Sunday, 27th November 2022
<To guardian.ng
Search
Breaking News:

InfraCredit unlocks domestic investments to support clean energy

By Helen Oji
14 November 2022   |   2:24 am
InfraCredit has announced the credit enhancement of Darway Coast Nigeria Limited’s green debt issuance under a co-financing arrangement with the £10 million Climate Finance Blending Facility funded by the United Kingdom Foreign

Clean energy

InfraCredit has announced the credit enhancement of Darway Coast Nigeria Limited’s green debt issuance under a co-financing arrangement with the £10 million Climate Finance Blending Facility funded by the United Kingdom Foreign, Commonwealth and Development Office (FCDO).

The financing arrangement is an initial transaction under InfraCredit’s Clean Energy Funding Programme.

According to the institution, the programme seeks to aggregate, de-risk and unlock domestic institutional investments to support eligible clean energy projects in Nigeria, contribute towards meeting the country’s universal electrification goal by 2030 and the SDG seven target of ensuring access to affordable, reliable, sustainable, and modern energy for all.

Recall that the UK had in February 2022, announced a £10 million local currency blended co-financing facility with InfraCredit to help de-risk, reduce capital cost and catalyse at least an equivalent amount in private investment from domestic institutional investors to support off-grid clean energy companies to increase energy access for unserved and underserved people as well as small businesses in Nigeria.

It is expected that the facility will be increased through funding by other development partners to co-finance a pre-assessed initial pipeline of over $128 million that will mobilise at least N26.8 billion ($64 million) of domestic institutional capital to construct 22.7 MW of isolated off-grid renewable energy projects in 580 unserved communities across 32 states in Nigeria.

The facility will connect 172,535 unserved households and small businesses, create 6,977 jobs and reduce 394,403 tonnes of GHG emissions.

The company said the initial transaction under the programme, was financed with the UK-funded facility through a blended instrument enabling domestic institutional investors to directly invest in a seven-year fixed rate local currency debt financing for the project, making it the first-ever certified local currency green debt issue for a solar mini-grid project in Nigeria.

The company stated that the financing will be utilised to construct isolated solar mini-grids with a total capacity of 526.1 kW in six communities without grid access within Rivers State and Abia State in Southern Nigeria.

Also on completion, the project is expected to electrify up to 7,711 unserved households and small businesses, create up to 497 temporary and permanent jobs and avoid 4,856 tonnes of GHG emissions whilst enhancing access to renewable energy for productive uses.

Managing Director of Darway Coast Nigeria Limited, Henry Ureh said for mini-grid developers, access to long-term affordable local currency finance is critical for sustainability.

According to him, the project would enable mini-grid developers to access patient green capital in naira from domestic institutional investors and to construct off-grid infrastructure for renewable energy access to unelectrified rural communities in Nigeria for productive use.

“We sincerely appreciate the team at InfraCredit and the FCDO for this novel structure which will reduce the financial burden of clean energy developers like Darway Coast, and help the off-grid renewable energy market to scale sustainably”.