Abuja: The Rural Electrification Agency (REA) has signed a Memorandum of Understanding (MoU) with Lotus Bank to invest N100 billion and accelerate the supply of renewable energy to unserved and underserved rural communities.
The management of REA, in a statement in Abuja on Tuesday, said that the strategic move would eliminate financing barriers for renewable energy developers.
It said that under the terms of the Memorandum of Understanding (MoU), the bank is making a revolving credit facility (a type of loan that allows borrowers to withdraw, repay, and withdraw again up to an approved limit) available to project developers to enable them to procure essential equipment for renewable energy projects.
”This facility offers up to eight billion Naira per developer with a tenure of up to 18 months,
“The bank will also provide 90 per cent counterpart funding for projects approved under the result-based financing programme, subject to credit risk assessments,” it said.
According to the statement, the collaboration establishes a landmark facility-support strategy to bridge the energy access gap and deliver electricity to unserved and underserved communities.
The agreement formalises a partnership to provide project financing support to mini-grid developers—companies that build small electricity networks—participating in the Distributed Access to Renewable Energy (DARES) programme.
The programme is a World Bank-supported scale-up of the Nigeria Electrification Project (NEP). The NEP is implemented by the REA to increase private sector-led electricity access for households, public institutions, and commercial customers.
The statement further said that to ensure seamless execution, the REA would provide technical oversight by pre-qualifying developers (evaluating and approving them before work begins), authenticating grant agreements (verifying that grant contracts are legitimate), and utilising Independent Verification Agents (IVAs), who are third-party reviewers, to confirm project connections.
It said that Lotus Bank would complement these efforts by deploying a collection platform to help the projects’ financial sustainability. The bank will also offer international trade tools to improve delivery efficiency.
The collaboration strengthens energy financing in Nigeria, ensuring robust private sector support.
The project is expected to reduce developers’ financial risks, shorten delivery timelines, and accelerate the clean energy transition.
Speaking at the signing ceremony, the Managing Director of REA, Mr Abba Aliyu, emphasised the impact of the collaboration on the energy sector.
“This partnership with the bank is a significant milestone in our commitment to promoting universal access to affordable and sustainable electricity.
By securing the N100 billion credit facility, we are directly addressing the debt financing bottleneck. This bottleneck has historically hindered project developers.
”This ensures that reliable electricity can be delivered more efficiently to the rural communities that need it most, in line with our National Electrification Strategy,” he said.
The Managing Director of Lotus Bank, Mr Isiaka Ajani-Lawal, reflected on the bank’s role in driving sustainable development.
Ajani-Lawal said, “Lotus Bank is proud to partner with the REA to support the growth of renewable energy infrastructure in Nigeria.
The N100 billion commitment is designed to encourage financial inclusion in local communities. It also provides developers with the liquidity and advisory tools needed for project success.
”This initiative is not just about power; it is about improving lives and supporting the MSMEs that drive our economy,” he said.
