NIGERIA – The International Finance Corporation (IFC) has announced that it is considering providing US$20 million to Nigerian off-grid power service provider, Daybreak Power Solutions, a subsidiary of Daystar Power Group.
The investment is still undergoing regulatory approval by the IFC, according to a statement from the organization. When approved, the funds will be used as part of a US$40 million Phase 1 capacity expansion project.
The US$20 million investment will be made up of a US$10 million loan given in local currency from IFC’s account as well as another US$10 million subordinated loan from the Canada-IFC Renewable Energy Program for Africa.
This investment reflects IFC’s launch of the Climate Change Investment Program for Africa (CIPA); a sustainable energy financing and advisory program in sub-Saharan Africa, where demand for power and water is increasing along with risks associated with climate change.
Daystar Power specialises in providing solar power and energy efficiency solutions for businesses in the commercial, industrial, and agricultural sectors that result in at least a 20 per cent reduction in energy costs and 50 per cent reduction in diesel consumption for end users.
Daystar Power earlier this year raised US$38 million in a Series B funding from stakeholders including Danish DFI’s Investment Fund for Developing Countries (IFU), STOA – a French impact infrastructure fund, Proparco, the French DFI, and Morgan Stanley Investment Management.
This was to grow its operations in its key markets of Nigeria and Ghana, while expanding to other regional countries including Côte d’Ivoire, Senegal, and Togo.
According to a report by researchgate, renewable energy in a long run will influence economic growth, providing energy security, green jobs that will contribute to sustainable growth and development in Nigeria.
Also, the Nigerian government was looking at that direction when it initiated the Renewable Energy Master Plan (REMP).
(REMP) seeks to increase the supply of renewable electricity from 13% of total electricity generation in 2015 to 23% in 2025 and 36% by 2030. Renewable electricity would then account for 10% of Nigerian total energy consumption by 2025.
Regarding the institutional framework dedicated to renewable energy (RE) deployment, the REMP underlines the need for the creation of a specialised fund and Agency (NREA). The REMP also initiates a set of fiscal and market incentives to support RE deployment.
On the short term, the plan includes a moratorium on import duties for renewable energy technologies. On a longer run, the plan foresees the implementation of customs duty exemption for imported RE appliances, tax credits, capital incentives and preferential loans opportunities.