REA, InfraCredit Sign MoU to Eliminate Bottlenecks in Off-grid Infrastructure Financing:
Accessing sustainable financing for off-grid projects and other climate-resilient infrastructure remains a major bottleneck for off-grid Developers across sub-Saharan Africa. Results of the Federal Government of Nigeria and the Rural Electrification Agency’s (REA’s) consistent and deliberate collaboration with critical stakeholders and private sector players in the nation’s off-grid sector is that some of the hurdles mitigating growth in the sector are gradually being eliminated through strategic Public-Private Partnerships (PPP’s).
On the 2nd of August, 2022, the REA, Federal Government’s implementing Agency for the Solar Power Naija (SPN) programme officially signed a Memorandum of Understanding (MoU) with Infrastructure Credit Guarantee Company Limited (InfraCredit), a third-party guarantor for approved developers under the SPN programme. The MoU is designed to deepen and strengthen the strategic partnership between the REA through the Solar Power Naija (SPN) Programme and InfraCredit in a bid to catalyse long-term local currency investments into the Nigeria solar off-grid space.
As a key stakeholder in the nation’s financial sector and an institution with a robust history of unlocking potentials for long-term local currency infrastructure finance in Nigeria, InfraCredit has continued to walk in lockstep with the SPN Programme, while ultimately enabling private sector developers within the space to scale the bottlenecks involved in accessing off-grid infrastructure financing.
As a strategic reaction to the impact of the COVID-19 pandemic, the SPN Programme was launched as a critical component of the Federal Government’s Economic Sustainability Plan (ESP). The SPN is being implemented by the REA to ultimately meet the objectives of providing renewable energy access to 5 million households, impacting about 25 million Nigerians while providing 250,000 new renewable energy jobs. The Programme also aims to improve local content in the off-grid space by supporting the financing of upstream companies in the business of manufacturing and assembly.
While commending the InfraCredit team, led by its Managing Director, Chinua Azubike, the MD/CEO of REA, Engr. Ahmad Salihijo Ahmad reiterated the relevance of such deliberate partnerships and the need to consistently support private sector players in the off-grid sector. He added that with the quality of the Facility being provided by InfraCredit under the SPN, developers are able to reach more homes and communities across the nation.
The Managing Director of InfraCredit, while emphasizing the sustained commitment of the REA reaffirmed the company’s commitments to eliminate challenges lenders face within the ecosystem through the simplification of transactions which allows prompt delivery of off-grid infrastructure to Nigerians. He added that the SPN Programme, led by Barbara Izilein, Head SPN, has been supportive so far and they expect this support to continue as they expand their portfolio of clean energy projects in the country.
The Agency’s Executive Director, Technical Services Engr. Barka Sajou expressed his delight about the strategic partnership while commending InfraCredit and other private sector players who have keyed into the REA mandate to provide sustainable energy to the unserved and the underserved.
While urging private sector players to explore opportunities for collaboration with the REA, the Executive Director of the Agency’s Rural electrification Fund (REF), Dr. Sanusi Ohiare commended InfraCredit for its deep understanding of the business of energy in Nigeria. Mr Alaba Netufo, the Agency’s Executive Director, Corporate Services reemphasized the importance of providing guarantees while deploying off-grid infrastructure at scale.
