By Benson Daniel
The Rural Electrification Agency, REA, has entered into a N50 billion financing partnership with Alpha Morgan Bank to accelerate the deployment of renewable energy projects and expand electricity access in unserved and underserved communities across Nigeria.
The financing arrangement is expected to provide renewable energy developers participating in REA led programmes with access to funds needed to commence and complete projects while awaiting performance based grants tied to project milestones.
Under the agreement, eligible developers can access revolving loans of up to N10 billion each, with proposed loan tenures ranging from 12 to 24 months, subject to the bank’s credit assessment and approval.
Alpha Morgan Bank is expected to provide up to 70 percent counterpart financing for qualifying projects, while REA will facilitate project approvals, grant agreements and verification processes.
The partnership is particularly targeted at developers participating in programmes such as the Distributed Access through Renewable Energy Scale up, DARES, project, which is designed to expand electricity access through decentralised renewable energy solutions.
REA Managing Director and Chief Executive Officer, Abba Abubakar Aliyu, said access to finance remained one of the major constraints limiting the delivery and expansion of decentralised renewable energy projects in the country.
He said the partnership would provide a practical financing mechanism that could enable developers to move more quickly from project approval to implementation while helping to expand reliable electricity access to communities that need it most.
Nigeria continues to face a significant electricity access and reliability challenge, with millions of households and businesses still lacking dependable power supply. The situation has also increased the reliance of businesses on diesel and petrol powered generators, raising operating costs across the economy.
The REA has warned that the country’s electricity financing requirements remain significantly higher than available funding. According to the agency, Nigeria requires about $23 billion in additional investment to improve electricity access and supply reliability.
The financing gap has made private sector participation increasingly important, particularly as demand for electricity continues to rise due to population growth, industrialisation, digitalisation and the expansion of data centres and other electricity intensive activities.
Renewable energy is expected to play an increasingly important role in meeting that demand because of declining solar technology costs and improvements in battery storage.
The partnership with Alpha Morgan Bank could also strengthen the role of domestic financial institutions in financing renewable energy infrastructure.
For many developers, access to affordable and timely financing remains a major hurdle because renewable energy projects often require substantial upfront investment before they begin generating sufficient revenue.
The bridge financing structure could therefore allow developers to secure the capital required to execute approved projects and subsequently access performance based grants after meeting agreed milestones.
Executive Director of Alpha Morgan Bank, Doyin Anyaehie, said the bank’s involvement was driven by the need to address the financing gap in Nigeria’s power sector and translate discussions about the electricity crisis into practical interventions.
She noted that unreliable electricity has a direct impact on rural businesses, healthcare facilities and schools, limiting economic activity and affecting the quality of essential services.
Beyond providing financing, the partnership is expected to support economic activity in communities where renewable energy projects are deployed.
Reliable electricity can help small businesses extend operating hours, reduce dependence on expensive generators, preserve medicines in health facilities and improve learning conditions in schools.
The initiative also comes as Nigeria seeks to attract more private capital into its energy transition and reduce the burden of inadequate electricity supply on economic growth.
REA has indicated that additional international financing is also expected to support mini grid development, while the agency continues to build a pipeline of renewable energy projects across the country.
The N50 billion facility therefore represents an important step towards strengthening the financial ecosystem required to expand off grid electricity infrastructure.
If successfully implemented, the partnership could help unlock more private investment in renewable energy, improve electricity access in underserved communities and support businesses that currently struggle with unreliable power.
For Nigeria’s broader economy, greater access to dependable and affordable electricity could reduce production costs, improve productivity and create new opportunities for businesses and households.
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