The Rural Electrification Agency (REA) and Alpha Morgan Bank have signed a N50 billion financing agreement to support renewable energy projects and expand electricity access in unserved and underserved communities across Nigeria.
The partnership will provide financing for renewable energy developers implementing REA-supported projects, allowing them to fund project execution before accessing performance-based catalytic grants.
Speaking at the MoU signing ceremony in Abuja, REA Managing Director, Abba Aliyu, said the partnership was crucial as Nigeria’s electricity demand continues to rise due to population growth and increasing dependence on power across various sectors.
Aliyu described the current period as an “era of electricity,” noting that power would play an increasingly important role in transportation, agriculture, healthcare, education, digitalisation and artificial intelligence.
He said Nigeria’s population was growing faster than the pace of electrification, creating an urgent need for increased investment in the power sector. According to him, about $23 billion is required to address the country’s electricity access and reliability challenges, while less than $2.5 billion is currently available.
The REA boss said renewable energy, particularly solar power, would remain critical to closing the electricity gap due to declining solar generation costs and advances in battery storage technology.
He also disclosed that REA was expecting an additional $119 million from the Japan International Cooperation Agency (JICA) to support interconnected and isolated mini-grid projects.
Aliyu stressed the importance of local bank financing, particularly because renewable energy developers under REA’s performance-based programmes are expected to execute projects before receiving catalytic grants.
He said Nigerian banks were increasingly recognising renewable energy as a viable infrastructure investment, rather than a high-risk sector.
According to him, Alpha Morgan Bank could also benefit from opportunities within the wider renewable energy ecosystem, including the proposed Renewable Energy Asset Management Company (RAMCO), which REA plans to launch.
Representing Alpha Morgan Bank’s Managing Director, Ade Buraimo, Executive Director Doyin Anyaehie said the partnership was driven by the need to address the shortage of suitable financing structures in Nigeria’s power sector.
Buraimo said the country’s electricity challenge should not be measured only in terms of generation capacity, but also by its impact on businesses, healthcare facilities, schools and rural communities.
He said the N50 billion commitment was intended to generate measurable social and economic benefits, including improved business opportunities, better healthcare delivery, functional schools and stronger rural economies.
Buraimo assured renewable energy developers with viable projects of the bank’s willingness to provide appropriate financing structures and, where necessary, explore ways to reduce financing costs.
He said the bank would measure the success of the partnership by the positive changes created in communities where the projects are implemented.
Alpha Morgan Bank, he added, plans to remain involved beyond the initial financing arrangement and explore further opportunities across Nigeria’s growing renewable energy sector in partnership with REA.
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