REA, Stanbic seal N100bn deal for renewable energy

Managing Director, Rural Electrification Agency, Dr Abba Aliyu

The Rural Electrification Agency has secured a N100bn financing facility from Stanbic IBTC Bank to support renewable energy developers and expand electricity access to unserved and underserved communities across Nigeria.

According to a statement by the Managing Director/CEO, Rural Electrification Agency, Abba Aliyu, the agreement would provide eligible developers participating in REA-led electrification programmes, including the World Bank-funded Distributed Access through Renewable Energy Scale-up Project, with access to finance for equipment procurement.

Under the memorandum of understanding signed between the two organisations, Stanbic IBTC will provide a N100bn revolving loan facility with a one-year tenor to eligible project developers.

The amount accessible to each developer will be determined on a case-by-case basis, subject to the underlying grant agreement, the developer’s capacity and the bank’s credit assessment.

Aliyu said the facility would help address one of the major challenges facing renewable energy project delivery, which is access to capital after project approval.

“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.

“This partnership with Stanbic IBTC is therefore important because it connects our results-based financing framework with commercial finance, giving credible developers a stronger pathway to move projects from approval to delivery and, ultimately, connect more Nigerians to reliable electricity,” he stated.

The partnership is expected to reduce financing constraints that have previously affected the pace of renewable energy project delivery.

The Head, Energy and Infrastructure, Stanbic IBTC Bank, Richard Inegbedion, said the bank’s participation reflected its commitment to infrastructure development and Nigeria’s energy transition.

“The energy access challenge requires strong collaboration between government, developers and financial institutions. At Stanbic IBTC, we recognise that renewable energy projects require financing structures that understand both the opportunities and the realities of the sector.

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“Through this partnership with REA, we are creating a financing platform that can help eligible developers access the capital they need to execute projects, while contributing to the development of sustainable energy infrastructure and economic activity across Nigeria,” he noted.

Representing the renewable energy developer community, the Managing Director/CEO, Asolar Systems Nigeria Limited, Hakeem Shagaya, maintained that appropriately structured financing would be critical to delivering renewable energy solutions at the scale required under DARES.

“For developers, access to finance is one of the most important factors determining how quickly an approved renewable energy project can move into implementation.

“A financing framework that is aligned with REA’s result-based structure can significantly improve our ability to procure equipment, mobilise resources and deliver projects within the required timelines.

“ We welcome this partnership because it brings the developer, government and financial sector closer together around a common objective, delivering reliable electricity to communities that need it,” Shagaya submitted.

Beyond the lending facility, Stanbic IBTC will support the transaction through a collection platform designed to enhance financial inclusion and project sustainability.

The bank will also provide financial advisory solutions, including linking developers with original equipment manufacturers and providing international trade tools where practicable.

REA will continue to provide programme-side oversight through developer prequalification, project approvals, grant agreements, authentication of relevant documentation, among others.

The agency said the collaboration was expected to strengthen private sector participation in Nigeria’s electricity access drive by improving access to debt financing, reducing financing-related delays and enabling developers to mobilise equipment and resources more effectively.

“The MoU will remain in force throughout the tenure of the World Bank-funded DARES programme managed by REA and will terminate at the end of the programme and upon full repayment of facilities disbursed under the arrangement, subject to the terms of the agreement,” the statement concluded.