Lagos, Nigeria – InfraCredit, a leading infrastructure credit guarantee institution in Nigeria, has secured a $30 million risk-sharing and co-financing facility from British International Investment (BII), the UK’s development finance institution. This dual financing package will support the expansion of decentralised renewable energy (DRE) projects across Nigeria, aiming to address the country’s significant energy access deficit.
The $30 million investment includes a $20 million (N32 billion) local currency counter-guarantee and $10 million (N16 billion) concessional financing. The financing will be used to back decentralised renewable energy projects, primarily solar mini-grids, designed to provide clean, reliable power to underserved and off-grid communities in Nigeria. The concessional financing will be provided through the Climate Finance Blending Facility (CFBF), a catalytic multi-donor initiative that aims to mobilise additional funds from development partners and domestic institutional investors to co-finance clean energy investments.
Expanding Access to Clean Energy in Nigeria
Nigeria, which faces the world’s largest energy access deficit, with over 85 million people—or 43% of the population—lacking access to electricity, is heavily reliant on diesel for power, particularly in rural areas. The new financing from BII will help alleviate this reliance by supporting the development of renewable energy infrastructure in communities that are currently underserved by the national grid.
Benson Adenuga, Head of Office and Coverage Director for Nigeria at BII, emphasized the importance of the investment: “Expanding distributed renewable energy in Nigeria is not just an environmental necessity; it’s a path to empowering millions without power, bolstering economic resilience, and reducing costly reliance on diesel.” He also noted that decentralised clean energy solutions are essential for meeting Nigeria’s rising energy demands and for promoting long-term economic growth.
The financing aims to support over 57,000 new energy connections, increase renewable energy capacity by 20.1 MWp, and reach 564 communities. Additionally, the projects are expected to create 2,558 jobs and reduce greenhouse gas emissions by 158.3 tonnes, further contributing to Nigeria’s sustainable development goals.
Catalysing Private Investment for Renewable Energy
The partnership between InfraCredit and BII is designed to lower the risk profile of renewable energy projects, making them more attractive to private investors. By providing a subordinated first-loss facility alongside a local currency counter-guarantee, the financing reduces the capital cost for project developers and facilitates access to cheaper debt. This is expected to catalyse additional private capital, accelerating the development of decentralised renewable energy (DRE) solutions in Nigeria.
InfraCredit’s CEO, Chinua Azubike, highlighted the strategic importance of the investment, saying, “This innovative stapled investment will strengthen InfraCredit’s capacity to de-risk projects, reduce capital costs, and mobilise domestic institutional investments. It will help scale renewable energy infrastructure for productive use in unserved and underserved markets in Nigeria.”
Alignment with Nigeria’s Green Growth Strategy
InfraCredit’s renewable energy pipeline has steadily expanded over the years and is now valued at approximately $497.37 million (N746.05 billion). The organization’s growing portfolio aligns with Nigeria’s nationally determined contributions (NDCs) under the Paris Agreement, supporting the country’s green growth agenda by creating jobs, promoting gender diversity, and stimulating local economic development.
The partnership with BII also supports Nigeria’s broader push for green finance and climate action, positioning InfraCredit as a key player in driving the clean energy transition. The Climate Finance Blending Facility, which was seeded with £10 million in concessional funding by the UK’s Foreign, Commonwealth & Development Office (FCDO) in 2021, has already mobilised $11.48 million (N8.92 billion) to fund Green Certified Local Currency Debt Issuances for rural mini-grids and solar-powered telephony projects in Nigeria.
Positive Impact on Rural Communities
The impact of BII’s latest investment is expected to be significant, especially in rural and low-income areas, where access to reliable electricity is a critical enabler of economic development. The provision of clean, affordable energy will not only improve the quality of life for millions of Nigerians but also stimulate economic activity by supporting small businesses, educational institutions, healthcare facilities, and agricultural enterprises.
This funding initiative is part of a broader effort to transform Nigeria’s energy landscape, providing the necessary infrastructure to drive sustainable economic growth, reduce carbon emissions, and enhance energy security.
Conclusion: A Bright Future for Renewable Energy in Nigeria
The $30 million financing facility from British International Investment is a crucial step towards scaling renewable energy solutions in Nigeria, where energy access remains one of the most pressing development challenges. By leveraging InfraCredit’s local currency guarantees and the Climate Finance Blending Facility, the investment will help unlock significant private capital for renewable energy projects, ultimately providing cleaner, more reliable power to underserved communities.
As Nigeria works to meet its energy demands and reduce reliance on fossil fuels, the partnership between InfraCredit and BII represents a model for sustainable finance and green growth, supporting the country’s long-term energy transition and contributing to the global fight against climate change.