The Bank of Industry (BoI) launched the N1billion solar energy fund for the Micro, Small and Medium Enterprises (MSMEs) because of the power challenge in the sector, its Acting Managing Director, Mr. Waheed Olagunju, has said.
Speaking at the launch in Lagos, Olagunju said solar energy had become alternative for the MSME operators in view of the poor supply in the country. The cost of electricity accounts for about 40 percent of operational expenses for most MSMEs, resulting in reduced profit margins and unsustainable ventures. Olagunju said: “Many Nigerians and Nigerian businesses that can afford other alternative energy sources have resorted to the use of electric generators at exorbitant costs. It was estimated that in 2015, manufacturers spent as much as N3.5trillion to generate alternative power due to the challenges in the supply of public electricity.
“MSMEs play a major role as the engine through which most countries in the world thrive. Their growth and development are crucial to the level of industrialization, modernization, income per capita, equitable distribution of income, welfare, and quality of life enjoyed by the citizenry “Consequently, the performance of the MSME sub-sector is closely associated with the development of a nation. In Nigeria, the growth of this sector has been hampered over the years by a combination of factors, one of which is access to reliable electricity. “For Nigeria to, therefore, achieve sustainable and inclusive development, there is an urgent need to substantially increase the supply of modern and affordable energy services from sources that are affordable, accessible and environmentally friendly,” he added.
Olagunju said renewable energy provides a healthy and sustainable alternative to the continuous use of fossil fuels, with long-term cost saving advantages, especially in the absence of reliable power supply that is an essential ingredient for growth. “It is, therefore, important to support the provision of sustainable and reliable energy for MSMEs, which is why the Bank of Industry has decided to provide the solar energy fund to MSMEs. “The bank is already playing an active role in lighting up and powering Nigeria through the provision of solar energy solutions for rural communities, having successfully deployed solar solutions worth N240million to six off-grid communities, one each in Niger, Osun, Gombe, Anambra, Edo and Kaduna states, under its pilot scheme. These communities with an average of 200 homes each previously had no access to electricity, but since the provision of clean, reliable and sustainable solar electricity, the lives of the indigenes of these communities have changed significantly.”
The bank’s General Manager, Large Enterprises, Mr. Joseph Babatunde, who gave a breakdown of how the Fund would be deployed, said that select development partners to support agriculture, solid minerals, cottage industries, artisans, and service industry, and clusters to improve their operations would implement the projects. According to him, what will be due each applicant is N50 million, adding that the allocation is scalable depending on the project.
He noted that the initiative would not only boost employment generation, but it would also improve the standard of living of the beneficiaries, revamp the economy, and enhance poverty alleviation. Some of BoI’s development partners are Arnegy Solar Limited, GVE Projects Limited, GreenPower Overseas Limited, The Solar Shop Limited, Wayo Tropical Technical Limited, Blue Carmel Energy Limited, Novel Integrated Services Limited and Solar Force Nigeria Limited. They will implement the projects from design to execution.