Engie Energy Access, a minigrids solution provider in Africa, and CrossBoundary EnergyAccess Nigeria (CBEA), a project financier of minigrids in Africa, have reached a project finance agreement to build a $60 million portfolio of minigrids in Nigeria. This is the largest minigrid project finance transaction in Africa to date, with the projects expected to connect more than 150,000 people to electricity in Nigeria for the first time.
Construction of the minigrids will happen over the next four years. The electricity will be provided to residential, commercial, and productive customers. This is expected to have a direct impact on the agricultural productivity, light-scale construction, and industrial activity in those communities.
CBEA will own the projects and finance the development and construction activities, according to a company statement. Engie will provide long-term operations and maintenance services.
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CBEA uses a blended finance approach to invest in minigrids and will provide the private capital for the transaction alongside the Performance Based Grant (PBG) funded by the World Bank and administered by the Rural Electrification Agency (REA) and the Nigeria Electrification Project (NEP), according to the company.
“Financing structures like the one between CBEA and Engie in Nigeria provide a framework for bringing even more private capital into the sector,” said Tessa Dignam, senior legal counsel at CBEA.
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