InfraCredit, a specialised infrastructure credit guarantee institution, has announced credit enhancement of Prado Power Limited’s Guaranteed Fixed-Rate Senior Green Infrastructure Forward Ijarah Lease Sukuk under a co-financing arrangement with £10 million Climate Finance Blending Facility.
The scheme was funded by United Kingdom Foreign, Commonwealth and Development Office (FCDO).
InfraCredit’s Clean Energy Funding Programme seeks to aggregate, de-risk, and unlock domestic investments to support clean energy in Nigeria to contribute towards meeting the country’s electrification goal by 2030 and SDG 7 target of ensuring access to affordable, reliable, sustainable, and modern energy, while putting us on a path to achieve net zero emissions by 2060.
The Climate Facility provided subordinated first-loss capital that helped de-risk and reduce capital cost of the Project by unlocking InfraCredit’s “AAA”-rated Guaranteed Fixed-Rate Senior Green Infrastructure Forward Ijarah Lease Sukuk that crowded in matching investments from domestic institutional investors in a solar mini-grid project for unserved markets, resulting in affordable interest rate.
It is the fourth transaction under the Climate Facility and the first blended local currency Green Infrastructure Forward Ijarah Lease Sukuk for a Solar Powered Rural Infrastructure Project in Nigeria. Green Sukuk is an Islamic Shari’ah-compliant finance instrument for eco-friendly projects, creating a new asset class for climate finance and offering investors non-interest based financial returns.
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Chief Executive Officer of Prado Power, Washima Mede said: “Prado Power is excited to be supported by InfraCredit and the Climate Finance Blending Facility towards construction of four mini-grids and productive use hubs in Benue and Akwa Ibom states. For us at Prado Power, it is important energy infrastructure investments are accompanied by socio-economic improvements in the communities where we operate through job creation and improved livelihood. Through InfraCredit-backed senior debt and the facility, we are accessing long-term blended capital to be used to scale investments in mini-grids and productive use appliances for rural dwellers and smallholder farmers…”
British Deputy High Commissioner in Lagos, Mr. Jonny Baxter, said: “We are delighted to reach yet another milestone with UK-funded Climate Finance Blended Facility playing a role in mobilising more green-certified local currency debt for off-grid solar projects in Nigeria…”
Managing Director/Chief Executive Officer of Rural Electrification Agency (REA), Abba Aliyu, said: “REA is proud to support this transaction facilitated by InfraCredit and Climate Finance Blending Facility, marking the first blended local currency Green Infrastructure Forward Ijarah Lease Sukuk for a solar-powered rural infrastructure project in Nigeria…’’