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Sterling Bank has signed a $30 million senior credit facility with Proparco, the private sector arm of the French development agency AFD Group.
The financing will support renewable energy projects and small and medium-sized enterprises (SMEs) in Nigeria’s agricultural value chain. It is the first deal between the two institutions, and both describe it as the start of a longer-term partnership.
Abubakar Suleiman, Managing Director and CEO of Sterling Bank, and Christophe Lecourtier, CEO of AFD, signed the loan agreement at the bank’s head office in Lagos.
“We have long treated Nigeria’s power problem as a generation problem waiting for the grid to solve it. Increasingly, it is a financing problem with a distributed solution. Millions of households and businesses already pay for power through generators. What they lack is the capital to switch to something cleaner and, over time, cheaper. That is the gap this facility helps us close,” said Abubakar Suleiman, Managing Director and CEO, Sterling Bank.
Sterling Bank is a Nigerian commercial bank that focuses its lending on five sectors under its HEART strategy: health, education, agriculture, renewable energy and transport. It has set a target of carbon neutrality by 2050 and has installed solar power at its headquarters and at nearly half of its branches and ATMs.
It also runs Imperium, a platform that helps customers access renewable energy equipment and services, and Qoray Mobility, an electric mobility initiative that creates jobs, including for women. Its OneWoman programme supports women entrepreneurs with skills and business growth.
“Through this first partnership with Sterling Bank, the AFD Group, through its subsidiary Proparco, is helping to align our partners’ development needs with the strategic interests shared by Africa, France and Europe. This financing will increase access to clean and reliable energy, support SMEs and local agricultural value chains, and foster job-creating growth. This partnership will also promote joint projects between Nigerian and French companies,” said Christophe Lecourtier, CEO, AFD.
Proparco has recently invested in various African companies. They committed $171,000 to Kenya’s Farm to Feed to help reduce food loss and increase farmer incomes. They also invested $15 million in South Africa’s Capitalworks for its fourth private equity fund, $2 million in Cauridor for cross-border payments in West and Central Africa, and supported Anda in Angola to enhance affordable transportation and electric vehicle options.
Sterling Bank will use 80% of the facility to finance renewable energy projects and the remaining 20% to lend to agricultural SMEs. The energy funding will focus on off-grid solar power for households and businesses.
More than one-third of Nigeria’s population still lacks access to electricity. The financing is also part of AFD Group’s support for Mission 300, an initiative to connect an additional 300 million people in Africa to electricity by 2030.
The announcement comes a few days after launching a $200 million SME Credit Backstop Fund to help small and medium-sized businesses in Nigeria get loans with Cascador.
