Olaniwun Ajayi LP (OALP) acted as counsel to Husk Power Energy Systems Nigeria Limited (Husk Power) on a landmark ₦5 billion revolving credit facility. The facility is worth about US$3.2 million. United Capital Infrastructure Fund (UCIF) provided it. Husk Power is the world’s largest private-sector mini-grid operator, and this is the largest Naira-denominated debt transaction to date in Nigeria’s solar mini-grid sector.
How the Husk Power facility is structured
The facility runs for 10 years on a revolving basis. It will fund Husk Power’s pipeline of solar mini-grids across Nigeria. That pipeline covers standalone sites, interconnected mini-grids and commercial and industrial solar projects. As a result, more communities gain access to clean, reliable and affordable electricity.
The revolving structure is the key feature. Husk Power can draw, repay and redraw the same funds. Over the tenor, it expects to redeploy the capital at least twice. Consequently, the ₦5 billion commitment can mobilise up to ₦10 billion in financing.
Why the transaction matters
Access to long-term local-currency debt is one of the hardest problems in Nigerian mini-grid development. Most project revenue is earned in Naira, so foreign-currency loans leave developers exposed to exchange-rate risk. This facility removes that mismatch. Therefore it offers a template that other developers and lenders can follow.
The deal also builds on OALP’s earlier work for Husk Power. The Firm advised on the US$5 million International Finance Corporation facility that supported the company’s expansion and the development of more than 100 mini-grids in Northern Nigeria. Moreover, our work on the British International Investment facility for mini-grid equipment procurement and on the NGN4 trillion power sector issuance programme reflects the same push to fund Nigerian power with structured, often local, capital.
OALP is proud to have advised Husk Power on this groundbreaking transaction. To discuss local-currency financing for mini-grids or renewable energy projects in Nigeria, please contact our energy and infrastructure team.