Infracredit’s UK-supported Climate Finance Guarantee Mobilises Fund for Solar-powered Rural Telephony Project in Nigeria

InfraCredit, an AAA’-rated specialised infrastructure credit guarantee institution, has announced the credit enhancement of Hotspot Network Limited’s debt issue. 

This is under a co-financing arrangement with the £10 million Climate Finance Blending Facility (Climate Facility) funded by the United Kingdom Foreign, Commonwealth and Development Office (FCDO), the second transaction under the Facility.

According to a statement, the 7-year fixed-rate local currency debt issue will enable Hotspot to construct, install and commission 120 solar powered rural telecom base stations across 22 States in Nigeria (Project). 

Hotspot is a telecommunication infrastructure and solar-powered rural telephony network provider, using renewable energy and climate-smart technology in operating telecom sites in off-grid rural parts of Nigeria. Under the Project, Hotspot established the special purpose vehicle, Micropolitan Mobile Connectivity Limited to raise local currency finance from the debt capital markets, to build, own, and operate solar-powered mobile network base stations in select rural communities in collaboration with MNOs in Nigeria.  

Speaking on the transaction, the Managing Director of Hotspot stated: “We are very excited at this milestone transaction. Hotspot Network Limited is connecting the unconnected in Sub-Saharan Africa by providing mobile network access for unserved and underserved rural communities. We have a unique opportunity to accelerate digital inclusion in growth markets and digital infrastructure as a key driver of sustainable growth and shared prosperity. The InfraCredit led blended financing facility provides a unique opportunity for accelerating digital inclusion In Nigeria and the greater sub region. We specially thank our development partners facilitated through InfraCredit, including USTDA, FSD Africa, KFW and FCDO for co-travelling with us on this digital inclusion journey to self-reliance.”

The CEO of InfraCredit, Chinua Azubike, said: “At InfraCredit, we are all very excited about the uniqueness and impact of this transaction, enabling local currency finance that is designed to promote inclusive, sustainable infrastructure and foster innovation that would not have been possible without the smart use of catalytic capital from FCDO and our development partners. We believe that working with our development partners in leveraging private sector and domestic institutional investors to unlock climate-aligned inclusive digital infrastructure projects in off-grid unserved communities has the greatest potential to create most jobs, bridge the digital gender gap and lift more people out of poverty which aligns with our strategy to increase climate action and gender impact in our guarantee portfolio.”

The Acting UK Deputy High Commissioner in Lagos, Sally Woolhouse said: “The UK remains committed to increasing access to clean energy and digital connectivity in Nigeria, to drive sustainable and resilient growth, and support Nigeria in meeting its climate goals. We are very pleased that this innovative UK-funded blended finance facility, managed by InfraCredit, has supported the first local currency debt issue for solar powered rural telephony in Nigeria. Using a scalable approach, this UK-funded facility is mobilising domestic institutional investment into much needed climate aligned projects. By providing green and affordable financing for local developers, the Facility is creating access to digital infrastructure in unserved and underserved communities in Nigeria, for both households and businesses.”