GEAPP, CHD Pool $50M for Nigeria's Sustainability

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by KnowESG
KnowESG_Renewable energy investment in Nigeria
Image courtesy of Freepik

The Global Energy Alliance for People and Planet (GEAPP), in collaboration with Chapel Hill Denham (CHD), a Nigerian investment firm, has introduced a groundbreaking local currency subordinated debt vehicle known as the Energy Transition & Access Facility for Africa (ETAFA).

ETAFA, an innovative financing solution, aims to allocate $50 million towards supporting distributed renewable energy (DRE) projects in Nigeria. GEAPP will contribute an initial $10 million, mobilising an additional $40 million from the Chapel Hill Denham Nigeria Infrastructure Debt Fund.

ETAFA's financing structure involves low-cost, long-term loans denominated in Naira, providing affordability for DRE solutions, especially among lower-income consumers.

Recognised as the fastest and most cost-effective means to expedite access to clean electricity in Africa, DRE offers tremendous potential for Nigeria. However, the lack of subordinated capital and local currency financing for developers has impeded the growth of the DRE sector.

Developers' inability to access long-term local currency loans exposes them to potential losses due to currency fluctuations between their revenues and borrowings. ETAFA aims to overcome these barriers and unlock the full potential of DRE in Nigeria.

Bolaji Balogun, CEO of CHD, expressed appreciation for GEAPP's support, emphasising its alignment with two key strategic priorities: reducing the number of Nigerians without electricity access and accelerating the adoption of renewable energy sources.

CHD seeks to mobilise up to $1 billion for clean energy projects in Nigeria and Africa by 2030 through collaborations with global institutions like GEAPP. Additionally, the company aims to halve the number of people without access to modern energy in Nigeria and Africa within the same timeframe.

Stefanie Fairholme, Head of Investments at GEAPP, emphasised the paramount importance of renewable energy development for Nigeria's clean energy transition and the fulfillment of crucial climate targets while driving economic and social progress.

The partnership between GEAPP and CHD aims to tackle the barriers hindering Nigeria's clean energy transition by providing de-risking capital necessary to stimulate project financing that brings clean electricity to underserved communities, promoting their economic development and sustainable livelihoods.

This partnership forms a crucial part of GEAPP's broader impact objective, which includes enabling 4 million new mini-grid connections, reaching 20 million people, and generating 50,000 jobs in Nigeria.

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Source: GEAPP


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