UK to Finance Nigeria’s Energy Projects With £10m

Nigeria’s energy access projects are set to receive a boost as the United Kingdom declared its £10m donation to the energy sector.

The United Kingdom, in its statement on Monday, said that the funds will finance energy access projects and aid Nigeria’s COP26 commitments.

The financial aid will make Nigerian investors focus more on low-carbon energy, supporting off-grid and low-carbon energy projects.

Investors King gathered that the funds will further encourage investments in local pension funds, insurance firms and other investment plans.

The UK financial aid will also enhance local funding for eligible off-grid clean energy infrastructures, like the solar mini-grid and home systems, clean cooking infrastructure and SME cold storage infrastructure in Nigeria.

“The UK is providing up to £10m of concessional aid to reduce the risk for pension and insurance funds to invest in energy access projects, and support Nigeria’s COP26 commitments.

“The financing will help Nigerian investors focus on low-carbon energy, supporting off-grid, low-carbon energy projects. The £10m will be blended to de-risk transactions and therefore mobilise domestic institutional investment from local pension funds, insurance firms and other local institutional investors,” the statement read.

Assuring Nigerians of it’s commitment to providing assistance for energy projects, the UK Minister for Africa, Vicky Ford said the UK government will aid a sustainable and resilient growth in the energy sector.

Ford maintained that the transaction between the two countries is essential for the growth of the sector.

He noted that the initiative would ensure energy is circulated to unserved and underserved communities while assisting local investors of the low carbon energy sector with affordable long-term financing to support scaling up of off-grid low carbon energy projects.

The minister added that “the initiative will support the implementation of Nigeria’s Nationally Determined Contributions plan, which Nigeria submitted to the UNFCCC before COP26, its Energy Transition Plan, which was presented by the Nigerian government at COP26, and Nigeria’s plans to increase energy access including the Solar Naija programme.

“The UK is committed to increasing both renewable energy and energy access in Nigeria, driving clean, sustainable and resilient growth. As the world looks to transition to clean growth, we are witnessing an era-defining opportunity for the private sector. This transaction is particularly exciting as it brings together UK government support with the institutional capital which is essential to grow the sector at scale,” he said.