InfraCredit, a ‘AAA’-rated specialised infrastructure credit guarantee institution has announced the credit enhancement of ACOB Lighting Technology Limited, a renewable energy company’s debt issue. The facility came under a co-financing arrangement with the Climate Finance Blending Facility with £10 million seed funding from the United Kingdom Foreign, Commonwealth and Development Office (FCDO). It was the third transaction under the Climate Facility.
The InfraCredit’s Clean Energy Funding Programme (“CEFP” or the “Programme”) seeks to aggregate, de-risk and unlock domestic institutional investments to support eligible clean energy projects in Nigeria to contribute towards meeting the country’s universal electrification goal by 2030 and the SDG 7 target of ensuring access to affordable, reliable, sustainable, and modern energy for all, whilst putting the country on a path to achieve net zero emissions by 2060.
Speaking on the transaction, the Chief Executive Officer of ACOB Lighting Technology Limited Mr Alexander Obiechina stated: “This funding presents a significant opportunity for ACOB to actualise its vision of bridging the huge energy poverty gap that exists in the country using decentralised renewable energy technologies.
The local currency blended finance is no doubt a catalyst that unlocks the patient capital our sector has been yearning for over the years. ACOB is particularly grateful to InfraCredit and all the stakeholders that enabled this transaction including FCDO, the REA and the Nigeria Electrification Project, and is well-positioned to harness more opportunities like this, particularly innovative blended financing that addresses the Productive Use of Energy to stimulate demand and boost economic growth as we scale mini-grid deployment.”
The CEO of InfraCredit, Chinua Azubike, said: “We are pleased to have supported another indigenous Distributed Renewable Energy (DRE) company with the vision of increasing energy access in Nigeria through off-grid solar mini-grid infrastructure to access long term affordable local currency financing. The Nigerian domestic institutional investors continue to demonstrate their appetite to invest in climate-aligned infrastructure that enables more inclusive access to essential services such as energy. The success of this transaction would not have been possible without the use of the catalytic first-loss capital from the Foreign Commonwealth Development Office (FCDO), and Technical Assistance Facility from FSD Africa. Both support mechanisms, working together, have been instrumental in mobilising private sector and domestic institutional investors to invest in off-grid distributed renewable energy infrastructure with the potential impacts to create jobs, reduce GHG emissions and increase energy access for households and productive use.”
The UK Deputy High Commissioner in Lagos, Jonny Baxter said: “We are pleased that the UK-funded climate finance blended facility, managed by InfraCredit, continues to support green-certified local currency debt issue for off-grid solar in Nigeria. Distributed Renewable Energy is an essential solution to drive multiple goals of increasing reliable and efficient energy access in unserved and underserved areas in Nigeria, supporting Nigeria’s energy transition plan and net zero targets.”