.jpg)
In a strategic move to eliminate financing barriers for renewable energy developers, the Rural Electrification Agency (REA) has signed a Memorandum of Understanding (MoU) with Lotus Bank.
The collaboration establishes a landmark facility support strategy aimed at bridging the energy access gap and delivering electricity to unserved and underserved rural communities across Nigeria.
The agreement, signed on Monday, formalizes a partnership to provide bespoke project financing support to mini-grid developers participating in the Distributed Access to Renewable Energy (DARES) program.
DARES is a World Bank-supported scale-up of the Nigeria Electrification Project (NEP), implemented by the REA to increase private sector-led electricity access for households, public institutions, and commercial customers.
Under the terms of the MoU, Lotus Bank is making available a revolving credit facility of One Hundred Billion Naira (N100,000,000,000) for project developers to procure essential equipment for renewable energy projects.
This facility offers up to N8 Billion per developer with a tenure of up to 18 months. Furthermore, the Bank will provide up to 90% counterpart funding for projects approved under the result-based financing programs, subject to credit risk assessments.
Speaking at the signing ceremony, according a statement on Tuesday, the Managing Director/CEO of REA, Abba Abubakar Aliyu, emphasized the impact of the collaboration on the energy sector:
"This partnership with Lotus Bank is a significant milestone in our commitment to promoting universal access to affordable and sustainable electricity.
"By securing this N100 Billion credit facility, we are directly addressing the debt financing bottleneck that has historically hindered project developers. This ensures that reliable electricity can be delivered more efficiently to the rural communities that need it most, in line with our National Electrification Strategy."
Similarly, while reflecting on the bank’s role in driving sustainable development, the Managing Director of Lotus Bank, Isiaka Ajani-Lawal, stated;' "At Lotus Bank, we are proud to partner with the REA to support the growth of renewable energy infrastructure in Nigeria.
"Our commitment of N100 Billion is designed to foster financial inclusion in local communities while providing developers with the liquidity and advisory tools necessary for project success. This initiative is not just about power; it is about improving lives and supporting the MSMEs that drive our economy."
To ensure seamless execution, the REA will provide technical oversight by prequalifying developers, authenticating grant agreements, and utilizing Independent Verification Agents (IVAs) to confirm project connections.
Lotus Bank will complement these efforts by deploying a collection platform to enhance the financial sustainability of the projects and offering international trade tools to improve delivery efficiency.
The project is expected to significantly lower the financial risks for developers, reduce project delivery timelines, and accelerate the transition to clean energy across the federation.