The Bank of Industry is set to meet the energy requirements of Micro, Small and Medium Enterprises (MSMEs) in the country through the provision of N1 billion credit to enterprises in many sectors.
Investigations showed that:
- Cost of electricity accounts for about 40 per cent of operational costs for most MSMEs, resulting in very little profit margin, non-competitive products and generally unsustainable ventures.
- Consequently, the bank has taken its renewable energy projects beyond rural communities by including electrification of MSME sector to boost their performance and create jobs.
- The bank will soon start to disburse the first phase of the loans through banks, micro finance banks and solar energy firms.
- The bank has structured the loan for disbursement to micro-businesses that needs individual loans less than or equal to the cost of a 5KVA power system and SMEs that need up to N5 million to fund solar energy project.
- The loan beneficiaries will be required to pay interest rate of 7.0 per cent per annum with a six months moratorium (from date of loan disbursement) for existing businesses and 12 months moratorium for new businesses.
- The bank is executing the projects under the United Nations Development Programme, UNDP’s Access to Renewable Energy (AtRE) fund, being managed by the bank to provide micro-grid and stand-alone solar solutions in the off-grid communities across the six geo-political zones in Nigeria.
- The bank has signed a $2 million (about N880 million) pact with the UNDP for the implementation of the second phase of the solar power electrification projects.