FG, partners launch $300m fund to expand off-grid electricity across Nigeria

The Federal Government and its development partners have launched a $300 million investment fund designed to accelerate the expansion of off-grid electricity and distributed renewable energy projects across Nigeria.

The Nigeria Distributed Renewable Energy Fund is being jointly managed by the Nigeria Sovereign Investment Authority and Africa50, with the aim of attracting both public and private capital into projects such as mini-grids, standalone solar systems and other decentralised power solutions.

The fund is particularly targeted at communities and businesses that remain inadequately served by the national electricity grid.

The NSIA, Africa50 and Sustainable Energy for All announced the commercial launch on the sidelines of the United Nations General Assembly, according to a statement issued by the NSIA on Monday.

The partners said the launch marked the transition of the fund from its development and structuring phase into active capital deployment.

They said the initiative was designed to provide a dedicated financing platform for Nigeria’s distributed renewable energy market at a time when unreliable electricity supply continues to push households and businesses towards generators and other alternative power sources.

The fund is also aligned with Nigeria’s electricity-access objectives and Mission 300, a broader initiative targeting electricity connections for 300 million people across Africa by 2030.

According to the partners, the launch reflects increasing investor interest in the country’s distributed renewable energy sector.

It said, “The commercial launch signals growing market readiness and investor confidence in Nigeria’s distributed renewable energy sector.

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“The Fund represents an important step towards mobilising the scale of capital required to expand off-grid and distributed renewable energy solutions and reach communities and businesses that remain underserved by traditional energy infrastructure.”

Distributed renewable energy systems generate electricity closer to consumers, reducing reliance on large centralised power stations and the national transmission network.

The Managing Director and Chief Executive Officer of the NSIA, Aminu Umar-Sadiq, said the launch represented an important stage in the development of Nigeria’s renewable energy investment market.

“This is a major development milestone. It is a strategic signal to markets, investors, governments and development partners that Nigeria’s distributed renewable energy market is investable, credible and ready to operate at scale,” Umar-Sadiq said.

The fund is expected to finance a range of projects, including mini-grids and standalone solar systems, as the country seeks to improve electricity access while increasing the share of cleaner energy in its power mix.

Africa50 Group Chief Executive Officer, Alain Ebobissé, said the initiative was strengthened by the combination of Nigerian expertise and international development-financing capabilities.

“What sets the Nigeria DRE Fund apart is the strength of the partnership: NSIA’s local market expertise, Africa50’s pan-African investment and fund management capabilities, SEforALL’s energy-access leadership, and the World Bank’s global energy thought leadership and catalytic capital,” he said.

“Together, we are turning Nigeria’s energy needs into investable opportunities and building a model that can scale across Africa.”

The World Bank is committing an initial $25 million to the fund through the International Development Association.

The contribution represents about 8.3 per cent of the fund’s $300 million target.

The World Bank Group’s Managing Director of Operations, Anna Bjerde, said the financing structure was intended to combine development funding with private-sector capital to expand access to electricity.

“Reliable and affordable energy is required for job creation and economic transformation in Africa, and the Nigeria DRE Platform contributes through a bold, collaborative approach needed to accelerate it,” Bjerde said.

She added that the World Bank’s “initial $25m IDA contribution reflects our commitment to bridging funding sources and delivering real connections to people and communities across the continent.”

The Chief Executive Officer of SEforALL and Special Representative of the United Nations Secretary-General for Sustainable Energy for All, Damilola Ogunbiyi, said the fund would support Nigeria’s electricity-access goals while advancing the objectives of Mission 300.

“The commercial launch of the Nigeria Distributed Renewable Energy Fund is a significant step towards delivering Nigeria’s electricity access ambitions and advancing the objectives of Mission 300,” Ogunbiyi said.

“By creating a dedicated financing mechanism to scale distributed renewable energy, Nigeria is demonstrating how country-led action can translate Mission 300’s ambition into concrete investment and connections.”

The Director General of the International Solar Alliance, Ashish Khanna, described the Nigerian fund as the first country-level demonstration connected to a wider continental financing platform under Mission 300.

Khanna said the arrangement could facilitate more efficient capital mobilisation, strengthen domestic renewable-energy markets and provide a framework that could be adopted in other African countries.

“The Nigeria DRE Fund represents an important milestone in the Mission 300 platform for Africa energy access by building an ecosystem of investment platforms for private sector-led distributed renewable energy across Africa,” Khanna said.

He added that the model, together with knowledge-sharing between Africa and India, could be replicated across the continent to attract investment at scale.

The partners said the fund was deliberately structured to use public and development financing as a catalyst for additional private-sector investment.

The approach is expected to help address the financing difficulties confronting renewable-energy developers, particularly projects that require long-term funding to provide electricity to communities and businesses outside conventional grid infrastructure.

The NSIA said the commercial launch provided “an important foundation for scaling distributed renewable energy solutions across the country” as Nigeria pursues its energy-transition and universal electricity-access targets.

The partners added that the fund was designed to expand beyond its initial investments and potentially provide a financing model that could be replicated in other African markets.

Established under the Nigeria Sovereign Investment Authority Act of 2011, the NSIA manages Nigeria’s sovereign wealth investments through the Stabilisation Fund, Future Generations Fund and Nigeria Infrastructure Fund.

Africa50 is an infrastructure investment platform backed by African governments and institutions, while SEforALL works with governments and other stakeholders to expand sustainable energy access.

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