Bank of Industry unveils N1bn solar energy fund for SMEs
In pursuance of its Green Energy Project, the Bank of Industry (BoI) on Friday in Lagos launched its N1billion solar energy fund to boost its off-grid electricity generation project.
The fund would be made available to firms partnering with the bank in the development of solar energy services across the country.
Speaking at the event, acting managing director of the bank, Waheed Olagunju, explained that the fund is a concessional financing initiated by the bank as a result of poor cash floor in the rural areas.
Olagunju said the project considers supply of electricity to Micro, Small and Medium Enterprises, MSMEs, to boost their production and make them competitive.
He said the initiative will help reduce cost of business, as current study shows that alternative power source costs 40 percent of expenditure by the manufacturing sector.
The bank, according to him, spent about N240 million for six pilot solar projects in the geo-political zones of the country in 2016.
He also 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.
He disclosed that the cost of electricity accounts for about 40 percent of operational expenses for most MSMEs, resulting in reduced profit margins, uncompetitive and generally unsustainable ventures.
''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.
''A robust mix of energy sources combined with an improved end-use efficiency, would be required to meet the country's energy needs, and this is where the utilization of renewable energy sources come into play,' he said.