Empowering Nigeria: World Bank’s $750 Million DARES Initiative Revolutionizes Renewable Energy Access

In a historic move to catalyze a renewable energy revolution in Nigeria, the World Bank has approved the Nigeria Distributed Access through Renewable Energy Scale-up (DARES) project, a monumental effort aimed at expanding access to clean energy for a staggering 17.5 million Nigerians. The financial backbone of this transformative endeavor is a $750 million International Development Association (IDA) credit, set to leverage an impressive $1 billion in private capital alongside significant parallel financing from key development partners.

This groundbreaking initiative includes a commitment of $100 million from the Global Energy Alliance for People and Planet and an additional $200 million from the Japan International Cooperation Agency (JICA). Collaborating with the World Bank on this ambitious project are esteemed partners such as the United States Agency for International Development (USAID), the German Development Agency (GIZ), SEforAll, and the African Development Bank (AfDB).

The DARES project, according to a recent statement from the World Bank, represents a pivotal step toward revolutionizing energy accessibility in Nigeria. With approximately 85 million Nigerians lacking access to electricity as of 2021, the initiative seeks to address the challenges faced by businesses and households connected to the national grid, plagued by unreliable and insufficient power supply. This has led to a widespread reliance on petrol and diesel-run generator sets, not only costly but also posing severe threats to public health and the environment due to high pollution levels.

Building on the successes of the Nigeria Electrification Project (NEP), the DARES project will employ innovative financing solutions to scale up private sector-led clean electricity provision in Nigeria. NEP has already made significant strides, supporting the establishment of 125 mini-grids and facilitating the sale of over a million Solar Home Systems, providing electricity to more than 5.5 million Nigerians

Shubham Chaudhuri, World Bank Country Director for Nigeria, underscored the far-reaching impact of the DARES program, deeming it the largest single distributed energy project undertaken by the World Bank globally. He highlighted the potential to benefit over 17.5 million unserved, underserved, rural, and remote Nigerians through the deployment of standalone solar and mini-grids. The initiative aims to replace over 280,000 polluting and expensive petrol and diesel generator sets, marking a crucial step for Nigeria in achieving its energy transition targets.

Nigeria’s Minister of Power, Chief Adebayo Adebalu, expressed enthusiasm about contributing to this revolutionary movement. He emphasized the importance of innovative financial instruments like the DARES program in unlocking the full potential of the off-grid sector and fueling investments in clean energy solutions. Adebalu highlighted the ripple effect, reaching unserved and underserved communities, and unlocking access to clean and equitable energy for all.

The DARES program is poised not only to provide reliable and clean electricity for households but also to support up to 237,000 Micro, Small, and Medium-sized Enterprises (MSMEs). The initiative places a strong emphasis on gender and inclusion, building on NEP’s efforts to facilitate electricity access for disadvantaged female-headed households and women-led MSMEs. Furthermore, the program aims to increase the employment of women in the energy sector, promoting a more inclusive and diverse workforce.

The DARES program hailed as the largest-ever single distributed energy project by the World Bank, is poised to instigate a profound transformation in Nigeria’s energy landscape. The initiative is not merely a financial injection into the sector but a holistic approach that addresses the multifaceted challenges faced by the country in its quest for sustainable and reliable energy. As Nigeria embarks on this transformative journey, it sets a powerful example for nations worldwide, showcasing what can be achieved through visionary initiatives, strategic partnerships, and a collective commitment to a greener and more sustainable future.

The emphasis on standalone solar and mini-grids is strategic, as it allows for decentralized energy production, reducing the strain on the national grid. This approach not only ensures a more reliable and sustainable energy supply but also mitigates the environmental impact associated with traditional power sources.

One of the standout features of the DARES program is its innovative financing solutions. By leveraging private capital and partnering with organizations such as the Global Energy Alliance for People and Planet and JICA, the initiative demonstrates a commitment to mobilizing diverse resources for a common goal. This collaborative effort is a testament to the importance of international cooperation in addressing global challenges.

The DARES program also builds on the achievements of the NEP, which has not only provided electricity to millions but has been a catalyst for job creation. Over 5,000 green jobs have been generated, contributing to the economic empowerment of local communities. The emphasis on gender and inclusion in the DARES program takes this a step further, acknowledging the role women play in both household and community well-being. By facilitating electricity access for female-headed households and supporting women-led MSMEs, the initiative seeks to create a more equitable and inclusive energy sector.

Nigeria’s Minister of Power, Chief Adebayo Adebalu, rightly emphasizes the revolutionary nature of this movement. The DARES program is not merely about plugging the electricity gap; it is about unleashing the full potential of the off-grid sector. It is a strategic move that aligns with global energy transition goals, signaling Nigeria’s commitment to a cleaner and more sustainable future.

The ripple effect of the DARES program extends beyond powering homes and businesses. By supporting MSMEs with reliable and clean electricity, the initiative becomes a catalyst for economic growth. It empowers local entrepreneurs to enhance productivity, generate income, and create job opportunities within their communities. This aligns with broader development objectives, contributing to poverty reduction and fostering sustainable economic development.

In conclusion, the DARES program stands as a game-changer for Nigeria, marking a pivotal moment in the nation’s pursuit of sustainable and accessible energy. It is positioned to close the electricity access gap and propel the nation toward a sustainable, efficient, and economically viable electricity supply. This initiative exemplifies the potential of effective collaboration and partnerships between the government, private sector, and development partners in driving positive change and sustainable development.