InfraCredit Secures a US$30 million Risk Sharing and Blended Local Currency Co-financing Facility from British International Investment to Support Decentralised Renewable Energy Projects in Nigeria

Lagos, 14 November 2024: InfraCredit, a ‘AAA’ rated specialised infrastructure credit guarantee institution, is pleased to announce that it has secured a US$30 million risk-sharing and blended local currency co-financing facility from British International Investment (BII), the UK’s development finance institution and impact investor, to support clean energy transition in Nigeria.

The US$30 million investment is a dual financing instrument combining a US$20 million (NGN32 billion) local currency counter-guarantee and a US$10 million (NGN16 billion) concessional financing to support decentralised renewable energy (DRE) projects, originated and guaranteed by InfraCredit. The concessional financing will be provided through the Climate Finance Blending Facility (CFBF) which is a catalytic first loss multi-donor facility. It aims to mobilise additional funding from development partners and domestic institutional investors to co-finance decentralised clean energy investments alongside InfraCredit’s local currency guarantees in Nigeria.

Nigeria has the world’s largest energy access deficit, with over 85 million people, or 43% of the population, without access to electricity. With electrification rates as low as 31% in some regions, it underscores the urgent need for DRE solutions such as solar mini-grids to reach those communities. The investment from BII will improve quality of life particularly in rural areas and lower-income groups by providing more reliable power supply for productive use and reducing reliance on diesel power.

BII’s investment will catalyse additional private institutional capital and scale the support for a wider range of DRE transactions, leveraging InfraCredit’s guarantee. It will reduce the risk profile of DRE projects and lower the cost of local currency debt for developers allowing them to reach low-income customers in Nigeria. InfraCredit’s pipeline of DRE projects has expanded consistently over the years, reaching US$497.37 million (NGN746.05 billion) and is projected to continue its upward trajectory in the coming years. This innovative Facility is projected to enable over 57,000 new energy connections, increase renewable energy capacity by 20.1 MWp, reach 564 communities, create 2,558 jobs, and reduce greenhouse gas emissions by 158.3 tonnes. Additionally, the investment is expected to mobilize private capital at scale, highlighting the role of sustainable finance in long-term sector growth.

Richard Montgomery CMG, British High Commissioner to Nigeria, commented: “It has been encouraging to see how the Climate Finance Blending Facility (CFBF) has successfully mobilised a total of US$11.48 million (NGN8.92 billion) to support four Green Certified Local Currency Debt Issuances for rural mini grids and solar powered telephony projects in Nigeria; with more projects in the pipeline. With BII’s latest investment, we look forward to amplifying the impacts through this facility, which was seeded with £10 million concessional funding by the UK Foreign, Commonwealth & Development Office in 2021.”

Benson Adenuga, Head of Office and Coverage Director, Nigeria at BII, said: “Expanding distributed renewable energy in Nigeria is not just an environmental necessity; it’s a path to empowering millions without power, bolstering economic resilience, and reducing costly reliance on diesel. As Nigeria’s energy demand rises, decentralized clean energy offers a reliable, scalable, and sustainable solution for communities nationwide. We are delighted to work with InfraCredit to mobilise more capital to drive this shift. It can redefine growth, from rural villages to bustling cities, lighting the way to a greener future.”

According to the Chief Executive Officer of InfraCredit, Chinua Azubike, “We are very delighted to work with BII through this innovative stapled investment of a subordinated first loss facility, alongside a counter-guarantee facility that will strengthen InfraCredit’s capacity to de-risk, reduce the capital cost and catalyse domestic institutional investments that will scale up renewable energy infrastructure for productive use in unserved and underserved markets in Nigeria. This transaction aligns with our strategy to collaborate with our development partners using proven and scalable funding models such as the Climate Finance Blending Facility to accelerate the mobilization of pools of domestic resources that will promote green growth by creating jobs, reducing poverty, promoting gender diversity and stimulating local economic growth in line with our country’s nationally determined contributions (NDCs).”

For more information, please contact:

Infrastructure Credit Guarantee Company Limited

Media Enquiries: [email protected]

Guarantee Enquiries: [email protected]

Phone: +234 6312300

Note to the Editor

About the CFBF

The Climate Finance Blending Facility (CFBF) is a catalytic first loss multi-donor facility seeded with £10 million concessional funding by the UK Foreign, Commonwealth & Development Office (FCDO) to mobilise additional funding from development partners and domestic institutional investors to co-finance off-grid clean energy investments alongside InfraCredit’s local currency guarantees in Nigeria. Please visit https://infracredit.ng/climate-facility/ to learn more about this facility.

About InfraCredit

InfraCredit is a ‘AAA’ rated specialised infrastructure credit guarantee institution backed by the Nigeria Sovereign Investment Authority, InfraCo Africa (Private Infrastructure Development Group Company), KfW Development Bank, Africa Finance Corporation, African Development Bank and Domestic Institutional Investors – Leadway Assurance Company Limited and AIICO Insurance Plc, to provide local currency guarantees and mobilize long term debt financing for infrastructure in Nigeria. InfraCredit’s guarantees act as a catalyst to attract domestic credit from pension funds, insurance firms and other long-term investors into credit-worthy infrastructure projects, thereby deepening the Nigerian debt capital markets. InfraCredit operates on a commercial basis with a developmental role and benefits from private sector governance. InfraCredit maintains the highest domestic financial strength ratings accorded to any financial institution by Agusto and Co. and Global Credit Ratings Co., two of the major domestic credit rating agencies and international rating agency, Fitch Ratings.

For more information, please visit www.infracredit.ng and follow us on Linkedin and X.

About British International Investment

British International Investment is the UK’s development finance institution and impact investor. As a trusted investment partner to businesses in Africa, Asia and the Caribbean, BII invests to create productive, sustainable and inclusive economies in our markets. Between 2022-2026, at least 30 per cent of BII’s total new commitments by value will be in climate finance. BII is also a founding member of the 2X Challenge which has raised over $33.6 billion to empower women’s economic development. The company has investments in over 1,580 businesses across 65 countries and total net assets of £8.5 billion. For more information, visit: www.bii.co.uk| watch here. Follow British International Investment on LinkedIn and X.

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