InfraCredit, Nigeria’s ‘AAA’-rated specialised infrastructure credit guarantee institution, has provided credit enhancement for a local currency debt issuance by First Electric Power and Automation Services Limited, backing a clean energy project under a co-financing arrangement with the Climate Finance Blending Facility.
The transaction marks the Facility’s first mesh-grid clean energy project and its sixth deal overall, highlighting the growing role of blended finance in mobilising domestic capital for distributed renewable energy.
The Facility was seeded with £10 million in concessional capital from the UK Foreign, Commonwealth and Development Office and later reinforced by a $10 million investment from British International Investment, alongside a $20 million counter-guarantee facility.
Proceeds from the debt issuance will fund the construction and commissioning of 20 mesh-grid electricity networks with a combined capacity of 724.8 kilowatt-peak across underserved communities in Gombe, Nasarawa and Ondo states.
Once operational, the project is expected to electrify about 5,156 households and small businesses, create 616 jobs and avoid an estimated 762 tonnes of carbon emissions annually, supporting Nigeria’s universal electrification drive and its clean energy transition.
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The deal builds on earlier projects supported through the Facility, which has deployed about N12 billion across five developers, including Darway, Hotspot, ACOB, Prado and CEESOLAR. Those projects have reached more than 28,000 beneficiaries, created over 2,900 jobs and installed roughly 1.8 megawatts of off-grid solar capacity.
InfraCredit said the platform has now enabled a mandated project pipeline of about N243.31 billion across 23 developers seeking financing, underlining its catalytic role in crowding in private capital for climate-aligned infrastructure.
Jonny Baxter UK’s deputy High Commissioner in Lagos said the investment reflects the Facility’s role in supporting “innovative power solutions” for rural and remote communities.
InfraCredit Chief Executive Officer Chinua Azubike said the guarantee underscores the scale the platform has achieved in financing distributed renewable energy, adding that the portfolio is expected to deliver electricity to nearly 36,000 households and businesses while cutting emissions. “We are closing long-standing financing gaps,” he said.
Daniel Komolafe, Chief Executive Officer of First Electric Power and Automation Services, said the deal showed that clean energy projects could be “commercially viable and impactful,” particularly for underserved communities.
Olamide Niyi-Afuye, Chief Executive Officer of the Africa Minigrid Developers Association, said the structure offers a “replicable model” for unlocking domestic capital and accelerating distributed renewable energy across Africa.
The project is registered under the World Bank-supported Distributed Access through Renewable Energy Scale-up programme administered by Nigeria’s Rural Electrification Agency, with which InfraCredit signed a memorandum of understanding in 2022 to ease long-term financing constraints for off-grid developers.
Additional support came from InfraCredit’s Construction Finance Warehouse Facility, a bridge financing instrument funded by the Nigeria Sovereign Investment Authority that provides short-term construction liquidity ahead of long-term refinancing through InfraCredit-guaranteed bonds. Technical, legal and environmental due-diligence costs were supported by FSD Africa under a technical assistance agreement.
InfraCredit said the combination of concessional first-loss capital, bridge finance and investment-grade guarantees is designed to de-risk projects and attract domestic institutional investors such as pension funds and insurers, deepening Nigeria’s local capital markets while accelerating clean energy deployment nationwide.