InfraCredit has secured a $30 million risk-sharing co-financing facility from British International Investment (BII), United Kingdom’s development finance institution and impact investor, to support 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 Climate Finance Blending Facility (CFBF), which is a catalytic first loss multi-donor facility.
It will mobilise more funding from development partners and domestic institutional investors to co-finance decentralised clean energy with InfraCredit’s local currency guarantees in Nigeria.
Richard Montgomery, British High Commissioner in Nigeria said: “It has been encouraging to see how CFBF has mobilised $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 BII’s investment, we look forward to amplifying the impact through this facility, which was seeded with £10 million concessional funding by UK Foreign, Commonwealth & Development Office in 2021.”
Benson Adenuga, head of Office and Coverage Director, Nigeria at BII, said: “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.
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“As Nigeria’s energy demand rises, decentralised clean energy offers a reliable, scalable, and sustainable solution for communities. We are delighted to work with InfraCredit to mobilise more capital to drive this shift. It can redefine growth, from rural villages to cities, lighting the way to a greener future.”
Chief Executive Officer of InfraCredit, Chinua Azubike, said: “We are delighted to work with BII through this stapled investment of a subordinated first loss facility, with a counter-guarantee facility to strengthen InfraCredit’s capacity to de-risk, reduce capital cost and catalyse domestic institutional investments to scale up renewable energy infrastructure for unserved and underserved markets in Nigeria.
BII’s investment will catalyse additional private capital and scale support for wider DRE transactions, leveraging InfraCredit’s guarantee. It will reduce the risk profile of DRE projects and lower the cost of local currency debt for developers.
The investment is also expected to mobilise private capital at scale, highlighting the role of sustainable finance in long-term sector growth.
InfraCredit’s pipeline of DRE projects has risen, reaching $497.37 million (N746.05 billion) and projected to continue.