2 weeks Ago By Guardian Nigeria
InfraCredit has secured a $30 million risk-sharing and blended local currency co-financing facility from British International Investment (BII), the United Kingdom’s development finance institution and impact investor, to support the clean energy transition in Nigeria. The $30 million investment is a dual financing instrument combining a $20 million (N32 billion) local currency counter-guarantee and a $10 million (N16 billion) concessional financing to support decentralised renewable energy (DRE) projects, originated and guaranteed by InfraCredit, an ‘AAA’ rated specialised infrastructure credit guarantee institution. The concessional financing will be provided through the climate finance blending facility (CFBF), which is a catalytic first-loss multi-donor facility.
It aims to mobilise additional funding from development partners and domestic institutional investors to co-finance decentralised clean energy investments alongside InfraCredit’s local currency guarantees in Nigeria. British High Commissioner to Nigeria, Richard Montgomery, said: “It has been encouraging to see how the CFBF has successfully mobilised a total of $11.48 million (N8.
92 billion) to support four Green Certified Local Currency Debt Issuances for rural mini-grids and solar-powered telephony projects in Nigeria, with more projects in the pipeline. “With BII’s latest investment, we look forward to amplifying the impacts through this facility, which was seeded with £10 million concessional funding by the UK Foreign, Commonwealth and Development Office in 2021.” Head of Office and Coverage Director, Nigeria at BII, Benson Adenuga, said: “Expanding distributed renewable energy in Nigeria is not just an environmental necessity; it is a path to empowering millions without power, bolstering economic resilience and reducing costly reliance on diesel.
“As Nigeria’s energy demand rises, decentralised clean energy offers a reliable, scalable, and sustainable solution for communities nationwide. We are delighted to work with InfraCredit to mobilise more capital to drive this shift. It can redefine growth, from rural villages to bustling cities, lighting the way to a greener future.
” The Chief Executive Officer of InfraCredit, Chinua Azubike, said: “We are very delighted to work with BII through this innovative stapled investment of a subordinated first loss facility, alongside a counter-guarantee facility that will strengthen InfraCredit’s capacity to de-risk, reduce the capital cost and catalyse domestic institutional investments that will scale up renewable energy infrastructure for productive use in unserved and underserved markets in Nigeria.” InfraCredit’s pipeline of DRE projects has expanded consistently over the years, reaching $497.37 million (N746.
05 billion) and is projected to continue its upward trajectory in the coming years. This innovative Facility is projected to enable over 57,000 new energy connections, increase renewable energy capacity by 20.1 MWp, reach 564 communities, create 2,558 jobs, and reduce greenhouse gas emissions by 158.
3 tonnes. Also, the investment is expected to mobilise private capital at scale, highlighting the role of sustainable finance in long-term sector growth..
