There are indications that the Rural electrification is set to get the highest capital investment from the Federal Government in the power sector in 2022, as N114.64bn has been appropriated for it.
An analysis of the 2022 Appropriation Bill that was presented to the National Assembly recently shows that the government plans to spend more in providing electricity in rural areas than in other arms of the power chain next year.
In the bill, the government appropriated N104.18bn for capital projects under the Transmission Company of Nigeria, while N74.23bn was budgeted for projects to be handled by the headquarters of the Federal Ministry of Power.
Electricity transmission, unlike the distribution and generation segments of the industry, is still under the control of the Federal Government and is being managed by the TCN.
Power generation and distribution companies generate and distribute electricity respectively, as the firms handling these functions were officially privatised in November 2013.
Out of the total allocation of N301.26bn for the Federal Ministry of Power in the 2022 budget, the sum of N4.87bn, N1.36bn and N294.99bn were appropriated for personnel, overhead and capital projects respectively.
Rural electrification got the highest appropriation for capital projects, accounting for 38.86 per cent of the entire capital budget for the power ministry in the coming year.’
The Federal Government has been partnering multilateral donor agencies to fund the electrification of rural communities across the country.
It, for instance, announced in August that the World Bank and the African Development Bank were supporting off-grid power development projects in Nigeria with $500m.
The government, through its Rural Electrification Agency and the Nigeria Electrification Project, stated that the fund was being used in the implementation of the various power development programmes.
REA provides off-grid solutions to bridge electricity gap in unserved and underserved rural communities and healthcare centres in Nigeria, with financial support from the World Bank and AfDB.
NEP is a private sector driven project that provides grant subsidies under its solar hybrid mini-grids, standalone solar home systems and productive use appliance components to bridge the access to electrification gap.
“A total sum of $550m was provided by both the World Bank and African Development Bank as support for the implementation of the off-grid solution, projects with $213m for the mini-grid components of both the World Bank and AfDB,” the Communications Specialist, NEP, Ahmed Abubakar, had stated.