The Rural Electrification Agency (REA) has secured a ₦100 billion financing facility from Stanbic IBTC Bank to support renewable energy developers and accelerate electricity access in unserved and underserved communities across Nigeria.
The facility, structured as a revolving loan arrangement, is designed to address a major financing challenge facing renewable energy developers: access to capital needed to procure equipment and commence projects after securing regulatory approval and grants.
The agreement was formalised through a memorandum of understanding between REA and Stanbic IBTC and will provide financing to eligible developers participating in REA-led electrification programmes, including the World Bank-funded Distributed Access through Renewable Energy Scale-up (DARES) Project.
Under the arrangement, Stanbic IBTC will provide a ₦100 billion revolving loan facility with a one-year tenor to eligible project developers.
The amount available to each developer will be determined on a case-by-case basis, taking into consideration the underlying grant agreement, the developer’s capacity and the bank’s credit assessment.
Bridging the Financing Gap
The Managing Director and Chief Executive Officer of REA, Abba Aliyu, said the financing arrangement was developed to address a gap identified from the agency’s previous experience implementing renewable energy projects.
He explained that securing project approval and an associated grant does not automatically translate into immediate implementation, as developers still require working capital to procure equipment and mobilise resources.
“One of the lessons from our experience under the Nigeria Electrification Project is that having a viable project and an approved grant is not always enough. Developers also need access to the capital required to procure equipment and commence implementation,” Aliyu said.
According to him, the partnership will link REA’s results-based financing structure with commercial lending, providing developers with a clearer pathway from project approval to implementation.
The arrangement is expected to reduce financing-related delays and accelerate the delivery of approved renewable energy projects to communities.
The Head of Energy and Infrastructure at Stanbic IBTC Bank, Richard Inegbedion, said the bank’s participation reflected its commitment to infrastructure development and Nigeria’s energy transition.
Read Also: dangote-slashes-diesel-price-by-n80
He said renewable energy projects require financing structures that take into account the opportunities and challenges specific to the sector.
“At Stanbic IBTC, we recognise that renewable energy projects require financing structures that understand both the opportunities and the realities of the sector,” Inegbedion said.
He added that the partnership would give eligible developers access to capital while supporting the development of sustainable energy infrastructure and stimulating economic activity across the country.
Developers Welcome Financing Support
Representing the renewable energy developer community, the Managing Director and Chief Executive Officer of Asolar Systems Nigeria Limited, Hakeem Shagaya, said access to appropriately structured financing would be critical to delivering renewable energy projects at the scale envisaged under DARES.
He noted that financing often determines how quickly an approved project can move from the planning stage to actual implementation.
“For developers, access to finance is one of the most important factors determining how quickly an approved renewable energy project can move into implementation,” Shagaya said.
He added that aligning financing with REA’s results-based structure could strengthen developers’ ability to procure equipment, mobilise resources and execute projects within stipulated timelines.
Beyond the ₦100 billion lending facility, Stanbic IBTC will provide additional financial infrastructure for participating developers.
The bank will operate a collection platform to support financial inclusion and project sustainability, while also providing financial advisory services.
These services will include facilitating connections between developers and original equipment manufacturers, as well as providing international trade solutions where practicable.
REA, meanwhile, will retain programme-level oversight, including developer prequalification, project approvals, execution of grant agreements and authentication of relevant documentation.
The agency said the partnership would deepen private-sector participation in Nigeria’s electricity access programme by improving developers’ access to debt financing and enabling them to mobilise equipment and other project resources more efficiently.
The MoU will remain in force throughout the tenure of the World Bank-funded DARES programme managed by REA. It will terminate at the end of the programme and following full repayment of facilities disbursed under the arrangement, subject to the terms of the agreement.
