d.light, the global provider of transformational household products and affordable finance for low-income households, and Chapel Hill Denham, the largest alternatives asset manager in Nigeria, today announced the closing of a landmark N10 billion securitised financing facility.

The new financing will be provided by Chapel Hill Denham’s Nigeria Infrastructure Debt Fund and will be used to scale up d.light’s low-cost Pay-Go offering of affordable, solar-powered products targeted at low-income households.

The structure of the financing was set up and is sponsored by African Frontier Capital, who also acts as the master servicer and backup servicer in the transaction.

Speaking on the transaction, Nick Imudia, Chief Executive Officer of d.light, said, “This landmark financing opens up access to our range of solar-powered household goods to more low-income families and households in Nigeria, in a way that is affordable for them and sustainable for our business. d.light has a track record of success in using securitised finance in other Sub-Saharan African countries as a flexible, scalable financing model for raising equity for off-grid solar that is guaranteed against current and future customer sales. We are now applying this experience in Nigeria as we scale up our operations there. In Chapel Hill Denham, we have a partner that is not only commercially astute but also equally dedicated to sustainable development.”

Bolaji Balogun, Chief Executive Officer of Chapel Hill Denham, also commented on the transaction, saying that, “This transaction signifies a pivotal stride in sustainable infrastructure investment in Nigeria, setting a transformative precedent for the renewable energy sector. By pioneering local currency securitisation for the financing of solar home systems and essential solar-powered household utilities in Nigeria, Chapel Hill Denham is catalysing innovation in the renewable energy sector, advancing sustainable development, empowering communities, and reshaping Nigeria’s infrastructure landscape for a brighter, more sustainable future for all.”

 “This is another significant milestone for Chapel Hill Denham and NIDF, with the first-ever at scale, local currency securitisation financing for Solar Home Systems and other solar-powered household goods in Nigeria,” added Anshul Rai, Partner, Infrastructure & Climate at Chapel Hill Denham. “We continue to broaden the range of financing solutions available to infrastructure providers in Nigeria, with particular emphasis on solving the greatest sustainable development challenges facing Nigeria.”

Last year’s Energy Progress Report, compiled by the International Renewable Energy Agency, the International Energy Agency, the UN and the World Bank, identified Nigeria as the country with the largest number of people (circa. 86 million) without access to electricity. Even those connected to the grid rarely receive a reliable supply.

In addition, nearly 80 percent of Nigeria’s electricity is currently provided by GHG-emitting thermal generation sources, necessitating a rapid transition to clean and reliable energy sources. d.light and Chapel Hill Denham are committed to supporting this energy transition through innovative products and financing solutions.

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The Project, which has reached an advance stage, is being carried out in two (2) distinct phases, with the initial phase focusing on the construction of a 10,000 metric ton spherical tank (consisting of 2 tanks, each with a capacity of 5,000 metric tons), a dedicated jetty and other associated infrastructure, which is to be followed by the development of an additional 5,000 metric tons of storage at a later date.

According to the Managing Director of the Company, Prof. Joe Ezigbo, “At Falcon, we consider our investments in the Gas industry as a national service first. This is why over the past almost thirty years, we have continued to expand our footprints within the industry, despite the various challenges within the environment. Gas development is our contribution to nation building and we remain unrelenting in this regard. We positioned our LPG facility strategically in proximity to major Gas sources and navigable water routes. The Project is set to facilitate and enhance more direct procurement and distribution of LPG, which will dramatically lower conventional delivery and storage costs. Beyond economic gains, we anticipate significant social benefits including job creation, income growth, health improvements, and environmental sustainability as our customers and communities transition to cleaner fuel options on a larger scale.”

The Deputy Managing Director and Co-Founder of Falcon, Mrs. Audrey Joe-Ezigbo, emphasized that “As a progressive company, deeply committed to the growth and advancement of Nigeria’s domestic Gas industry, we are expanding our investments across the Gas industry value chain, from our traditional role in the downstream sector, to our current midstream investments, and positioning for an intended upstream play. We are fully aligned with the nations aspirations to leverage gas for industrialization, and our primary energy transition fuel, with the strong focus on its use for power and cooking. LPG’s characteristics, such as portability, high energy value, low emissions, and reduced carbon footprint, make it an ideal choice for cooking and other industrial uses. The Project aims to ensure the availability of LPG and deepen its market penetration and adoption within the catchment areas, contributing to the mitigation of ecosystem damage and greenhouse emissions caused by use of other traditional fuels.”

As stated by Mr. Bolaji Balogun, the Chief Executive Officer of Chapel Hill Denham, “Chapel Hill Denham is pleased to support the integrated LPG infrastructure in Rivers State as this will not only increase domestic LPG consumption but also help in achieving one of the critical sustainable development goals aimed at reducing carbon emissions, air pollution, and habitat loss resulting from the use of firewood for cooking by more than 30 million households. The Project is also in line with the Federal Government of Nigeria’s objective of increasing the adoption of LPG as auto fuel and a replacement of diesel for power generation.”

Funded by debt obtained from NIDF and the Bank of Industry (BOI), coupled with internally generated funds, the Project has now hit a number of critical milestones, with a recorded completion rate of 65% as at October 2023. The progress achieved encompasses various phases of development, including completion of the jetty and substantial advancements in shoreline protection, as well as various engineering, procurement and construction (EPC) activities and installations. The Project is expected to be completed and commissioned by Q4 2024.

Nelson Walter, Falcon’s General Manager, Finance, in addressing the choice of debt provider, stated, “NIDF is renowned for providing debt financing with reasonable terms for impactful infrastructure projects. They have shown a depth of understanding of the imperatives for project success and offered a flexible long-term loan repayment structure for Falcon in alignment with this. We are extremely delighted to have partnered with NIDF on this groundbreaking Project. “

Vetiva Capital Management Limited and Chapel Hill Denham Advisory acted as the Financial Adviser on the transaction, while Detail Commercial Solicitors provided legal counsel.

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