ABUJA (Reuters) – Italy’s development finance institution Cassa Depositi e Prestiti SpA (CDP) plans to lend 100 million euros ($100.65 million) to the Africa Finance Corporation (AFC) for renewable energy and climate projects, the Lagos-based financier said on Wednesday.
As the world transitions to clean energy, Nigeria and other African countries are seeking more affordable long-term financing to invest in off-grid and low-carbon projects.
Power demand in Nigeria vastly outstrips supply, meaning its 200 million inhabitants must either go without power or rely on expensive, fume-belching generators.
Nigeria has capacity to produce an estimated 7,000 megawatts (MW) of power, but due to weak infrastructure, gas supply problems and water shortages only a little more than half of that reaches the national grid.
The loan by CDP, which has assets totalling over 400 billion euros ($402.60 billion), will help Nigeria build infrastructure to combat climate change, as well as catalyse industrialisation, create jobs and reduce poverty, the AFC said.
Established in 2007 by West African states including Nigeria and Ghana to invest in African infrastructure projects, AFC has invested over $10 billion in over a decade in projects across 35 African countries.
The CDP investment adds to loans from Germany’s KfW, India’s Exim Bank, Netherland’s FMO and France’s Proparco, the AFC said, as it seeks to expand its pool of financiers.
The AFC said it had acquired Africa’s biggest renewables independent power producer, Lekela Power, last month and plans to double generation capacity within four years.
($1 = 0.9991 euros)
(Reporting by MacDonald Dzirutwe; Writing by Chijioke Ohuocha; Editing by Nellie Peyton and Josie Kao)