REA, Alpha Morgan Bank seal N50bn deal to fund renewable energy projects

Nigeria's Rural Electrification Agency (REA) has partnered with Alpha Morgan Bank to inject N50 billion into renewable energy projects, aiming to boost electricity access across the nation. This significant financing agreement is designed to accelerate the deployment of clean energy solutions, particularly in communities that currently lack reliable power.

The collaboration will see Alpha Morgan Bank offer revolving loans of up to N10 billion per eligible developer. These loans will have tenures ranging from 12 to 24 months, contingent on the bank's credit assessment. Alpha Morgan Bank will also provide up to 70 percent of the counterpart funding for qualifying projects, underscoring a strong commitment to the initiative.

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Access to finance remains critical to the successful delivery and scale-up of decentralised renewable energy projects.

Under the framework, the REA will manage project approvals, grant agreements, and verification processes. Meanwhile, Alpha Morgan Bank will handle the financing and provide financial advisory support to the developers. This division of responsibilities is expected to streamline the process and expedite the delivery of much-needed electricity infrastructure.

REA Managing Director/CEO Abba Aliyu highlighted that the partnership addresses a critical financing gap for renewable energy developers. He emphasized the growing electricity demand in Nigeria, driven by population growth and increasing digitalization, making renewable energy, especially solar, a crucial component of the country's future energy mix. Aliyu stressed the importance of domestic financial institutions in closing the electricity access and reliability gaps.

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Nigeria’s electricity demand would continue to rise rapidly, driven by population growth, expanding electrification, digitalisation, artificial intelligence, data centres and the increasing electrification of transportation, agriculture, healthcare and other sectors.