In a strategic initiative aimed at overcoming financing barriers faced by renewable energy developers, the Rural Electrification Agency (REA) has signed a Memorandum of Understanding (MoU) with Lotus Bank.
This collaboration establishes a landmark support strategy to bridge the energy access gap and deliver electricity to unserved and underserved rural communities across Nigeria.
The MoU, signed on February 23, 2026, formalizes a partnership that provides tailored project financing support to mini-grid developers participating in the Distributed Access to Renewable Energy (DARES) program.
DARES, backed by the World Bank, represents an expansion of the Nigeria Electrification Project (NEP) implemented by the REA, aimed at increasing private sector-led electricity access for households, public institutions, and commercial customers.
As part of the agreement, Lotus Bank has committed to a revolving credit facility of One Hundred Billion Naira (N100,000,000,000) specifically for project developers to procure essential equipment for renewable energy projects. Each developer can access up to N8 Billion with a repayment tenure of up to 18 months.
Additionally, the bank will provide up to 90% counterpart funding for projects approved under result-based financing programs, contingent on credit risk assessments.
During the signing ceremony, REA Managing Director/CEO, Abba Abubakar Aliyu, stressed the importance of this collaboration for the energy sector. He remarked,
“This partnership with Lotus Bank is a significant milestone in our commitment to promoting universal access to affordable and sustainable electricity. By securing this N100 Billion credit facility, we are directly tackling the debt financing bottleneck that has historically hindered project developers, ensuring reliable electricity can be delivered more efficiently to the rural communities that need it most, in line with our National Electrification Strategy.”
Similarly, Lotus Bank’s Managing Director, Isiaka Ajani-Lawal, highlighted the bank’s role in supporting sustainable development.
“At Lotus Bank, we are proud to partner with the REA to bolster the growth of renewable energy infrastructure in Nigeria. Our commitment of N100 Billion is designed to foster financial inclusion in local communities while equipping developers with the liquidity and advisory tools necessary for project success. This initiative is not just about power; it is about improving lives and supporting the MSMEs that drive our economy,” he stated.
To ensure effective execution of the initiative, the REA will provide technical oversight by prequalifying developers, authenticating grant agreements, and utilizing Independent Verification Agents (IVAs) to confirm project connections.
Meanwhile, Lotus Bank will enhance the financial sustainability of the projects by deploying a collection platform and offering international trade tools to improve delivery efficiency.
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