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An ‘AAA’-rated specialised infrastructure credit guarantee institution, InfraCredit, has announced credit enhancement of Prado Power Limited’s Guaranteed Fixed-Rate Senior Green Infrastructure Forward Ijarah Lease Sukuk under a co-financing arrangement with the £10 million Climate Finance Blending Facility.
The scheme was funded by the United Kingdom Foreign, Commonwealth and Development Office (FCDO), the fourth transaction under the Facility.
According to the company, InfraCredit’s Clean Energy Funding Programme seeks to aggregate, de-risk, and unlock domestic institutional investments to support eligible clean energy projects in Nigeria to contribute towards meeting the country’s universal electrification goal by 2030 and the SDG 7 target of ensuring access to affordable, reliable, sustainable, and modern energy for all, whilst putting the country on a path to achieve net zero emissions by 2060.
Speaking on the transaction, the chief executive officer of Prado Power, Washima Mede stated, “Prado Power is excited to be supported by InfraCredit and the Climate Finance Blending Facility towards the construction of four (4) mini-grids and productive use hubs across communities in Benue and Akwa Ibom states. For us at Prado Power, it is important that energy infrastructure investments are accompanied by socio-economic improvements in the communities where we operate through job creation and improved livelihood across diverse groups.
Through the InfraCredit-backed senior debt and the Facility, we are accessing long-term blended capital that will be used to scale investments in mini-grids and productive use appliances for rural dwellers and smallholder farmers. We would like to acknowledge and appreciate the support of the FCDO and the team at InfraCredit for structuring the transaction with an eye on mitigating risks related to long-term infrastructure finance.”
The British deputy high commissioner in Lagos, Jonny Baxter said: “We are delighted to reach yet another milestone with the UK-funded Climate Finance Blended Facility playing a critical role in mobilizing more green-certified local currency debt for off-grid solar projects in Nigeria.
This Project demonstrates the importance of Distributed Renewable Energy in providing efficient and reliable productive use energy access in unserved and underserved regions, boosting economic activities, and ensuring a safe environment.”
The managing director/chief executive officer of Rural Electrification Agency (REA), Abba Aliyu said, “The Rural Electrification Agency (REA) is proud to support this groundbreaking transaction facilitated by InfraCredit and the Climate Finance Blending Facility, marking the first blended local currency Green Infrastructure Forward Ijarah Lease Sukuk for a solar-powered rural infrastructure project in Nigeria. This innovative Shari’ah-compliant financing model not only represents a significant milestone in closing Nigeria’s energy access gap but also aligns with REA’s vision to explore and adopt innovative financial frameworks that de-risk the sector while enhancing project sustainability. By leveraging such models, we aim to attract increased investment and ensure the long-term viability of renewable energy projects.’’
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