Agency signs N50bn financing pact with Alpha Morgan Bank to accelerate renewable energy projects in underserved communities
The Managing Director and Chief Executive Officer of the Rural Electrification Agency, Abba Abubakar Aliyu, has said Nigeria needs about $23 billion to address its electricity challenges and improve the reliability of power supplies across the country.
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Aliyu disclosed this at the weekend when the REA signed a N50 billion Memorandum of Understanding with Alpha Morgan Bank to accelerate electricity projects serving underserved communities.
The REA Seeks $23bn funding requirement comes as the Federal Government seeks to expand access to reliable electricity through decentralised renewable energy projects, particularly in rural and underserved areas where conventional grid supply remains limited.
Aliyu said the financing currently available to tackle the country’s electricity challenges remains significantly below what is required, making continued mobilisation of funds from domestic and international partners essential.
“That is why we need to continue to crowdfund this financing. And we are expecting any moment from now additional financing of $119 million from Japan International Corporation Agency (JICA),” he said.
According to Aliyu, the expected JICA funding will support the deployment of both interconnected and isolated mini-grids, helping extend electricity services to communities that remain inadequately served by the national grid.
Under the agreement with Alpha Morgan Bank, the financial institution will provide up to N50 billion in project financing to eligible renewable energy developers participating in REA-led programmes, including the Distributed Access through Renewable Energy Scale-up Project, known as DARES.
Eligible developers will also have access to revolving loans of up to N10 billion per developer, with proposed repayment periods ranging from 12 to 24 months, subject to the bank’s credit assessment and approval.
Alpha Morgan Bank will provide up to 70 per cent counterpart funding for qualifying projects under the arrangement.
The partnership is intended to address one of the major obstacles confronting renewable energy developers in Nigeria: access to affordable and timely financing.
Aliyu said improved access to credit would enable developers to procure equipment, complete projects more efficiently and expand electricity services to households, public institutions and businesses in rural and underserved communities.
“Access to finance remains critical to the successful delivery and scale-up of decentralised renewable energy projects,” he said.
“This partnership provides a practical financing mechanism that can help developers move from project approval to implementation more quickly, while expanding reliable electricity access to communities that need it most.”
The REA chief said the collaboration would also deepen private-sector participation in Nigeria’s energy transition while helping to reduce the country’s electricity access gap.
For Alpha Morgan Bank, the partnership represents an opportunity to deploy structured financing towards projects with direct economic and social benefits.
The bank’s Managing Director and Chief Executive Officer, Ade Buraimo, represented at the signing by Executive Director Doyin Anyaehie, said the agreement reflected the institution’s commitment to sustainable development through innovative financing.
“Access to reliable electricity is fundamental to economic growth and improved livelihoods.
Through structured financing and advisory support, our collaboration with REA will help bridge the gap between renewable energy projects and the capital required to deliver them,” Buraimo said.
He noted that reliable electricity was particularly important to small and medium-sized enterprises and rural communities that could not sustainably afford alternative sources of power.
“Alpha Morgan Bank is proud to partner with REA to provide financing to eligible renewable energy developers under the DARES programme for the provision of reliable electricity to underserved communities,” he added.
Beyond project financing, the agreement will provide eligible developers with financial advisory support. REA, meanwhile, will facilitate project approvals, grant agreements and verification processes.
The arrangement is expected to strengthen the connection between public-sector funding and private-sector capital, allowing renewable energy developers to move approved projects into implementation more efficiently.
Nigeria has struggled with inadequate and unreliable electricity supply for decades, with limited generation capacity, transmission constraints, distribution losses and insufficient investment continuing to affect households and businesses.
The Federal Government has increasingly turned to decentralised renewable energy, including mini-grid systems and other off-grid solutions, as a means of reaching communities where extending conventional grid infrastructure is difficult or uneconomical.
Also read: World Bank targets 32m Nigerians with new power plan
The latest financing partnership therefore provides a significant boost to the country’s renewable energy drive, although the scale of the $23 billion funding requirement underscores the considerable investment still needed to deliver reliable electricity nationwide.
Peculiar Adirika is a journalist and contributor to Freelanews.com, covering news, business, and public affairs.
