The Nigerian Sovereign Investment Authority (NSIA) is boosting the country’s electrification through renewable energy with the establishment of a US$500 million Renewables Investment Platform for Limitless Energy (RIPLE).
The fund has signed up the International Finance Corporation (IFC) as a strategic partner for a pilot investment in the core areas of the platform: diesel displacement, franchising and backward integration towards photovoltaic system (PV) manufacturing. The pilot will be located in the Tokarawa Industrial Hub in Kano State, according to Business Day, and will have 70MW of generation capacity. The deal followed the completion earlier this year of a 10MW solar farm in Kumbotso, Kano State. The NSIA has allocated an initial US$25 million funding and hopes to catalyze additional investments to make up the US$500 million to fulfil the platform’s mandate.
NSIA claims it has so far invested about US$100 million in projects geared towards climate and sustainability. NSIA and the National Council on Climate Change (NCCC), Nigeria’s implementing entity for climate action, signed an MoU in May to address climate risks. The partners agreed to: develop a climate change framework to provide guidelines for regulating emissions in Nigeria; implement a carbon emissions trading mechanism; and oversee the implementation of a national carbon registry as well as a Climate Change Fund.
Last month, NSIA and InfraCredit co-developed an innovative Construction Finance Warehouse Facility (CFWF), seeded with NGN10 billion ((US$12 million), to help finance sustainable greenfield infrastructure projects in Nigeria. It aims to provide early-stage debt financing for projects until they can secure long-term financing from the debt capital markets. The sovereign wealth fund aims to reach up to NGN100 billion (US$120 million) capacity within the next three years and unlock up to NGN500 billion (US$600 million) in infrastructure projects, backed by credit enhancements from InfraCredit, set up by NSIA to mobilize local, long-term financing into infrastructure development
NSIA and Vitol launched Carbon Vista seeded with $50 million and recently signed an MoU with the Regional Voluntary Carbon Market Company (RVCMC), a wholly owned subsidiary of Saudi Arabia’s Public Investment Fund (PIF). The deal involves the supply of Nigerian carbon credits to Saudi Arabia and co-investment in projects that will originate carbon credits with the purpose of promoting low-carbon economic growth through a range of carbon avoidance and removal projects, such as climate-smart agriculture, green industrial technologies, and waste management. The JV’s initial investment aims to reduce emissions in infrastructure, agriculture, and energy sectors, combining carbon offsetting with social outcomes in line with SDGs.
The US$2.3 billion NSIA has three sub-funds that are strictly segregated. With infrastructure representing 40% of AUM, the fund is targeting up to US$1 billion in the sector over a three-year program of investment in solar energy and healthcare. This requires new sources of cash, probably in the form of excess oil revenues as well as external financing through partnerships with the private sector.