The Global Energy Alliance for People and Planet (GEAPP), in collaboration with Chapel Hill Denham (CHD), has established a new local currency subordinated debt vehicle
The Energy Transition & Access Facility for Africa (ETAFA) is financing initiative which will enable the deployment of US$50mn to support distributed renewable energy projects in Nigeria. An initial US$10mn contribution by GEAPP will be followed by an additional US$40mn from the CHD Infrastructure Debt Fund. ETAFA’s financing is structured as a Naira-denominated, low-cost long-term financing, which will directly contribute towards making distributed renewable energy solutions more affordable, particularly for lower income consumers.
According to GEAPP, while Nigeria is well positioned to reap the benefits of distributed renewable energy, the lack of subordinated capital and local currency financing for developers is hampering the sector’s growth. The inability to access long-date local currency financing exposes the sector developers to losses due to currency mismatches between revenues and borrowings. ETAFA will address these barriers and help unleash the potential of distributed renewable energy in the country.
“We welcome this support from GEAPP which will help Chapel Hill Denham with two of our strategic priorities,” commented Bolaji Balogun, CEO of CHD. “Reducing the number of Nigerians without any access to electricity; and accelerating the adoption of renewable sources of energy. With partnerships with global institutions such as GEAPP, CHD seeks to mobilise up to US$1bn for clean energy projects in Nigeria and Africa by 2030. It is also targeting to reduce the number of people without access to modern energy in Nigeria and Africa by half in the same timeframe.”
Stefanie Fairholme, GEAPP’s head of investments, remarked, “Renewable energy development is paramount for Nigeria to transition to clean energy and meet critical climate goals, while powering economic and social development. GEAPP’s partnership with CHD aims to tackle the barriers to Nigeria’s clean energy transition by providing the de-risking capital needed to stimulate the financing of projects that bring clean electricity to, and promote the economic development and sustainable livelihoods of, underserved communities.”
