REA, Stanbic seal N100bn deal for renewable energy

The Rural Electrification Agency (REA) has secured a N100 billion financing facility from Stanbic IBTC Bank to support renewable energy developers and improve electricity access in Nigeria. The agreement, signed between the two organisations, will provide eligible developers participating in REA-led electrification programs, such as the World Bank-funded Distributed Access through Renewable Energy Scale-up Project, with access to capital for equipment procurement.

The N100 billion revolving loan facility has a one-year tenor, with the amount accessible to each developer determined on a case-by-case basis, contingent on the developer's capacity and the bank's credit assessment. This partnership aims to address the challenge of access to capital after project approval, which hinders renewable energy project delivery.

The head of REA, Abba Aliyu, emphasized that the agreement connects the agency's results-based financing framework with commercial finance, enabling credible developers to move projects from approval to delivery, ultimately connecting more Nigerians to reliable electricity. Richard Inegbedion, Head of Energy and Infrastructure at Stanbic IBTC Bank, stated that the bank's participation reflects its commitment to infrastructure development and Nigeria's energy transition.

The bank's involvement is expected to reduce financing constraints that have previously slowed down renewable energy project delivery. Hakeem Shagaya, Managing Director/CEO of Asolar Systems Nigeria Limited, highlighted the importance of appropriately structured financing for delivering renewable energy solutions at the required scale under the Distributed Access through Renewable Energy Scale-up Project (DARES).

Stanbic IBTC will provide financial advisory solutions, including connecting developers with original equipment manufacturers and offering international trade tools where applicable. The MoU between REA and Stanbic IBTC will remain in force throughout the tenure of the World Bank-funded DARES programme and terminate upon full repayment of facilities disbursed under the arrangement.