IFC, Norfund back $83M Nigeria energy push to reach 500,000 users

Nearly 500,000 households and businesses in Nigeria are set to gain access to electricity under a new $83.2 million financing initiative led by the International Finance Corporation in partnership with Norfund. The program targets off-grid renewable energy expansion, aiming to bridge Nigeria’s electricity deficit while supporting small businesses and job creation across underserved communities.

The financing package, part of the broader World Bank Group strategy, includes $35.3 million in concessional debt from the International Development Association’s Private Sector Window and IFC’s Concessional Capital Window. Total project capital expenditure is estimated at $271 million.

Scaling decentralized energy infrastructure

The initiative will support five Renewable Energy Service Companies (RESCOs): Darway Coast Nigeria Limited, GVE Projects Limited, Prado Power Limited, PriVida Power Limited, and StarTimes Energy. These firms will deploy 315 solar hybrid mini-grid sites designed to connect approximately 2.9 million people to electricity.

The rollout focuses on decentralized energy infrastructure, a growing segment in Africa’s power sector, where grid expansion has lagged demand. The projects align with IFC’s “Mission 300” strategy, which aims to accelerate electricity access across the continent through private-sector-led investments.

Addressing Nigeria’s power deficit

Nigeria, Africa’s largest economy, faces a persistent energy gap, with more than 85 million people lacking access to electricity. Even for connected users, unreliable grid supply has driven widespread reliance on diesel generators, increasing costs and emissions.

By expanding distributed renewable energy systems, the IFC-backed platform aims to reduce dependence on fossil fuels while lowering energy costs for households and businesses. The model also supports productive-use applications, enabling small enterprises to scale operations in sectors such as agriculture, retail, and light manufacturing.

Why this matters

The initiative highlights the growing role of blended finance in scaling energy infrastructure across emerging markets. By combining concessional capital with private investment, institutions like IFC and Norfund are de-risking projects that would otherwise struggle to attract funding.

For Nigeria, improved electricity access is directly tied to economic growth. Reliable power enables higher productivity, supports SME expansion, and strengthens local value chains. The program also reinforces broader trends in Africa’s energy transition, where decentralized renewables are emerging as a faster, more scalable alternative to traditional grid expansion.

The investment mirrors similar IFC-backed energy access programs across Sub-Saharan Africa, positioning Nigeria as a key market for distributed power solutions.

Financing structure and execution

The platform uses a programmatic financing model, allowing developers to access capital through a revolving facility. This structure accelerates deployment by streamlining approvals and reducing transaction timelines.

Each RESCO will receive a mix of senior loans from IFC, parallel funding from Norfund, and concessional subordinated debt. For example, Darway Coast will deploy 63 mini-grids with $25 million in financing, GVE Projects will build 41 sites backed by $12 million, Prado Power and PriVida Power will scale hybrid systems across multiple states, while StarTimes Energy will deliver the largest rollout with 95 sites

The projects collectively aim to expand access while supporting Nigeria’s clean energy value chain, including local manufacturing and engineering services.

Stakeholders and policy alignment

The initiative aligns with Nigeria’s national energy strategy and complements the government-backed DARES (Distributed Access through Renewable Energy Scale-up) program.

According to Sanyade Okoli, Special Adviser to the President on Finance and the Economy, such partnerships are critical to delivering scalable and sustainable solutions to the country’s electricity challenges.

IFC’s Africa Vice President Ethiopis Tafara emphasized that combining targeted investment with strong partnerships is central to unlocking economic opportunities and accelerating inclusive growth.

With deployment set to scale across multiple regions, the platform is expected to catalyze further private investment into Nigeria’s renewable energy sector. It also positions decentralized energy as a core pillar of Africa’s long-term infrastructure strategy. As demand for reliable power continues to outpace grid expansion, initiatives like this are likely to play a central role in closing the continent’s energy access gap while advancing climate and development goals.