Nigeria's energy sector is expanding, and energy demand is expected to rise as the country's population grows from 206 million in 2020 to over 250 million in 2030. These figures are promising and attract investors to the sector. More Small and Medium enterprises (SMEs) are needed to boost energy production and meet the growing demand.
One of the major challenges for startups is raising capital. These business owners have brilliant ideas but lack enough resources to execute them.
Investors that fund energy businesses in Nigeria.
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African Development Bank Group (AfDB) Sustainable Energy Fund for Africa (SEFA) - The AfDB is a continental financial institution that aims to reduce the poverty rate and improve the standard of living of Africans living on the continent. SEFA is a special fund programme established in 2011 and managed by the AfDB. It provides capital to energy investors in the private sector. The funds are used to support green energy investors to achieve SDG goal 7 (Affordable and clean energy). The business must be duly registered with the Corporate Affairs Commission (CAC), and the business owner is expected to provide at least 30% of the investment cost. You can apply for this grant here https://www.afdb.org/sites/default/files/2022/11/22/sefa-questionnaire_2022_002.docx .
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Africa Financial Services Investment Conference (AFSIC) The AFSIC “invest in solar energy” project seeks to raise funds for solar energy companies in Africa and also to promote your solar energy products/services for free. Funds are given to startups and well-established businesses. There are two separate application portals for startups and long-term businesses. You can apply here https://www.afsic.net/invest-africa/
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Bank of Industry (BOI) 6 billion Solar energy fund - The BOI first launched the solar energy fund in 2017, with a total budget of 1 billion naira. There was an upward review of the budget later in 2022, to 6 billion naira. These loans can be accessed by solar energy companies directly, the business must be operational and demonstrate profitability. Each business can access a maximum of 350 million naira from the fund. This is a low-interest loan of about 9% per annum. Apply here https ://www.boi.ng/solar-energy/
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Nigeria Electrification Project Performance-Based Grant - The Rural Electrification Agency (REA) has set up a business grant of up to $600 for energy companies that want to invest in power grids for rural areas. The application process consists of two stages, the initial stage which is the qualification stage and the second stage which is called the “site-specific technical application” and it involves stating the specific details of the project to the REA.
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Sustainable Use of Natural Resources and Energy Finance (SUNREF) project - This project is hosted by the Manufacturers Association of Nigeria (MAN) in partnership with two commercial banks which are Access and United Bank for Africa (UBA) banks. It is a low-interest credit facility for investors of renewable energy. Free technical assistance is provided during the execution of the business. The total fund available is $70 million.
Most investors demand a certain level of commitment from business owners, it is important to understand those requirements and meet up with them. Financial prudence is also important, to executing each business project, maintaining cash flow and earning profits.
When it comes to fundraising for businesses, there are a variety of options. Look up these 6 ways to raise funds for your business.
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