The Rural Electrification Agency (REA) has signed a Memorandum of Understanding with Lotus Bank for a N100 billion revolving credit facility to expand renewable energy access to unserved and underserved rural communities across Nigeria.
The agreement was announced in a statement issued in Abuja on Tuesday.
REA described the partnership as a strategic intervention aimed at eliminating financing bottlenecks that have constrained renewable energy developers.
Under the terms of the MoU, Lotus Bank will provide a revolving credit facility of up to N8 billion per developer, with a tenure of up to 18 months, to support the procurement of critical equipment for renewable energy projects.
What they are saying
REA said the collaboration establishes a landmark financing framework to bridge Nigeria’s energy access gap and accelerate electricity delivery to rural communities. The facility is also expected to strengthen private sector participation in off-grid electrification.
- “This partnership is a critical step in unlocking affordable debt financing for renewable energy developers. By securing this N100 billion facility, we are removing one of the biggest barriers to scaling rural electrification projects and delivering reliable power in line with our National Electrification Strategy,” REA Managing Director, Abba Aliyu, said.
- Lotus Bank’s Managing Director, Isiaka Ajani-Lawal, said, “Our N100 billion commitment is structured to provide developers with the liquidity and advisory support required for successful project execution.”
He added that the initiative will stimulate MSME growth, create jobs and improve livelihoods in local communities.
REA noted that the bank will provide up to 90 per cent counterpart funding for projects approved under the results-based financing programme, subject to credit risk assessments.
The agency stated that the agreement significantly reduces financial risks for developers and shortens project delivery timelines.
More Insights
The agreement formalises project financing support for mini-grid developers participating in the Distributed Access to Renewable Energy (DARES) programme. DARES is a World Bank-supported scale-up of the Nigeria Electrification Project implemented by REA to expand private sector-led electricity access nationwide.
- REA will provide technical oversight by pre-qualifying developers and authenticating grant agreements.
- Independent Verification Agents will be deployed to validate project connections.
- Lotus Bank will deploy a dedicated collection platform to enhance project bankability and sustainability.
- The bank will also provide international trade instruments to improve supply chain efficiency.
- The N100 billion facility provides up to N8 billion per developer with a tenure of up to 18 months.
According to REA, the partnership strengthens Nigeria’s institutional framework for energy financing and supports the country’s transition to clean energy.
What you should know
REA recently signed an agreement with ECOWAS to deploy solar systems to 15 public institutions under the Regional Off-Grid Electricity Access Project.
The collaboration is expected to accelerate rural electrification and improve energy access in underserved communities.
The new financing arrangement signals a stronger push toward sustainable energy deployment, backed by structured capital support to drive universal electricity access.
