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UK injects N5.6bn into Nigeria’s pension, insurance sectors

The United Kingdom (UK) is providing up to £10 million (N5.66 billion) of concessional aid to reduce the risk for pension and insurance funds to…

The United Kingdom (UK) is providing up to £10 million (N5.66 billion) of concessional aid to reduce the risk for pension and insurance funds to invest in energy access projects and support Nigeria’s 26th UN Climate Change Conference (COP26) commitments.

The £10m will be blended to de-risk transactions and therefore mobilise domestic institutional investment from local pension funds, insurance firms and other local institutional investors, a statement by the UK High Commission in Abuja revealed on Monday.

The financing will help Nigerian investors focus on low carbon energy, supporting off-grid and low-carbon energy projects.

This will help scale up domestic financing for eligible off-grid clean energy infrastructures, such as solar mini-grid and home systems, clean cooking infrastructure and SME cold storage infrastructure in Nigeria, the statement added.

The UK Minister for Africa, Vicky Ford, said, “The UK is committed to increasing both renewable energy and energy access in Nigeria, driving clean, sustainable and resilient growth.  As the world looks to transition to clean growth, we are witnessing an era-defining opportunity for the private sector. This transaction is particularly exciting as it brings together UK government support with the institutional capital which is essential to grow the sector at scale.”

This innovative blended finance initiative will provide affordable long-term financing from local investors for the low carbon energy sector to support scaling up of off-grid low carbon energy projects in unserved and underserved communities, the statement said. 

This initiative will support the implementation of Nigeria’s nationally determined contributions plan, which Nigeria submitted to the UNFCCC before COP26, its energy transition plan, which was presented by the Nigerian government at COP26, and Nigeria’s plans to increase energy access including the Solar Naija programme.

Uche Orji, MD/CEO of the Nigerian Sovereign Investment Authority (NSIA) and Chairman of InfraCredit, said: “InfraCredit is pleased to be working with FCDO to mobilise private investment from domestic pension funds and other institutional investors into such an important developmental area as low carbon energy access. This programme is aligned with NSIA’s other clean energy initiatives which aims to deliver up to 250-500MW of renewable energy capacity in Nigeria that will reduce annual CO2 emissions, alleviate poverty, create jobs and support local economic growth.”