Nigeria, others to benefit from AfDB’s $11.3m energy fund

Nigeria and 13 other African countries are set to benefit from a $11.3m renewable energy financing initiative approved by the African Development Bank, aimed at expanding electricity access to underserved and fragile communities across the continent.,

The bank said the facility, designed to support Peace Renewable Energy Certificate (P-REC) mini-grid projects, will provide power to an estimated 856,000 people in energy-poor regions, while unlocking new funding channels for developers operating in high-risk markets.

The fund comprises a $5.65m grant from the AfDB, matched by an equal contribution from the Nordic Development Fund, bringing the total financing to $11.3m.

It will be jointly managed by Camco Clean Energy and Energy Peace Partners, the developer of the Peace Renewable Energy Certificate framework.

According to the AfDB, the initiative introduces an innovative financing model that leverages renewable energy certificates as a direct funding instrument for mini-grid deployment, particularly in conflict-affected and financially constrained environments.

Read also: Schneider Electric bets big on AI-era data centres as power demands surge

The certificates are generated exclusively from small-scale renewable energy projects and sold voluntarily to multinational corporations seeking to enhance the social and environmental impact of their sustainability commitments.

The facility will enter into long-term purchase agreements with eligible mini-grid developers across 14 frontier markets, including Nigeria, Burundi, Central African Republic, Chad, Democratic Republic of Congo, Ethiopia, Liberia, Mali, Niger, Sierra Leone, Somalia, South Sudan, Sudan, and Uganda.

Through this structure, developers will receive upfront capital in exchange for future certificate rights, providing critical liquidity in markets where access to commercial financing remains limited.

Analysts say the programme could be particularly significant for Nigeria, where inadequate power supply continues to constrain economic growth and industrial productivity, especially in rural and off-grid communities.

By providing non-dilutive, low-cost capital, the initiative is expected to accelerate mini-grid deployment and support the country’s broader electrification goals.

The AfDB noted that limited access to financing remains a major obstacle to achieving universal energy access in Africa, especially in fragile and conflict-affected states.

The P-REC Aggregation Facility is therefore positioned as a market-driven solution capable of bridging funding gaps while attracting private sector participation.

João Duarte Cunha, manager of the Renewable Energy Funds Division at the AfDB, said the initiative aligns with the bank’s strategic objective of advancing energy access across the continent.

He noted that innovative financing mechanisms such as the P-REC facility are essential to overcoming structural barriers in high-risk environments.