April 18, 2024

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USTDA Study Helps Catalyze Finance for Solar-Powered Rural Telephony in Nigeria

A U.S. Trade and Development Agency-funded feasibility study for Nigeria’s Hotspot Network Limited has led to the issuance of financing for the deployment of 120 solar-powered rural telecommunications base stations across 22 States in Nigeria. The project will utilize renewable energy to provide last-mile mobile connectivity to underserved rural communities that lack the requisite power infrastructure for reliable telecommunications.

Co-financing the project’s 7-year fixed-rate local currency debt issue are Nigeria’s Infrastructure Credit Guarantee Company (InfraCredit) and the Climate Finance Blending Facility, funded by the United Kingdom Foreign, Commonwealth and Development Office (FCDO). This co-financing attracted matching investments from nine Nigerian institutional investors.

“Today we are one step closer to bridging Nigeria’s digital divide. Hotspot’s vision for solar-powered rural telephony is well suited to the needs of Nigeria’s rural communities, and the partnership between InfraCredit and FCDO created an innovative financing approach that further de-risked the project, lowered borrowing rates, and will increase the affordability of mobile services for its end users,” said Enoh T. Ebong, USTDA’s Director. “USTDA is proud to have provided grant funding for the project’s feasibility study. It is another demonstration of how our Agency helps to catalyze investment for priority infrastructure projects in emerging economies.”

USTDA’s feasibility study assessed Nigeria’s rural telephony market, defined the project’s technology, cost and revenue options, and recommended financing and implementation plans.

USTDA’s support for this activity results from a June 2021 Memorandum of Understanding (MOU) with InfraCredit to jointly identify infrastructure projects in Nigeria that could benefit from project preparation funding and subsequent credit enhancements. This collaboration facilitates the development of bankable infrastructure projects highlighting U.S.-based solutions and brings them to market for InfraCredit’s investment-catalyzing guarantees. The sectors of cooperation highlighted in the MOU include clean energy and digital infrastructure.

More information on the financing of Hotspot’s project can be found in this InfraCredit press release.

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