By Habibat Aliu
InfraCredit has announced the credit enhancement of Darway Coast Nigeria Limited’s green debt issuance under a cofinancing arrangement with the £10 million Climate Finance Blending Facility funded by the United Kingdom Foreign, Commonwealth and Development Office (FCDO), which is an initial transaction under InfraCredit’s Clean Energy Funding Programme.
According to the institution, the programme seeks to aggregate, de-risk and unlock domestic institutional investments to support eligible clean energy projects in Nigeria, contribute towards meeting the country’s universal electrification goal by 2030 and the SDG seven target of ensuring access to affordable, reliable, sustainable, and modern energy for all.
Recall that the UK had in February 2022, announced a £10 million local currency blended co-financing facility with InfraCredit to help de-risk, reduce capital cost and catalyse at least an equivalent amount in private investment from domestic institutional investors to support off-grid clean energy companies to increase energy access for unserved and underserved people as well as small businesses in Nigeria.
It is expected that the facility will be increased through funding by other development partners to cofinance a pre-assessed initial pipeline of over $128 million that will mobilise at least N26.8 billion ($64 million) of domestic institutional capital to construct 22.7 MW of isolated
off-grid renewable energy projects in 580 unserved communities across 32 states in Nigeria.
The facility will connect 172,535 unserved households and small businesses, create 6,977 jobs and reduce 394,403 tonnes of GHG emissions.
The company said the initial transaction under the programme, was financed with the UK-funded facility through a blended instrument enabling domestic institutional investors to directly invest in a seven-year fixed rate
local currency debt financing for the project, making it the first-ever certified local currency
green debt issue for a solar mini-grid project in Nigeria.
The company stated that the financing will be utilised to construct isolated solar mini-grids with a total capacity of 526.1 kW in six communities without grid access within Rivers State and Abia State in Southern Nigeria.
Also on completion, the project is expected to electrify up to 7,711 unserved households and small businesses, create up to 497 temporary and permanent jobs and avoid 4,856 tonnes of GHG emissions whilst enhancing
access to renewable energy for productive uses.
Managing Director of Doorway Coast Nigeria Limited, Henry Ureh said for mini-grid developers, access to long-term affordable local currency finance is critical for sustainability.
According to him, the project would enable mini-grid developers to access patient green capital in naira from domestic institutional investors, to construct off-grid infrastructure for renewable energy access to unelectrified rural communities in Nigeria for productive use.
” We sincerely appreciate the team at InfraCredit and the FCDO for this novel structure which will reduce the financial burden of clean energy developers like Darway Coast, and help the off-grid renewable energy market to scale sustainably”.
Chief Executive Officer of InfraCredit, Chinua Azubike, said it is estimated that up to $16.4 billion of funding will be required to finance off-grid infrastructure for solar mini-grids and stand-alone solar systems that will electrify 621,000 unserved communities not connected to the grid, which represents 98 per cent of the identified settlements without energy access.
However, he noted that Nigerian domestic institutional investors’ assets under management in local
currency is estimated at over $35 billion, but less than one per cent is currently invested as domestic credit to the private sector due to perceived risks and limited quality projects.
“We are very excited by the success and scalability of this innovative blended finance transaction anchored by UK
FCDO and InfraCredit, because it demonstrated a strong case for donors and concessional financiers, to make smart use of impact-seeking capital to de-risk, reduce the capital cost and mobilise private sector financing towards green life-saving investments that can unlock domestic pools of resources, promote green growth and
climate-resilient development.”
Also, the UK Deputy High Commissioner in Lagos, Ben Llewellyn-Jones the UK-funded facility is mobilising domestic institutional investment into the much-needed clean energy projects.
He pointed out that the facility is creating access to clean energy in unserved and underserved communities in Nigeria, for both households and
businesses by providing green and affordable financing for local developers.
“The UK remains committed to increasing access to clean energy in Nigeria, to drive sustainable and
resilient growth, and support Nigeria in meeting its climate goals,” he said.
