GEAPP and Chapel Hill Denham mobilise US$50M to boost renewable energy in Nigeria
The Global Energy Alliance for People and Planet (GEAPP) in collaboration with Nigerian investment firm, Chapel Hill Denham (CHD), has established a new local currency subordinated debt vehicle: the Energy Transition & Access Facility for Africa (ETAFA).
ETAFA is an innovative financing initiative, which will enable the deployment of US$50M to support distributed renewable energy (DRE) projects in Nigeria. GEAPP will contribute an initial US$10M, which will in turn mobilise an additional US$40M from the Chapel Hill Denham Nigeria Infrastructure Debt Fund.
ETAFA’s financing is structured as a Naira-denominated, low-cost long-term financing, which will directly contribute towards making DRE solutions more affordable, particularly for lower income consumers.
DRE is acknowledged to be the fastest and most cost-effective solution to accelerate clean electricity access to the African continent. While Nigeria is well positioned to reap the benefits of DRE, the lack of subordinated capital and local currency financing for developers is hampering the DRE sector’s growth.
The inability to access long-dated local currency financing exposes DRE developers to losses due to currency mismatches between their revenues and borrowings. ETAFA will address these barriers and help unleash the full potential of DRE in the country.
“We welcome this support from GEAPP which will help Chapel Hill Denham with two of our strategic priorities,” said Bolaji Balogun, CEO of CHD. “Reducing the number of Nigerians without any access to electricity; and accelerating the adoption of renewable sources of energy. With partnerships with global institutions such as GEAPP, CHD seeks to mobilise up to US$1 billion for clean energy projects in Nigeria and Africa by 2030. It is also targeting to reduce the number of people without access to modern energy in Nigeria and Africa by half in the same timeframe.”
“Renewable energy development is paramount for Nigeria to transition to clean energy and meet critical climate goals, while powering economic and social development” says Stefanie Fairholme, GEAPP’s Head of Investments. “GEAPP’s partnership with CHD aims to tackle the barriers to Nigeria’s clean energy transition by providing the de-risking capital needed to stimulate the financing of projects that bring clean electricity to, and promote the economic development and sustainable livelihoods of, underserved communities.”
This new partnership forms part of GEAPP’s broader impact goal to enable 4 million new mini-grid connections, reaching 20 million people, while creating 50,000 jobs in Nigeria.
The Global Energy Alliance for People and Planet (GEAPP) is an alliance of philanthropy, governments in emerging and developed economies, and technology, policy, and financing partners. Our common mission is to enable LMIC’s shift to a clean energy, pro-growth model that accelerates universal energy access and inclusive economic growth, while supporting the global community to meet critical climate goals during the next decade.
As an alliance we aim to reduce 4 gigatons of future carbon emissions, expand clean energy access to one billion people, and enable 150 million new jobs. With philanthropic partners, IKEA Foundation,
The Rockefeller Foundation, and Bezos Earth Fund, GEAPP works to build the enabling environment, capacity, and market conditions for private sector solutions, catalyze new business models through innovation and entrepreneurship, and deploy high-risk capital to encourage private sector solutions, and assist just transition solutions.