The Need To Turn N100bn Renewable Energy Financing Into Electricity For Nigerians

We must judge renewable energy investments by the electricity they deliver, the communities they reach and the businesses they sustain. The N100 billion project financing partnership between the Rural Electrification Agency (REA) and Stanbic IBTC Bank therefore represents an opportunity to address one of Nigeria’s persistent development challenges: inadequate access to reliable electricity.

Dr. Abba Aliyu, Chief Executive of REA, announced the partnership after signing a Memorandum of Understanding with Stanbic IBTC Bank. It builds on the bank’s N30 billion financing commitment in 2023 and will provide eligible renewable energy developers with additional capital for projects under REA programmes, including the World Bank-supported Distributed Access through Renewable Energy Scale-up (DARES) programme.

We must recognise the significance of this commitment while insisting that its value depends on implementation. A financing agreement is not electricity, and a memorandum is not a functioning mini-grid. Capital becomes development only when it produces reliable infrastructure that reaches communities and remains financially sustainable.

For many Nigerians, electricity remains expensive and unreliable. Communities outside dependable grid coverage struggle to power businesses, preserve agricultural produce and maintain essential services. Small enterprises absorb the costs of alternative power, while households face the consequences of inconsistent supply. We cannot seriously pursue productivity, industrialisation and poverty reduction without addressing this deficit.

The REA-Stanbic IBTC partnership seeks to bridge the gap between technically viable renewable energy projects and the financing required to deliver them. We need more arrangements that make credible projects bankable without placing the entire burden on public funds.

We must also examine the proposed equipment financing mechanism. According to Aliyu, eligible developers will access Chinese Yuan Renminbi financing through Stanbic IBTC’s partnership with the China Development Bank. The facility will support equipment procurement and direct payments to original equipment manufacturers in China.

We should welcome the potential to reduce intermediaries and improve procurement efficiency. Equipment costs and financing conditions can determine whether projects progress from design to installation or stall before completion. However, we must not assume that foreign-currency financing automatically reduces costs. Exchange-rate exposure, repayment obligations and transaction charges will determine its actual benefit. We need transparent terms that strengthen project economics rather than transfer financial risks to developers.

The division of responsibilities also matters. Stanbic IBTC Bank will provide financing, while REA will facilitate the relevant grant agreements. We must ensure that these complementary roles create a coordinated process. Delays, complicated eligibility requirements and poor communication could undermine the partnership’s intended benefits.

Our attention must remain on the communities this initiative is designed to serve. The central question is not how much money has been committed, but how many unserved and underserved communities will receive reliable electricity, at what cost and within what timeframe. We need transparent project selection, clear implementation schedules and measurable outcomes.

We must equally insist that developers demonstrate the capacity to operate and maintain functioning systems. Project completion is only the beginning. Equipment requires maintenance, customers need dependable service, and operators must generate sufficient revenue to sustain operations. Without sound commercial arrangements, communities risk receiving infrastructure that cannot deliver electricity consistently.

The DARES programme provides an existing pathway for eligible developers. We should use it to connect development objectives with commercially viable energy delivery. Public grants should help overcome access barriers, while private financing supports projects capable of sustaining operations. Neither should replace proper project appraisal, financial discipline and accountability.

We must also recognise the potential benefits for Nigerian businesses. Reliable electricity can reduce operating costs, improve service delivery and support productive activities in areas poorly served by the national grid. Yet these benefits will materialise only when financing translates into completed projects and dependable power. We should not count financial commitments as achievements before results become visible.

We acknowledge Stanbic IBTC Bank for building on its previous N30 billion commitment and REA for mobilising financing towards renewable energy access. However, we must distinguish institutional cooperation from measurable public benefit. We should assess this partnership through financing disbursement, project completion, electricity delivered, affordability and service reliability.