Decarbonisation and scaling clean energy are top on the agenda of Nigeria’s FCMB Group in an environment overwhelmingly reliant on fossil fuel. Although the Group has much ground to cover, it has cut its carbon footprint considerably and scaled its financial commitment to businesses committed to clean energy.
First City Monument Bank, a subsidiary of the FCMB Group, has moved 150 (73%) of its pan-Nigeria branch network from grid/diesel generators to solar power. As a result, it is ahead of industry peers in the race toward a low-carbon future where clean energy takes centre stage. The same applies to its strides in financing renewable energy resources to support global decarbonisation efforts.
The lender is backing clean off-grid energy solutions to bridge the supply gap in Africa’s most populous nation as the demand for household and commercial energy rises exponentially. A radical departure from the country’s predominant energy source – fossil fuels.
Energy guarantees basic comfort and quality of life. It is an essential element of contemporary life that fuels productive activities such as commerce, manufacturing, agriculture, education, healthcare and more. For example, life without electricity, one of the many forms of energy, is tortuous and described as living in the dark.
Ladi Balogun, FCMB Group Chief Executive and contributing expert at the University of Oxford (Leading Sustainable Corporations Programme), said access to energy drives economic growth and development. He urged more commitment to clean energy finance to improve the quality of life and accelerate growth and development in developing and underdeveloped economies.
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Indeed, Nigeria, a developing economy with the lowest access to electricity globally, according to the Energy Progress Report 2022 by Tracking SDG 7, will benefit significantly from targeted off-grid interventions. It would ensure access to electricity for about 92 million persons out of the country’s 200 million population lacking access to power.
To bridge this gap, First City Monument Bank partnered with development finance institutions to provide targeted financing to improve Nigeria’s energy access through mini-grids and energy-efficient projects. The partner institutions include African Development Bank, Proparco and International Finance Corporation. In addition, there were project collaborations with the Nigerian Electrification Programme (NEP) and Nigeria Energy Support Programme (NESP) under the Rural Electrification Agency, Solar Naija Programme and the Central Bank of Nigeria.
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Yemisi Edun, Managing Director of the Bank, described FCMB’s bold intervention in the renewable energy sector as the solution to the energy shortfall challenge facing individuals and businesses in Nigeria. She believes it will unlock the sector’s potential and pave the way for more private sector investments in renewable energy projects.
Remarkably, the FCMB Group subsidiary has executed credit enhancement agreements worth over N21 billion to improve energy supply, enhance cost efficiency and access to clean energy. Its financing proposition allows value chain players in the renewable energy sector to access loans of up to 70% of their project cost without collateral under the World Bank/Rural Electrification Agency (REA) of Nigeria scheme.
Between June and July this year, the lender provided credit lines worth about N1.7 billion to firms operating in the renewable energy sector. Out of the funds, over N265m went into mini-grid projects, with a total PV capacity of 392KWp, in Rivers, Niger, Ebonyi state and Ondo States. It also financed three hybrid energy efficiency projects in Lagos and Abuja with about N330m. These projects increased access to sustainable energy sources for about 3,000 households and Small and Medium Scale Enterprises (SMEs) across the country. They now enjoy a constant electricity supply from clean and environmentally friendly solar, hydro and biomass sources.
A purpose beyond profit corporation, FCMB Group is building and driving an ecosystem that fosters inclusive and sustainable growth across Nigerian communities.