FG partners launch $300 million 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 Nigerian Distributed Renewable Energy Fund is jointly managed by the Sovereign Investment Authority of Nigeria and Africa50, with the aim of attracting public and private capital into projects such as mini-grids, standalone solar power systems and other decentralized electricity solutions.

This fund is primarily aimed at the community and business world which are still not served adequately by the national electricity network.

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

The partners said the launch marks the fund’s transition from the development and structuring stage to active capital deployment.

They said the initiative is designed to provide a dedicated financing platform for the distributed renewable energy market in Nigeria at a time when unreliable electricity supplies continue to push households and businesses to turn to generators and other alternative sources of electricity.

These funds are also aligned with Nigeria’s electricity access goals and Mission 300, a broader initiative targeting electricity connection for 300 million people across Africa by 2030.

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

It said, “This commercial launch signals increasing market readiness and investor confidence in the distributed renewable energy sector in Nigeria.

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“This funding represents an important step towards mobilizing the scale of capital needed to expand renewable energy and off-grid distribution solutions and reach communities and businesses that remain underserved by traditional energy infrastructure.”

Distributed renewable energy systems produce electricity closer to consumers, thereby reducing dependence on large centralized power plants and national transmission grids.

Managing Director and Chief Executive Officer of 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. This is a strategic signal to the market, investors, government and development partners that the distributed renewable energy market in Nigeria is investable, credible and ready to operate at scale,” said Umar-Sadiq.

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

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

“What differentiates the Nigerian DRE Fund is the strength of its partnerships: 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 investment opportunities and building a model that can scale across Africa.”

The World Bank provided initial assistance of $25 million through the International Development Association.

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

World Bank Group Operations Managing Director, 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 needed for job creation and economic transformation in Africa, and the Nigerian DRE Platform contributes through the bold, collaborative approach needed to accelerate it,” said Bjerde.

He added that “IDA’s initial contribution of $25 million reflects our commitment to bridging funding sources and providing real connections to people and communities across the continent.”

SEforALL Chief Executive Officer and Special Representative of the UN Secretary-General for Sustainable Energy for All, Damilola Ogunbiyi, said the funds will support Nigeria’s electricity access goals while advancing the goals of Mission 300.

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

“By creating a dedicated financing mechanism to scale up renewable energy distribution, Nigeria is showing how country-led action can translate Mission 300 ambitions into real investments and connections.”

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

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

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

He added that the model, along with knowledge exchange between Africa and India, could be replicated across the continent to attract investment on a large scale.

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

This approach is expected to help overcome the funding difficulties faced by renewable energy developers, especially projects that require long-term funding to provide electricity to communities and businesses outside of conventional grid infrastructure.

NSIA said the commercial launch provides “an important foundation for increasing distribution of renewable energy solutions across the country” as Nigeria pursues energy transition targets and universal electricity access.

The partners added that the fund is designed to expand beyond the initial investment and potentially provide a financing model that can be replicated in other African markets.

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

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