Luxembourg-based Universal Green Energy Access Programme (UGEAP), and Union Bank of Nigeria have formalised a strategic partnership through which $500 million is mobilised to develop the renewable energy market in Nigeria.
The two, bound by a Memorandum of Understanding (MoU), will mobilise and deploy $500 million in funding and technical assistance over the next five (5) years through an initiative that aims to advance the renewable energy sector, benefit businesses and communities in Nigeria, and contribute to the broader sustainability goals in Sub-Saharan Africa and primarily, focusing on Nigeria.
UGEAP, a 15-year blended finance facility, is dedicated to supporting the transition to sustainable energy. The United Nations Green Climate Fund (GCF) has committed the anchor investment to UGEAP, with DWS Investment S.A. as the Investment Manager.
Union Bank of Nigeria is a venerable financial institution established in 1917 and brings vast experience and a comprehensive portfolio of banking services to this partnership. With over 293 service centres and more than 937 ATMs spread across Nigeria, it is a trusted partner in the financial sector.
Recognising the critical need for energy in Nigeria and the shared ambition to increase the proportion of renewable energy in the energy mix, the Parties have identified key areas of focus, which include meeting the energy demands in Nigeria, reducing industry and corporate dependence on expensive electrical energy to align with climate targets for CO2 emissions reduction, promoting solar home solutions, mini-grids for first-time electrified communities, and both off-grid and on-grid renewable energy production for corporates and productive use of energy.
Speaking about the partnership, Mudassir Amray, Managing Director and Chief Executive Officer of Union Bank, said Union Bank of Nigeria is proud to align with UGEAP in this groundbreaking initiative.
“Our longstanding commitment to fostering growth in Nigeria and UGEAP’s expertise in renewable energy positions us to drive meaningful change. This collaboration marks a milestone in pursuing renewable energy development in Nigeria, promising a more sustainable and resilient future for our communities.”
Also commenting on the partnership, Michael Hoelter, Senior Investment Principal of the Sustainable Investments team at DWS, expressed that Renewable energy technology is a highly flexible solution for local solutions to the global target to decarbonise industry and the financial system.
“Be it pay-as-you-go or roof-top installations for corporations, customers do not have to wait for the national grid to be reinforced to obtain electrical energy reliably. Solar power beats the noise of generators and can also beat the cost. UGEAP aims to multiply its capital contribution with the strength of local partners with strategic alignment to bring clean energy to households and industrial users. We are glad to welcome Union Bank to the already existing partners in this joint development path”.
Established in 1917 and listed on the Nigerian Stock Exchange in 1971, Union Bank of Nigeria Plc is a household name and one of Nigeria’s longest-standing and most respected financial institutions. The Bank is a trusted and recognisable brand with an extensive network of over 300 branches across Nigeria.
The Bank currently offers a variety of banking services to both individual and corporate clients, including current, savings and deposit account services, funds transfer, foreign currency domiciliation, loans, overdrafts, equipment leasing and trade finance. The Bank also offers customers convenient electronic banking channels and products, including Online Banking, Mobile Banking, Debit Cards, ATMs, and POS Systems.
UGEAP, a 15-year blended finance facility that contributes to the transition to sustainable energy by supporting clean energy access for households and small and medium businesses in Sub-Saharan Africa, target Benin, Ethiopia, Kenya, Namibia, Nigeria, Tanzania, and Uganda, together with any other Sub-Saharan African countries which may be determined by DWS and approved by the GCF.
UGEAP has two components, i.e., the Fund and the Technical Assistance Facility. The Fund aims to support the debt financing needs of the renewable energy sector in Sub-Saharan Africa, primarily servicing off- and on-grid populations and businesses. The Fund provides funding through and along financial intermediaries to benefit commercial businesses that develop, build, and operate renewable energy installations, provide clean energy access to households and businesses, or provide ancillary services in the energy supply chain and serve markets in Sub-Saharan Africa. In parallel to the Fund, technical assistance resources are made available through a Technical Assistance Facility to further the objectives of UGEAP as described above. They will achieve this by developing the pipeline of viable transactions, strengthening the infrastructure for financing energy access companies, and expanding the capacity of companies in the UGEAP portfolio, among other enabling activities.
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