The Rural Electrification Agency and First City Monument Bank have signed a landmark agreement to launch a N100bn renewable energy financing facility.
The agreement supports the implementation of distributed access through the Renewable Energy Scale-Up initiative. It will enable the deployment of decentralised renewable energy projects aimed at delivering reliable power to approximately two million households in unserved and underserved areas nationwide.
The partnership, formalised on Thursday at FCMB’s headquarters in Lagos, will drive the scale-up of private sector-led renewable energy deployment, particularly in unserved and underserved communities.
The financing agreement is part of the implementation strategy for the Distributed Access through Renewable Energy Scale-Up initiative, a World Bank-supported programme designed to fast-track inclusive and sustainable power solutions.
A statement issued by the REA said the signing of the agreement between REA and FCMB signifies the commencement of private sector investment in the Rural Electrification Agency’s renewable energy space, which was catalysed by the $750m DARES World Bank funding.
The approval of DARES funding by President Bola Tinubu, its commencement, and the guidance of the Federal Ministry of Power will undoubtedly lead to increased private sector funding, accelerating the intended impact of supplying electricity to 17.5 million Nigerians in unserved and underserved communities.
Under this partnership, FCMB will provide a revolving loan facility of N1 bn per eligible mini-grid developer for a period of two years, with potential for scale-up.
The facility will serve as a critical financial instrument for developers engaged under REA’s DARES programme, which is an initiative designed to expand inclusive energy access and stimulate economic growth through the deployment of interconnected and isolated mini-grids, as well as productive-use applications.
Speaking at the event, the Managing Director/CEO of REA, Abubakar Aliyu, emphasised the strategic importance of the collaboration.
He stated, “This partnership signifies a significant milestone in addressing one of the biggest challenges in decentralised renewable energy deployment, access to finance. Through this facility, developers will have better access to funding that will enable them to scale and meet electrification targets, thus improving the quality of life in rural and peri-urban communities.”
Responding, the Managing Director of FCMB, Yemisi Edun, stated, ”Our partnership with the REA represents a pivotal step in our commitment to powering inclusive growth and economic resilience across Nigeria. Access to reliable energy is a catalyst for enterprise, education, and improved livelihoods; it is a critical development goal.
“Through this collaboration, we are combining financial innovation with infrastructure delivery to ensure that underserved communities are not left behind. Together, we are building pathways for people to thrive by unlocking the power of energy to transform homes, businesses, and entire communities.”
A key highlight of the launch was the introduction of a “Deal Room”. This is a dedicated platform for project developers to engage with REA and FCMB on project financing, structure, and disbursement processes. This will enable developers to better understand the eligibility criteria and project evaluation mechanisms.
The partnership structure provides that FCMB will finance up to 70 per cent of approved project costs, while REA will domicile performance-based grant payments into a reserve account within FCMB to further de-risk the transactions.