United Capital Infrastructure Fund (UCIF) has signed a N5 billion ($3.2 million) revolving, native forex debt facility with Husk Energy Methods. It has been described because the largest-ever naira-denominated debt deal in Africa’s group photo voltaic mini-grid trade.
Though Sunking, a number one photo voltaic dwelling methods supplier, secured $80 million in naira-denominated loans earlier this 12 months to broaden family photo voltaic distribution. The Husk deal is the primary structured as a revolving facility devoted to group photo voltaic minigrids.
The transaction, introduced on the sidelines of the Africa Local weather Summit (ACS2) in Addis Ababa, is the primary native debt deal within the sector to introduce a revolving mechanism. Underneath the construction, Husk will have the ability to draw down on the capital no less than twice in the course of the 10-year tenor, bringing the potential whole to N10 billion ($6.4 million).
Preliminary deployments will fund Husk’s standalone minigrid pipeline in Nigeria. Then it should broaden to interconnected minigrids (IMGs) and industrial and industrial (C&I) photo voltaic initiatives.
Entry to reasonably priced, long-term native forex financing has lengthy been recognized as a serious bottleneck to accelerating the minigrid trade in Nigeria. Nonetheless, the Nigerian authorities have highlighted group photo voltaic minigrids as a vital pathway to broaden vitality entry and drive inclusive progress.
Analysts at McKinsey, in an upcoming report, additionally recognized group mini-grids as one in all Nigeria’s least costly pathways to electrifying the unelectrified inhabitants.
United Capital’s first funding in renewable vitality
“This transaction underscores our dedication to advancing Nigeria’s renewable vitality sector and increasing entry to wash, dependable energy,” mentioned Uchenna Mkparu, Chief Funding Officer and Fund Supervisor of UCIF.
He added, “By offering reasonably priced, long-term native forex debt to a market chief like Husk, UCIF is creating impression by enabling scalable, sustainable vitality entry for households, SMEs, smallholder farmers, and underserved communities throughout Nigeria. It’s our objective to copy this facility construction to ship as much as 100MW of fresh energy by 2030.”
Manoj Sinha, Husk’s CEO and Co-Founder, described the deal as a turning level for the trade.
“Entry to reasonably priced, long-term, Naira-denominated capital has lengthy been a vital bottleneck to scaling private-sector minigrids in Nigeria,” he mentioned.
“This facility marks a brand new period for the trade and offers robust momentum for Husk’s Africa Sunshot initiative, underneath which we intention to construct, personal, and function 1,000 minigrids in Nigeria.”
For UCIF, the deal represents its maiden funding within the renewable vitality sector. Uchenna additionally notes that it aligns with UCIF’s mandate to channel long-term native forex financing into sustainable improvement initiatives throughout Nigeria and Sub-Saharan Africa.
