Africa50, in collaboration with its partners, Nigeria Sovereign Investment Authority (NSIA), Sustainable Energy for All (SEforALL) and the International Solar Alliance (ISA) have launched a $500 million fund dedicated to Distributed Renewable Energy (DRE) projects in Nigeria.
NSIA, SEforALL and Africa50 signed the Fund’s Heads of Terms agreement at the SEforALL Global Forum in Barbados last week.
The aim of the DRE Nigeria Fund, according to the parties, is to raise financing to offer tailored financial instruments, and attract private sector capital while addressing critical challenges such as currency volatility, tariff structures, and the limited availability of local currency financing options.
The fund will focus on investments in mini-grids, solar home systems, commercial and industrial (C&I) power solutions, embedded generation projects, and innovative energy storage technologies.
The fund to mobilise local currency financing
The fund is expected to help deliver more reliable and affordable electricity to Nigerian households and businesses. A central goal of the Nigeria DRE Fund is to mobilise local currency financing from pension funds, insurance companies, and other domestic institutional investors.
“The launch of the DRE Nigeria Fund marks a pivotal moment in our collective efforts to address Africa’s energy access challenges,” said Damilola Ogunbiyi, CEO of SEforALL.
“This Fund will attract the long-term patient capital required to scale projects, especially from institutional investors. With the Fund’s targeted focus on scaling up decentralized energy solutions, we are one step closer to achieving universal energy access across Nigeria,” Ogunbiyi added.
The DRE Nigeria Fund is set to receive catalytic capital from the International Solar Alliance (ISA), facilitated by the recently launched Africa Solar Facility.
“Mobilizing private investments and promoting catalytic finance through grants and equity is the key to a sustainable, energy-secure future for the Africa region which currently receives only 3% of global solar investments. We’ll begin with Nigerian homes and businesses and then take it to all countries of the continent,” said Ashish Khanna, Director General-Elect of the ISA.
Collaborative efforts to drive RE investments
At its core, the Fund’s mission is to mobilise institutional capital and strengthen collaborations with the Nigerian government and private sector to drive the expansion of renewable energy investments.
“This innovative collaboration aims to unlock the right financing instruments to fund projects at scale and help solve the energy access gap in Africa, bringing power to millions of Africans, driving economic growth for businesses and communities across the continent,” said Alain Ebobisse, Africa50 CEO.
In his remarks during the launch, Mr. Aminu Umar-Sadiq, MD & CEO, NSIA emphasized the fund’s strategic importance, “The DRE Africa Platform represents another major step in our commitment to unlocking Africa’s renewable energy potential. With the DRE Nigeria Fund, we are creating a scalable model to attract global investments, drive industrial development, and enhance energy access for millions of Nigerians and Africans at large.”
