Energy for Growth

Productive Use of Energy

Financing options for productive use is limited and comes at high cost to end-users. Although there are a few interventions offering grants, these funding opportunities are time-bound and cannot commensurably scale to meet the fast-growing demand of newly electrified communities for productive appliances. NoMAP is implementing a pilot to test the viability of a finance vehicle for productive use at select mini-grid sites at “friendlier terms” than prevailing market rates offered by commercial lenders.

NoMAP is on-lending to solar mini-grid developers (SMDs) for the purchase of productive use appliances at concessionary interest rates which will be provided to productive community users under a lease-to-own arrangement. The fund is  channeled through a licensed Fund Manager who manages the operationalization of the fund.

NoMAP is working with three mini-grid developers across multiple sites in three states to test out the financing model. Learnings from the pilot will be shared with sector actors and will inform the development of a sector-wide fund for productive use financing.

Agro Integrated Facility

Mini-grids in Nigeria continue to grapple with challenges from capacity utilisation of the system and commercial viability. Furthermore, most of these systems operate predominantly in agrarian communities where post-harvest losses are high due to limited options for storage and processing.

Post-harvest losses are estimated to cost the country an estimated 3.5 trillion Naira (USD 8 billion) annually and while efforts are being made to stimulate demand for electricity in communities powered by mini-grids, developers are also beginning to identify opportunities where electricity can be used for value addition, especially in the agriculture value chain.

The AIF’s objective is to finance innovative approaches and business models that integrate rural electrification through solar mini-grids with the provision of services that improve the agriculture value chain and livelihoods in rural communities.

Under the AIF, NoMAP will provide a debt facility (through a SEC licensed fund manager) to three mini-grid developers for the deployment of agro integrated services in mini-grid powered rural communities. It will closely monitor the types of business models deployed and impact on the mini-grid utilisation and viability, the agro value chain, and the rural economy with an emphasis on improved livelihoods and job creation for women and youth.

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