The Rural Electrification Agency (REA) and Stanbic IBTC Bank Limited have sealed a N100 billion financing facility to enable renewable energy project developers to access funds to procure equipment and accelerate the implementation of electricity projects in unserved and underserved communities.
   
Signed yesterday at the REA Corporate Headquarters in Abuja, the agreement established a framework for Stanbic IBTC to provide financing to eligible developers participating in REA-led electrification programmes, including the Distributed Access through Renewable Energy Scale-up (DARES) Project, the World Bank-funded scale-up of the Nigeria Electrification Project (NEP).
   
Under the Memorandum of Understanding (MoU), Stanbic IBTC will make available a N100 billion revolving loan facility for eligible project developers to procure equipment required for renewable energy projects under REA programmes.
   
The facility has a one-year tenor, while the amount accessible to each developer will be determined on a case-by-case basis, subject to the underlying grant agreement, developer capacity and the bank’s credit assessment.
   
The financing arrangement is expected to address funding constraints that have slowed the pace of renewable energy project delivery, particularly the difficulty for developers with approved projects and grants to raise the capital required for equipment procurement and the commencement of implementation.
   
Speaking at the signing ceremony, the Managing Director/Chief Executive Officer of REA, Abba Abubakar Aliyu, said the partnership would strengthen the financing ecosystem required to deliver renewable energy infrastructure at scale.
   
“One of the lessons from our experience under the Nigeria Electrification Project is that having a viable project and an approved grant is not always enough. Developers also need access to the capital required to procure equipment and commence implementation,” he stated.
   
“This partnership with Stanbic IBTC is therefore important because it connects our result-based financing framework with commercial finance, giving credible developers a stronger pathway to move projects from approval to delivery and, ultimately, connect more Nigerians to reliable electricity.” 
   
Head, Energy and Infrastructure, Stanbic IBTC Bank, Richard Inegbedion, said the bank’s participation reflected its commitment to infrastructure development and Nigeria’s energy transition.
   
Representing the renewable energy developer community, the Managing Director/Chief Executive Officer of Asolar Systems Nigeria Limited, Hakeem Shagaya, said that appropriately structured financing would be critical to delivering renewable energy solutions at the scale required under DARES.
   
Beyond lending, Stanbic IBTC will support the transaction through a collection platform designed to enhance financial inclusion and project sustainability, as well as financial advisory solutions. The bank will also link developers with Original Equipment Manufacturers (OEMs) and provide international trade tools where practicable.
   
REA will continue to provide programme-side oversight through developer prequalification, project approvals, grant agreements, authentication of relevant documentation, monitoring of connections and Independent Verification Agent (IVA) verification.
  
The MoU will remain in force throughout the tenure of the World Bank-funded DARES programme managed by REA and will terminate at the end of the programme and upon full repayment of facilities disbursed under the arrangement, subject to the terms of the agreement.