Get Guardian on GoogleBritish International Investment (BII), the UK’s development finance institution and impact investor, has provided a $7 million debt facility to Okra Solar to scale mesh-grid electricity connections across underserved communities in Nigeria.
The financing is expected to support the procurement of equipment for about 150,000 new connections, with the potential to provide clean electricity to up to 750,000 people in rural Nigeria.
The investment comes as Nigeria continues to grapple with a major electricity access deficit, with an estimated 90 million people lacking reliable and affordable power, according to BII. The financing is aimed at expanding an alternative distributed energy model that combines solar generation, battery storage and smart controls to supply neighbouring homes and businesses.
Okra currently has more than 13,000 households connected and over 2.3MW of installed capacity. BII said the new facility would enable the company to increase its connections by more than tenfold.
Beyond funding new connections, the facility is expected to improve Okra’s procurement capacity by allowing it to purchase manufacturing inputs, batteries and solar photovoltaic equipment upfront and in larger volumes.
According to BII, this could reduce equipment costs and cut delivery times to Nigeria from about four months to approximately two months.
The financing could also improve the economics of renewable energy projects for Okra’s developer customers by enabling them to bring projects online faster and access results-based grant payments earlier.
Okra Chief Executive Officer, Afnan Hannan, said the company previously ordered components only after transactions had closed and in relatively small batches. The new facility would enable it to stock long-lead components, batteries and solar PV equipment ahead of demand and reduce procurement costs.
The investment is also expected to support Nigeria’s distributed renewable energy market under the Distributed Access through Renewable Energy Scale-up (DARES) programme, implemented by the Rural Electrification Agency with World Bank support.
BII said mesh-grid projects are eligible under DARES, which provides results-based financing for new electricity connections.
The commercial potential of the model is illustrated by an Okra-connected phone-charging business in Nasarawa State, where weekly spending on a petrol generator reportedly fell from N60,000 to about N6,000, representing a 90 per cent reduction in energy costs.
Geoffrey Manley, Director and Head of Infrastructure & Climate Debt, Africa and South Asia at BII, said access to appropriate financing was critical to enabling innovative energy companies to scale.
He said the facility would allow Okra to procure critical components earlier and at greater scale, helping reduce costs and delivery times while demonstrating the commercial viability of mesh-grid technology in Africa’s distributed renewable energy market.
The investment qualifies as 100 per cent climate finance and under the 2X Challenge for women’s empowerment, according to BII.
