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REA and Stanbic IBTC have signed a ₦100bn financing agreement to support eligible renewable energy developers working on electricity access projects across Nigeria.
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The one-year revolving facility is designed to bridge the funding gap between project approval and implementation, allowing developers to finance equipment procurement and mobilise resources.
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The facility will support developers under REA-led programmes, including the World Bank-funded DARES project, while Stanbic IBTC will also provide trade and financial advisory support.
October 8, (THEWILL) – The Rural Electrification Agency (REA) has secured a ₦100bn financing facility from Stanbic IBTC Bank to support renewable energy developers and accelerate electricity access in unserved and underserved communities across Nigeria.
The facility, structured as a revolving loan arrangement, is expected to address one of the major financing constraints confronting renewable energy developers: the availability of capital to procure equipment and commence projects after securing approval and grants.
The agreement was formalised through a memorandum of understanding between REA and Stanbic IBTC Bank and will provide financing to eligible developers participating in REA-led electrification programmes, including the World Bank-funded Distributed Access through Renewable Energy Scale-up (DARES) Project.
Under the arrangement, Stanbic IBTC will provide a ₦100bn revolving loan facility with a one-year tenor to eligible project developers.
The amount available to individual developers will be determined on a case-by-case basis, taking into account the underlying grant agreement, the developer’s capacity and the bank’s credit assessment.
Bridging Gap Between Approval And Delivery
The Managing Director/Chief Executive Officer of REA, Abba Aliyu, said the financing arrangement was designed to address a gap identified from the agency’s previous experience with renewable energy projects.
According to him, securing project approval and an associated grant does not necessarily guarantee immediate implementation because developers still require working capital to procure equipment and mobilise resources.
“One of the lessons from our experience under the Nigeria Electrification Project is that having a viable project and an approved grant is not always enough. Developers also need access to the capital required to procure equipment and commence implementation”, Aliyu said.
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He added that the partnership would connect REA’s results-based financing structure with commercial lending, giving developers a clearer route from project approval to implementation.
The arrangement is expected to reduce financing-related delays and improve the pace at which approved renewable energy projects are delivered to communities.
The Head, Energy and Infrastructure, Stanbic IBTC Bank, Richard Inegbedion, said the bank’s participation reflected its focus on infrastructure development and Nigeria’s energy transition.
He said renewable energy projects required financing structures that recognised the specific opportunities and challenges within the sector.
“At Stanbic IBTC, we recognise that renewable energy projects require financing structures that understand both the opportunities and the realities of the sector”, Inegbedion stated.
He added that the partnership would provide eligible developers with access to capital while supporting the development of sustainable energy infrastructure and economic activity across the country.
Developers Seek Financing At Implementation Stage
Representing the renewable energy developer community, the Managing Director/Chief Executive Officer of Asolar Systems Nigeria Limited, Hakeem Shagaya, said access to appropriately structured financing would be critical to delivering renewable energy projects at the scale envisaged under DARES.
He noted that financing often determines how quickly an approved project can move from the planning stage into actual implementation.
“For developers, access to finance is one of the most important factors determining how quickly an approved renewable energy project can move into implementation”, Shagaya noted.
He said aligning financing with REA’s results-based structure could improve developers’ ability to procure equipment, mobilise resources and execute projects within stipulated timelines.
Beyond the ₦100bn lending facility, Stanbic IBTC will provide additional financial infrastructure for participating developers.
The bank will operate a collection platform intended to support financial inclusion and project sustainability, while also offering financial advisory solutions.
These services will include facilitating connections between developers and original equipment manufacturers, as well as providing international trade tools where practicable.
REA, on its part, will retain programme-side oversight through activities including developer prequalification, project approvals, execution of grant agreements and authentication of relevant documentation.
The agency said the partnership would strengthen private-sector participation in Nigeria’s electricity access programme by improving access to debt financing and enabling developers to mobilise equipment and other project resources more efficiently.
The MoU will remain in force throughout the tenure of the World Bank-funded DARES programme managed by REA and will terminate at the end of the programme and after full repayment of facilities disbursed under the arrangement, subject to the terms of the agreement.
Ogochukwu Onwaeze is a writer specializing in business and economic journalism. At THEWILL News Media, she translates market trends, financial developments, and policy shifts into clear and engaging stories.
