ETAFA US$50M subordinated debt vehicle for distributed renewable energy projects in Nigeria

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  • 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.

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.

Author: Bryan Groenendaal


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