In a decisive step to ease funding constraints facing renewable energy developers, the Rural Electrification Agency (REA) has signed a Memorandum of Understanding (MoU) with Lotus Bank to provide structured financial support for projects aimed at narrowing Nigeria’s energy access deficit.
Speaking at the signing ceremony, REA’s Managing Director and Chief Executive Officer, Abba Abubakar Aliyu, described the partnership as a major boost for the sector. He noted that the ₦100 billion facility directly addresses long-standing debt financing challenges confronting developers, adding that the initiative would fast-track delivery of reliable, affordable, and sustainable electricity to rural communities in line with the National Electrification Strategy.
The MoU formalises a financing framework targeted at mini-grid developers under the Distributed Access to Renewable Energy (DARES) initiative, a World Bank-backed expansion of the Nigeria Electrification Project (NEP). Under the agreement, Lotus Bank will provide a revolving credit facility of ₦100 billion, enabling developers to procure critical equipment. Each qualified developer can access up to ₦8 billion with a repayment tenor of up to 18 months. The bank will also offer up to 90 per cent counterpart funding for projects approved under result-based financing schemes, subject to credit risk assessments.
Lotus Bank’s Managing Director, Isiaka Ajani-Lawal, said the initiative is designed to foster financial inclusion in local communities while supporting MSMEs that drive Nigeria’s economy. “This collaboration strengthens the institutional framework for energy financing in Nigeria, ensuring that private sector participation is backed by robust capital,” he stated.
REA will provide technical oversight by prequalifying developers, authenticating grant agreements, and deploying Independent Verification Agents (IVAs) to confirm project connections. Lotus Bank will complement these efforts with a collection platform to enhance financial sustainability and international trade tools to improve delivery efficiency.
The REA, established under section 127 of the Electricity Act 2023, is tasked with electrifying unserved and underserved communities to catalyze economic growth and improve quality of life. It is currently implementing multiple programmes, including the Rural Electrification Fund (REF), Solar Power Naija (SPN), Energizing Education Programme (EEP), Energizing Economies Initiative (EEI), and the Distributed Access through Renewable Energy Scale-up (DARES).
Officials say the new financing partnership is expected to significantly lower financial risks for developers, reduce project delivery timelines, and accelerate Nigeria’s transition to clean energy across the federation.
By Blessing Bature, Abuja
