5 days Ago By Guardian Nigeria
InfraCredit has announced the support of Prado Power Limited with Guaranteed Fixed-Rate Senior Green Infrastructure Forward Ijarah Lease Sukuk under a co-financing arrangement with the £10 million climate finance blending facility. The scheme is funded by the United Kingdom Foreign, Commonwealth and Development Office (FCDO). InfraCredit’s Clean Energy Funding Programme seeks to aggregate, de-risk and unlock domestic institutional investments to support eligible clean energy projects in Nigeria to contribute towards meeting the country’s universal electrification goal by 2030 and the SDG 7 target while putting the country on a path to achieve net-zero emissions by 2060.
The climate facility provided subordinated first-loss capital that helped de-risk and reduce the capital cost of the project by unlocking InfraCredit’s AAA-rated guaranteed fixed-rate senior green infrastructure forward Ijarah lease sukuk that crowded in matching investments from domestic institutional investors in a solar mini-grid project for unserved markets, resulting in a blended affordable interest rate. It is the fourth transaction under the climate facility and the first blended local currency green infrastructure forward Ijarah lease sukuk for a solar-powered rural infrastructure project in Nigeria. Green Sukuk is an Islamic Shari’ah-compliant finance instrument for eco-friendly projects, creating a new asset class for climate finance and offering investors non-interest-based financial returns.
Speaking on the transaction, the Chief Executive Officer of Prado Power, Washima Mede, stated, “Prado Power is excited to be supported by InfraCredit and the climate finance blending facility towards the construction of four mini-grids and productive use hubs across communities in Benue and Akwa Ibom states. For us at Prado Power, energy infrastructure investments must be accompanied by socio-economic improvements in the communities where we operate through job creation and improved livelihood across diverse groups. “Through the InfraCredit-backed senior debt and the Facility, we are accessing long-term blended capital that will be used to scale investments in mini-grids and productive use appliances for rural dwellers and smallholder farmers.
We would like to acknowledge and appreciate the support of the FCDO and the team at InfraCredit for structuring the transaction with an eye on mitigating risks related to long-term infrastructure finance.” The British Deputy High Commissioner in Lagos, Jonny Baxter, said: “We are delighted to reach yet another milestone with the UK-funded Climate Finance Blended Facility playing a critical role in mobilizing more green-certified local currency debt for off-grid solar projects in Nigeria. This Project demonstrates the importance of Distributed Renewable Energy in providing efficient and reliable productive use energy access in unserved and underserved regions, boosting economic activities and ensuring a safe environment.
” The Managing Director/Chief Executive Officer of Rural Electrification Agency (REA), Abba Aliyu, said: “The Rural Electrification Agency (REA) is proud to support this groundbreaking transaction facilitated by InfraCredit and the Climate Finance Blending Facility, marking the first blended local currency Green Infrastructure Forward Ijarah Lease Sukuk for a solar-powered rural infrastructure project in Nigeria. This innovative Shari’ah-compliant financing model not only represents a significant milestone in closing Nigeria’s energy access gap but also aligns with REA’s vision to explore and adopt innovative financial frameworks that de-risk the sector while enhancing project sustainability. By leveraging such models, we aim to attract increased investment and ensure the long-term viability of renewable energy projects.
” “With over 15,000 connections projected to benefit unserved communities, the initiative highlights the transformative power of renewable energy in driving socio-economic progress and sustainable development. It is a testament to the REA’s commitment to enabling decentralised renewable energy solutions and advancing Nigeria’s universal electrification goals by 2030. Together, we are building a brighter, more inclusive energy future for all.
” The Chief Executive Officer of InfraCredit, Chinua Azubike, said: “We are pleased to have supported another Distributed Renewable Energy (DRE) company in Nigeria to issue the first Fixed-Rate Senior Green Infrastructure Forward Ijarah Lease Sukuk, for the development of mini-grids for unserved communities with the support of our development partners, through the catalytic first-loss capital from the Foreign Commonwealth Development Office (FCDO) and the Technical Assistance Facility from FSD Africa. Green Sukuk is emerging as a promising finance tool, we are therefore pleased to develop innovative climate-related Islamic finance products accessible to Shariah-compliant investors that effectively tackle the challenges of energy transition, whilst creating jobs and expanding energy access for households and economic productive uses.”.
