Cash Advance Payments

UK injects £10m into Nigeria via InfraCredit to cushion energy project risks

The UK is providing up to £10m in concessional aid alongside InfraCredit to reduce the risk for pension and insurance funds to invest in energy access projects and support Nigeria’s commitments at COP26.

InfraCredit is a Nigerian entity whose backers are the Nigeria Sovereign Investment Authority, Africa Finance Corporation, African Development Bank, KfW Development Bank, InfraCo Africa and GuarantCo. Both InfraCo Africa and GuarantCo are private infrastructure development group companies funded by a range of development partners – UK, Switzerland, Australia, Sweden, Netherlands, France and Canada.

The funding will help Nigerian investors focus on low-carbon energy, supporting off-grid low-carbon energy projects.

The £10m will be combined to reduce transaction risk and therefore leverage domestic institutional investment from local pension funds, insurance companies and other local institutional investors.

This will help increase domestic financing for eligible off-grid clean energy infrastructure, such as solar mini-grids and home systems, clean cooking infrastructure, and SME cold storage infrastructure in Nigeria.

UK Africa Minister Vicky Ford said:

The UK is committed to increasing both renewable energy and energy access in Nigeria, driving clean, sustainable and resilient growth. As the world contemplates a shift to clean growth, we are witnessing a defining opportunity for the private sector. This transaction is particularly exciting as it combines the support of the UK government with the institutional capital that is essential to develop the sector at scale.

This innovative blended finance initiative will provide affordable long-term financing from local investors for the low-carbon energy sector to support the scaling up of low-carbon energy projects. off-grid carbon in unserved and underserved communities.

This initiative will support the implementation of Nigeria’s Nationally Determined Contribution Plan, which Nigeria submitted to the UNFCCC prior to COP26, its Energy Transition Plan, which was presented by the Nigerian Government at COP26, and the Nigeria’s plans to increase access to energy, including the Solar Naija program.

Photo credit: UKinNigeria

Uche Orji, MD/CEO of the Nigerian Sovereign Investment Authority (NSIA) and Chairman of InfraCredit, said:

InfraCredit is pleased to work with the FCDO to mobilize private investment from national pension funds and other institutional investors in such an important area of ​​development as access to low-carbon energy. This program is aligned with NSIA’s other clean energy initiatives which aim to provide up to 250-500 MW of renewable energy capacity in Nigeria, which will reduce annual CO2 emissions, reduce poverty, create jobs and support local economic growth.