The UK is providing up to approximately US$11.2mn of concessional aid to reduce the risk for pension and insurance funds to invest in energy access projects, and support Nigeria’s COP26 commitments
The financing will help Nigerian investors focus on low carbon energy, supporting off-grid, low carbon energy projects. The amount will be blended to de-risk transactions and therefore mobilise domestic institutional investment from local pension funds, insurance firms and other local institutional investors.
This will help scale up domestic financing for eligible off-grid clean energy infrastructure, such as solar mini-grid and home systems, clean cooking infrastructure and SME cold storage infrastructure in Nigeria.
UK minister for Africa, Vicky Ford said, “The UK is committed to increasing both renewable energy and energy access in Nigeria, driving clean, sustainable and resilient growth. As the world looks to transition to clean growth, we are witnessing an era-defining opportunity for the private sector. This transaction is particularly exciting as it brings together UK government support with the institutional capital which is essential to grow the sector at scale.”
This initiative will provide affordable long-term financing from local investors for the low carbon energy sector to support scaling up of off-grid low carbon energy projects in unserved and underserved communities. It will also support the implementation of Nigeria’s Nationally Determined Contributions plan, Energy Transition Plan and plans to increase energy access including the Solar Naija programme.