NSIA launches $500m renewables investment platform, RIPLE to enhance Nigeria’s power sector
Oredola Adeola
The Nigerian Sovereign Investment Authority (NSIA) has unveiled a US$500 million Renewables Investment Platform for Limitless Energy (RIPLE) to enhance the country’s electrification focusing on three core pillars; diesel displacement, franchising, and backward integration towards photovoltaic system (PV) manufacturing.
NSIA made this known in a statement obtained by EnergyDay on Sunday, after signing a memorandum of understanding (MoU) with the International Finance Corporation (IFC).
EnergyDay gathered that the Nigeria Sovereign Investment Authority (NSIA) was established by an Act of Parliament to manage funds over budgeted hydrocarbon revenues, operating three distinct funds: the Stabilization Fund, Future Generation Fund, and Nigeria Infrastructure Fund.
The fund signed up the International Finance Corporation (IFC) as a strategic partner for a pilot investment for the distribution of 70 MegaWatts of solar plant in the Tokarawa Industrial Hub in Kano State to meet the needs of customers.
That deal followed the completion earlier this year of a 10MW solar farm in Kumbotso, Kano State.
NSIA in the statement said that the RIPLE transformative initiative is dedicated to the development, investment, and operation of renewable energy projects across the entire value chain in the country.
“The pilot for the initiative is located within the Tokarawa industrial hub in Kano State and it involves setting up a generation and distribution system to meet 70MW of unsuppressed energy demands of industrial activities, commercial enterprises, and residential customers in an area covering about 9,000 connections,” it said.
Yusuf Umar, Programme Manager for RIPLE, in his comment on the initiative, said the collaboration between NSIA and the IFC is a clear demonstration of NSIA’s dedication to sustainable energy transition in Nigeria.
“We are excited to partner with the IFC to advance the transition to energy-efficient solutions in Nigeria, an institution that shares our commitment to sustainable development, our focus is to empower the customers with a resilient and environmentally friendly energy solution that will optimize productivity and reduce carbon footprint.
“As the custodian of economic resources for current and future generations of Nigerians, tackling climate risks is integral to NSIA’s objectives.
“We recognize the many opportunities it offers for innovation, growth, and economic transformation.
“RIPLE is another milestone initiative by NSIA in the climate sustainability asset class, having previously launched carbon vista with Vitol and the construction finance warehouse facility,” he said.
Dan Croft, IFC’s regional manager for Africa, in his remark, said that reliable electricity is crucial for improving quality of life, productivity, and economic growth in Nigeria.
“IFC is pleased to collaborate with our longstanding partner, NSIA, to develop and implement the first phase of this innovative energy solution which will reduce greenhouse gas emissions and reliance on fossil fuel,” Croft said.
EnergyDay’s further check showed that the NSIA has allocated an initial US$25 million in funding and hopes to catalyze additional investments to make up the US$500 million to fulfill the platform’s mandate.
NSIA claimed it has so far invested about US$100 million in projects geared towards climate and sustainability.
NSIA and the National Council on Climate Change (NCCC), Nigeria’s implementing entity for climate action, signed an MoU in May to address climate risks.
The partners agreed to: develop a climate change framework to provide guidelines for regulating emissions in Nigeria; implement a carbon emissions trading mechanism; and oversee the implementation of a national carbon registry as well as a Climate Change Fund.
Last month, NSIA and InfraCredit co-developed an innovative Construction Finance Warehouse Facility (CFWF), seeded with NGN10 billion ((US$12 million), to help finance sustainable greenfield infrastructure projects in Nigeria.
It aims to provide early-stage debt financing for projects until they can secure long-term financing from the debt capital markets.
The sovereign wealth fund aims to reach up to NGN100 billion (US$120 million) capacity within the next three years and unlock up to NGN500 billion (US$600 million) in infrastructure projects, backed by credit enhancements from InfraCredit, set up by NSIA to mobilize local, long-term financing into infrastructure development.
NSIA previously launched Carbon Vista with Vitol and the Construction Finance Warehouse Facility, which signed an MoU with the Regional Voluntary Carbon Market Company (RVCMC), a wholly owned subsidiary of Saudi Arabia’s Public Investment Fund (PIF).
The deal involves the supply of Nigerian carbon credits to Saudi Arabia and co-investment in projects that will originate carbon credits to promote low-carbon economic growth through a range of carbon avoidance and removal projects, such as climate-smart agriculture, green industrial technologies, and waste management.
The JV’s initial investment aims to reduce emissions in infrastructure, agriculture, and energy sectors, combining carbon offsetting with social outcomes in line with SDGs.
The US$2.3 billion NSIA has three sub-funds that are strictly segregated.
With infrastructure representing 40% of AUM, the fund is targeting up to US$1 billion in the sector over a three-year program of investment in solar energy and healthcare.
This requires new sources of cash, probably in the form of excess oil revenues as well as external financing through partnerships with the private sector.
