InfraCredit mobilises Local Currency Debt for First Electric’s Energy Project

InfraCredit, a ‘AAA’-rated specialised infrastructure credit guarantee institution has announced its credit enhancement of First Electric Power and Automation Services Limited’s local currency debt issuance under a co-financing arrangement with the Climate Finance Blending Facility (CFBF).

This marks the first mesh-grid clean energy infrastructure project and the sixth transaction under the Facility, which was seeded with £10 million in concessional capital from the UK Foreign, Commonwealth & Development Office (FCDO) and later strengthened by a US$10 million investment from British International Investment (BII), alongside a US$20 million counter-guarantee facility.

The transaction will finance the construction and commissioning of 20 mesh grid electricity networks with a combined capacity of 724.8 kWp in underserved communities across Gombe, Nasarawa and Ondo states. Once operational, the project is expected electrify approximately 5,156 households and small businesses, create 616 jobs, and avoid 762 tonnes of CO₂ emissions annually, advancing Nigeria’s universal electrification goals and contributing directly to Sustainable Development Goal 7 (Affordable and Clean Energy).[SA1]

This transaction builds on the success of earlier projects supported through the Facility, which has so far deployed approximately ₦12 billion across five developers (Darway, Hotspot, ACOB, Prado and CEESOLAR), collectively reaching more than 28,000 beneficiaries, creating over 2,900 jobs, and installing approximately 1.8 MW of off-grid solar capacity. The CFBF has now enabled a mandated project pipeline of approximately ₦243.31 billion across 23 developers seeking financing, demonstrating its catalytic role in mobilising private capital for climate-aligned infrastructure and expanding distributed renewable energy (DRE) access nationwide.

UK Deputy High Commissioner in Lagos, Mr. Jonny Baxter, said: “The Climate Finance Blending Facility (CFBF), managed by InfraCredit and co-funded by the UK, continues to demonstrate its position as a pioneering investor for power sector solutions. This transaction marks the Facility’s first investment in innovative mesh grid projects, designed to lower the cost of distributed renewable energy solutions for rural and remote communities.”

Chief Executive Officer of InfraCredit, Mr. Chinua Azubike, said: “Our guarantee of First Electric under the Climate Finance Blending Facility marks the Facility’s first investment in mesh-grid infrastructure and underscores the scale and maturity the platform has now achieved in financing distributed renewable energy in Nigeria. With this sixth transaction, the Facility’s portfolio is expected to deliver electricity access to nearly 36,000 households and businesses, create over 4,000 jobs, and avoid more than 3,300 tonnes of carbon emissions annually across rural and underserved communities.

By combining concessional first-loss capital, bridge construction finance, and InfraCredit’s investment-grade guarantees, we are systematically closing long-standing financing gaps and enabling clean energy projects to reach financial close and scale sustainably within Nigeria’s domestic capital markets.”

Chief Executive Officer of First Electric Power and Automation Services Limited, Mr. Daniel Komolafe, said:

“This milestone reflects First Electric’s commitment to bridging Nigeria’s energy gap through innovation and collaboration. With InfraCredit’s support, we are demonstrating that clean energy solutions can be impactful, commercially viable, and sustainable. Every community we electrify helps power productivity, support women-led and small businesses, improve healthcare delivery, expand educational opportunities for children, and build a future where energy access drives meaningful social and economic impact.”

Chief Executive Officer of AMDA, Mr. Olamide Niyi-Afuye said: “This transaction demonstrates the transformative power of strategic partnerships in advancing energy access. As a valued AMDA member, First Electric’s collaboration with InfraCredit showcases a financing model that can unlock domestic capital and accelerate Distributed Renewable Energy (DRE) across Africa. By combining first-loss capital with local currency guarantees, we create a pathway for developers to scale and deliver reliable energy to millions. This approach is more than a success story; it’s a blueprint for universal energy access. Together, we can replicate this model and close Africa’s energy gap.”

The Project is registered under the World Bank Distributed Access through Renewable Energy Scale-up (DARES) Performance Based Grant Programme administered by the Rural Electrification Agency (REA). The REA is the official Government agency that promotes, coordinates and provides Rural Electrification across Nigeria.

InfraCredit signed a Memorandum of Understanding (MoU) in August 2022 with the REA to help eliminate long-term financing bottlenecks for off-grid operators in the energy sector by enabling credit enhancement and financing to private sector mini-grid developers to enable adequate power generation and supply to underserved and unserved areas.

The technical, legal, environmental, and social due diligence costs were supported by funding provided by FSD Africa under a Technical Assistance Agreement with InfraCredit to support first-time issuer costs for eligible projects that can issue climate-aligned local currency infrastructure debt.

Importantly, the transaction was further supported by InfraCredit’s Construction Finance Warehouse Facility (CFWF) — a bridge financing instrument funded by the Nigeria Sovereign Investment Authority (NSIA) which enables developers to access short-term construction liquidity ahead of long-term refinancing through InfraCredit-guaranteed bonds. The synergy between the NSIA-funded CFWF and the FCDO-funded CFBF underscores InfraCredit’s integrated approach to bridging the financing gap for sustainable infrastructure projects across Nigeria.

The CFBF, managed by InfraCredit, leverages subordinated first-loss capital from FCDO and technical assistance from FSD Africa, alongside InfraCredit’s ‘AAA’-rated guarantees, to de-risk and mobilise domestic institutional capital from pension funds and insurance firms for distributed renewable energy (DRE) projects across Nigeria.

This transaction also reflects the strategic partnership between InfraCredit and the Africa Minigrid Developers Association (AMDA), aimed at unlocking access to long-term domestic capital for AMDA member developers. First Electric, an active member of AMDA, is one of the African-owned minigrid companies benefiting from this partnership, which seeks to bridge the financing gap for minigrid and distributed renewable energy (DRE) projects through innovative blended finance and credit enhancement structures.