- InfraCredit announces credit enhancement for Prado Power’s solar mini-grid project in Nigeria, backed by the £10 million Climate Finance Blending Facility from the UK’s FCDO.
- The initiative aims to support Nigeria’s electrification goal by 2030, funding solar projects in underserved communities in Benue and Akwa Ibom states.
InfraCredit, a specialised infrastructure credit guarantee institution with a ‘AAA’ rating, has announced the credit enhancement of Prado Power Limited’s Guaranteed Fixed-Rate Senior Green Infrastructure Forward Ijarah Lease Sukuk. This is part of a co-financing arrangement with the £10 million Climate Finance Blending Facility, funded by the United Kingdom’s Foreign, Commonwealth, and Development Office (FCDO). The announcement marks the fourth transaction under the Climate Finance Blending Facility.
The scheme aims to support clean energy projects in Nigeria, contributing to the country’s goal of achieving universal electrification by 2030. Through this initiative, InfraCredit is working on aggregating, de-risking, and unlocking domestic institutional investments that will help fund eligible projects in the clean energy sector. The Climate Finance Blending Facility plays a crucial role by providing subordinated first-loss capital, reducing project capital costs and attracting domestic institutional investors.
In this case, the enhanced Sukuk was used to fund Prado Power’s solar mini-grid project to provide power to unserved rural communities. The infusion of capital from the Climate Finance Facility helped de-risk the project, enabling InfraCredit to issue its “AAA”-rated Sukuk. This, in turn, crowded in investments from domestic institutional investors, leading to a blended affordable interest rate that would otherwise have been difficult to achieve. This type of financial structuring reduces the cost of capital for Prado Power and encourages greater participation from local investors in the clean energy sector.
This significant transaction represents the first blended local currency, Green Infrastructure Forward Ijarah Lease Sukuk, for Nigeria’s solar-powered rural infrastructure project. The mini-grid project, which focuses on providing reliable electricity to underserved regions, is a critical step toward meeting Nigeria’s energy access goals. The mini-grids will be located in communities across Benue and Akwa Ibom states, where power supply has historically been unreliable or non-existent.
Prado Power’s CEO, Washima Mede, expressed his excitement about the support from InfraCredit and the Climate Finance Blending Facility. He emphasised that the financing would enable the construction of four mini-grids and productive use hubs, providing clean energy solutions and stimulating local economic development in the targeted communities. Mede highlighted the importance of this partnership in helping the company achieve its objectives of providing sustainable energy access to remote areas in Nigeria.
Overall, this partnership underscores the growing role of blended finance in supporting clean energy initiatives in Nigeria and other emerging markets. Through innovative financing solutions like the Green Infrastructure Forward Ijarah Lease Sukuk, InfraCredit and its partners are helping to unlock much-needed investment in the country’s energy sector.