s Annual Meeting in Kigali, Rwanda.
The agreement is meant to provide electricity transformers for solar electrification in rural areas in three states of Enugu, Kaduna and Cross River. Part of the loan will be used to provide a substation, including solar mini-grid electrification and solar street lighting in Kaduna State.
The funds will also be used for the construction of two 26MW gas-based power plants in Cross River State in the Delta Region of the southern part of Nigeria.
With oil reserves of about 35 billion barrels and gas reserves of about 5 trillion cubic metres, much of Nigeria does not have access to electricity. Only 40% of Nigeria’s population is connected to the energy grid. The country’s primary energy consumption was about 108 Mtoe in 2011. Most of the energy comes from traditional biomass and waste, which account for 83% of total primary consumption. The rest is from fossil fuels (16%) and hydropower (1%).
The energy sector is heavily dependent on petroleum as a method for electricity production which has slowed down the development of alternative forms of energy.