Question to the Foreign, Commonwealth & Development Office:

To ask the Secretary of State for Foreign, Commonwealth and Development Affairs, with reference to UK boosts access to finance for women-owned businesses and clean energy projects in Nigeria, published on 21 February 2022, in what way the £10 million finance through Infracredit to unlock institutional investment into off-grid clean energy projects in Nigeria will be structured; what return is expected on that funding; and what assessment her Department has made of the potential risks and merits of providing that finance.

The £10 million concessional UKAid will be used to leverage pension fund and insurance money into a series of energy access developmental projects e.g. minigrids, cold hubs and clean cooking which align with Nigeria's and the UK's climate commitments at COP26. Decarbonisation and energy access can only be achieved by leveraging this institutional capital. There is a target ratio of at least 50 percent institutional or commercial capital in each investment. The UK's funding is debt and returnable by the investee companies to the trust fund, with a lower interest rate and the UK money potentially being first loss. This concessional finance makes it viable for the institutional funders to join. It will be used only in those projects which InfraCredit's investment committee determine are acceptable from a risk and cost perspective and which meet the dedicated UK adviser's assessment of developmental impact. External consultants will assess the performance of the UK initiative twice a year, with funded projects reporting on energy access, megawatt installed and private finance mobilised in line with the International Climate Finance methodologies. A Business Case addendum covering this has been approved by HMG Nigeria's Delivery board and is published on DevTracker. An economic cost benefit analysis has been done for the £10 million spend and a detailed investment agreement is in place with InfraCredit.