By Nneka Nwogwugwu
The United Kingdom’s Minister for Africa, Latin America, and the Caribbean, Vicky Ford, has pledged £10 million 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 £10 million will be blended to de-risk transactions and therefore mobilise domestic institutional investment from local pension funds, insurance firms and other local institutional investors.
This will help scale up domestic financing for eligible off-grid clean energy infrastructure, such as solar mini-grid and home systems.
Speaking on the financing, the UK Minister for Africa, Vicky Ford, said: “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.”
This innovative blended finance initiative will provide affordable long-term financing from local investors for the low carbon energy sector to support scaling up of off-grid low carbon energy projects in unserved and underserved communities.
This 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.
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