InfraCredit has announced the credit enhancement of Darway Coast Nigeria Limited’s green debt issuance under a cofinancing arrangement with the £10 million Climate Finance Blending Facility funded by the United Kingdom Foreign, Commonwealth and Development Office (FCDO), which is an initial transaction under InfraCredit’s Clean Energy Funding Programme.
According to the institution, the programme seeks to aggregate, de-risk and unlock domestic institutional investments to support eligible clean energy projects in Nigeria, contribute towards meeting the country’s universal electrification goal by 2030 and the SDG seven target of ensuring access to affordable, reliable, sustainable, and modern energy for all.
Recall that the UK had in February 2022, announced a £10 million local currency blended co-financing facility with InfraCredit to help de-risk, reduce capital cost and catalyse at least an equivalent amount in private investment from domestic institutional investors to support off-grid clean energy companies to increase energy access for unserved and underserved people as well as small businesses in Nigeria.
It is expected that the facility will be increased through funding by other development partners to cofinance a pre-assessed initial pipeline of over $128 million that will mobilise at least N26.8 billion ($64 million) of domestic institutional capital to construct 22.7 MW of isolated
off-grid renewable energy projects in 580 unserved communities across 32 states in Nigeria.
The facility will connect 172,535 unserved households and small businesses, create 6,977 jobs and reduce 394,403 tonnes of GHG emissions.
The company said the initial transaction under the programme, was financed with the UK-funded facility through a blended instrument enabling domestic institutional investors to directly invest in a seven-year fixed rate
local currency debt financing for the project, making it the first-ever certified local currency
green debt issue for a solar mini-grid project in Nigeria.
The company stated that the financing will be utilised to construct isolated solar mini-grids with a total capacity of 526.1 kW in six communities without grid access within Rivers State and Abia State in Southern Nigeria.
Also on completion, the project is expected to electrify up to 7,711 unserved households and small businesses, create up to 497 temporary and permanent jobs and avoid 4,856 tonnes of GHG emissions whilst enhancing
access to renewable energy for productive uses.
Managing Director of Doorway Coast Nigeria Limited, Henry Ureh said for mini-grid developers, access to long-term affordable local currency finance is critical for sustainability.
According to him, the project would enable mini-grid developers to access patient green capital in naira from domestic institutional investors, to construct off-grid infrastructure for renewable energy access to unelectrified rural communities in Nigeria for productive use.
” We sincerely appreciate the team at InfraCredit and the FCDO for this novel structure which will reduce the financial burden of clean energy developers like Darway Coast, and help the off-grid renewable energy market to scale sustainably”.
Chief Executive Officer of InfraCredit, Chinua Azubike, said it is estimated that up to $16.4 billion of funding will be required to finance off-grid infrastructure for solar mini-grids and stand-alone solar systems that will electrify 621,000 unserved communities not connected to the grid, which represents 98 per cent of the identified settlements without energy access.
However, he noted that Nigerian domestic institutional investors’ assets under management in local
currency is estimated at over $35 billion, but less than one per cent is currently invested as domestic credit to the private sector due to perceived risks and limited quality projects.
“We are very excited by the success and scalability of this innovative blended finance transaction anchored by UK
FCDO and InfraCredit, because it demonstrated a strong case for donors and concessional financiers, to make smart use of impact-seeking capital to de-risk, reduce the capital cost and mobilise private sector financing towards green life-saving investments that can unlock domestic pools of resources, promote green growth and
climate-resilient development.”
Also, the UK Deputy High Commissioner in Lagos, Ben Llewellyn-Jones the UK-funded facility is mobilising domestic institutional investment into the much-needed clean energy projects.
He pointed out that the facility is creating access to clean energy in unserved and underserved communities in Nigeria, for both households and
businesses by providing green and affordable financing for local developers.
“The UK remains committed to increasing access to clean energy in Nigeria, to drive sustainable and
resilient growth, and support Nigeria in meeting its climate goals,” he said.
