Green sukuk is at the heart of InfraCredit’s support for Prado Power Limited’s Green Infrastructure Forward Ijarah Lease Sukuk, a landmark initiative expanding renewable energy access in Nigeria. This Shari’ah-compliant instrument is designed to fund solar-powered mini-grids in underserved communities, fostering sustainable development while advancing the country’s electrification and net-zero emission goals.
A New Era for Green Sukuk in Nigeria
InfraCredit, a leading infrastructure credit guarantee institution, has marked a significant milestone by backing Prado Power Limited’s Green Infrastructure Forward Ijarah Lease Sukuk—a major step toward expanding renewable energy access in Nigeria. The financing, secured under a £10 million Climate Finance Blending Facility from the United Kingdom’s Foreign, Commonwealth, and Development Office (FCDO), highlights the innovative use of green sukuk to drive sustainable development.
Green sukuk, an Islamic finance instrument, is gaining traction as a powerful tool for funding eco-friendly projects. This Shari’ah-compliant financial model provides non-interest-based returns while supporting initiatives that reduce greenhouse gas emissions and promote clean energy. By leveraging this instrument, InfraCredit and its partners aim to unlock domestic institutional investments for clean energy projects—an approach that aligns with Nigeria’s electrification goals and its commitment to achieving net-zero emissions by 2060.
The transaction is Nigeria’s first blended local currency Green Infrastructure Forward Ijarah Lease Sukuk, which will fund solar-powered mini-grids and productive-use hubs in underserved communities across Benue and Akwa Ibom states. This initiative directly addresses critical energy access challenges while driving socio-economic progress in rural areas.
The project benefits from InfraCredit’s “AAA”-rated guarantee, which enhances the sukuk’s credit profile, reduces transaction risks, and attracts institutional investors to the clean energy sector. The Climate Finance Blending Facility also provided subordinated first-loss capital, further reducing the project’s cost of capital.
Transformative Impact of the Project
This seven-year guaranteed sukuk will finance the construction, installation, and commissioning of four solar-hybrid mini-grids with a combined capacity of 850 kWp. In total, these grids will electrify 15,801 unserved households and small businesses, create 242 jobs, and reduce greenhouse gas emissions by an estimated 893.53 tonnes annually.
By supporting rural electrification, the project contributes directly to the United Nations Sustainable Development Goals (SDGs), including SDG 7 (affordable and clean energy), SDG 8 (decent work and economic growth), and SDG 13 (climate action).
Prado Power’s CEO, Mr. Washima Mede, expressed enthusiasm for the project, emphasizing the importance of integrating energy infrastructure investments with community development. “This initiative is not just about energy access. It is also about creating jobs and improving livelihoods,” he said. The project will also support smallholder farmers and rural dwellers by enabling access to productive-use equipment like threshers and de-huskers, which enhances agricultural productivity.
UK and REA Support for Green Sukuk Development
The British Deputy High Commissioner in Lagos, Mr. Jonny Baxter, highlighted the initiative’s significance. “This project underscores the critical role of distributed renewable energy in providing reliable energy access to underserved regions. It boosts economic activities and ensures a safer environment,” he said. The UK-funded Climate Finance Blending Facility has played a pivotal role in mobilizing green-certified local currency debt for off-grid solar projects in Nigeria.
The Rural Electrification Agency (REA) also supported the transaction. REA’s Managing Director, Mr. Abba Aliyu, noted that the financing aligns with the agency’s vision of using innovative financial models to de-risk renewable energy projects. “This transaction represents a significant milestone in closing Nigeria’s energy access gap,” he said.
InfraCredit’s CEO, Mr. Chinua Azubike, stated that the transaction demonstrates the potential of green sukuk to address energy transition challenges. “We are proud to support innovative climate-related Islamic finance products that tackle these challenges while creating jobs and expanding energy access,” he said. To ensure its compliance with global standards, the sukuk is certified green by the Climate Bonds Initiative and verified by Agusto & Co.
This landmark green sukuk initiative represents a bold step toward achieving Nigeria’s universal electrification goals by 2030 and aligning with its climate action commitments. By leveraging innovative financing tools like these, InfraCredit and its partners are not only advancing renewable energy access but also driving lasting socio-economic transformation.
