Vs part of the move to eliminate financing barriers for renewable energy developers, the Rural Electrification Agency (REA) has signed a Memorandum of Understanding (MoU) with Lotus Bank that will establish 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 formalised a partnership to provide bespoke project financing support to mini-grid developers participating in the Distributed Access to Renewable Energy (DARES) program, 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.
The facility offers up to N8 billion per developer with a tenure of up to 18 months, as 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, the Managing Director/CEO of REA, Abba Abubakar Aliyu, emphasised the impact of the collaboration on the energy sector.
He said, “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.”
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 utilising Independent Verification Agents (IVAs) to confirm project connections, while the 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 collaboration not only strengthens the institutional framework for energy financing in Nigeria but also ensures that private sector participation is backed by robust capital.
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.
Similarly, the Agency, in a major step toward improving electricity access in public institutions, has signed a Memorandum of Understanding (MoU) with the Economic Community of West African States (ECOWAS) Commission under the Regional Off-Grid Electricity Access Project (ROGEAP). The agreement provides grant funding support from ECOWAS for the electrification of 15 public health and education facilities in Nigeria using solar photovoltaic (PV) systems.
Following the signing of the REA-ECOWAS MoU, REA also entered into a separate agreement with the Niger State Government to facilitate state-level collaboration and co-financing for selected project sites within the state.
The ECOWAS partnership marks the formal commencement of Nigeria’s pilot implementation phase under ROGEAP, which is a regional initiative supported by the World Bank to expand off-grid electricity access across West Africa and the Sahel.
Under the agreement, ECOWAS will provide a grant of $700,000 to support the installation of solar PV systems in rural health centres and schools located in the FCT, Niger State, and Nasarawa State. The project will be implemented by REA as the technical and financial implementing agency.
REA’s Abubakar Aliyu described the agreement as a strong demonstration of regional collaboration driving national development.
“This partnership with ECOWAS reinforces Nigeria’s commitment to expanding reliable electricity access to critical public institutions. Electrifying health centres and schools means improving healthcare delivery, enhancing learning conditions and strengthening community development,” he said.
Speaking on the regional significance of the project, President of the ECOWAS Commission, Omar Alieu Touray, said, “This pilot phase in Nigeria is a cornerstone of our regional strategy to eliminate energy poverty. By providing sustainable solar solutions to schools and clinics, we are not just lighting up buildings; we are powering the future of West Africa. This collaboration with the REA demonstrates how regional grants can be effectively localised to touch the lives of the most vulnerable citizens.”
To ensure effective implementation, a dedicated Project Implementation Unit (PIU) will be established within REA, working closely with the ROGEAP Project Implementation Unit and an established Steering Committee. In alignment with the ECOWAS agreement, REA also signed an MoU with the Niger State Government to enable access to ECOWAS funding and provide counterpart support for project sites within the state. The Niger State Government will collaborate with REA on coordination, co-financing, and monitoring of installations in selected facilities.
Expressing his support for the subnational partnership, the Governor of Niger State, Mohammed Umar Bago, said, “Our partnership with the REA is a testament to our administration’s ‘New Niger’ agenda, which prioritises sustainable infrastructure. By implementing these solar projects, Niger State is ensuring that our rural health and educational facilities have the reliable power they need to serve our people effectively. We remain committed to providing the necessary counterpart support to make this initiative a lasting success.”
This dual-level partnership structure with ECOWAS and subnational cooperation with Niger State strengthens institutional coordination and ensures efficient delivery of the pilot project. The project is expected to improve energy reliability in rural public facilities, reduce dependence on diesel generators, lower operating costs, and promote clean energy adoption in line with Nigeria’s national energy policies.