The UK Partnering for Accelerated Climate Transitions (UK PACT) programme is stepping up efforts to expand renewable energy investment in Nigeria, with its second phase focusing on project delivery, financing and the revival of dormant hydropower assets.

Launched in Nigeria in March 2026, the UK-funded technical assistance programme supports the country’s Energy Transition Plan (ETP) and climate goals, shifting from policy development to commercially viable projects that can be scaled.

Speaking with The Guardian, Senior UK PACT Officer at the British High Commission in Nigeria, Folakemi Aletan, said the programme was helping create a competitive, investment-ready renewable energy market by demonstrating how decentralised renewable energy (DRE) systems and other clean technologies could integrate into existing power networks.

She said UK PACT was also developing financial models to mobilise clean energy investment, particularly in underserved communities.

Phase 1 focused on policy frameworks and institutional capacity. Phase 2 prioritises implementation, investment readiness and practical outcomes.

One example is the programme’s support for the Rural Electrification Agency (REA). Working with the UKNIAF team, UK PACT helped operationalise stalled renewable energy assets under the Korea Energy Project by developing sustainable operations and maintenance models and frameworks for private operators.

The Rubochi and Ikwa mini-grids, with capacities of 900kW and 100kW respectively, are now fully operational.

“The Rubochi mini-grid alone serves approximately 4,000 households, making it one of the largest community-based solar mini-grids in the Federal Capital Territory. This is the kind of concrete, bankable outcome UK PACT aims to replicate across Nigeria,” she stated.

Financing renewable energy projects

To address funding barriers, UK PACT Phase 2 supported the design of the Green Finance and Investment Facility (GFIF), developed by Barton Heyman Limited with REA.

The facility combines results-based financing, senior concessional debt, co-lending and equity co-investment to help Nigeria’s distributed renewable energy projects secure funding.

Aletan said GFIF was helping develop investment-ready projects, strengthen project pipelines and improve access to public and private capital, including international climate funds and development finance institutions.

By combining concessional funding with private investment, the facility aims to improve project risk-return profiles and attract investors beyond UK PACT’s direct involvement.

The programme also aligns with Nigeria’s ETP, Climate Change Act and Nationally Determined Contributions (NDC) 3.0. Projects are assessed for climate impact and their contributions to Gender, Equality, and Social Inclusion (GEDSI).

Aletan said UK PACT works with the National Council on Climate Change, the office of the Minister of State for Health, the Federal Ministry of Environment, the Federal Ministry of Power, REA and the Nigerian Electricity Regulatory Commission (NERC).

The programme is also strengthening Nigeria’s capacity to negotiate climate finance and international partnerships. Its work includes developing an economy-wide Measurement, Reporting, and Verification (MRV) system to support a carbon budget and operationalise a carbon market framework.

Three hydropower projects advance

UK PACT’s Nigeria Small Hydropower Programme, led by AP3 Advisory Services, is preparing dormant public dams for investment through feasibility studies, dam safety audits, environmental and social assessments, and commercial structuring.

Speaking with The Guardian, programme director Dr Gori Olusina Daniel said three pilot sites—Ghari Dam in Kano, NESCO Cascade in Plateau and Ikere Gorge in Oyo—had reached investment-grade preparation during the programme’s first year.

The sites represent about 60MW of hydropower capacity, potentially increasing to 140MW with planned solar hybridisation.

Studies recommend a 1.6MW hydropower unit and 2MW solar installation at Ghari Dam, linked to an industrial anchor load. NESCO Cascade could support rehabilitation of up to 28MW alongside a 10MW solar hybrid, while Ikere Gorge targets a 100MW hydro-solar hybrid.

By consolidating five datasets into a national hydropower inventory, AP3 identified 79 preparation sites and 61 near-term build sites with approximately 62MW of capacity, scalable to more than 200MW.

The three pilot projects could prevent 170,000–280,000 tonnes of carbon dioxide emissions annually, largely by replacing diesel generation.

AP3 is also exploring financing structures combining grants, subsidies and credit enhancements to address high domestic lending rates.

“This work is anchored in Nigeria’s Energy Transition Plan and Electricity Act 2023, with AP3 assisting in drafting the country’s first National Small Hydropower Policy and toolkits for developers and financiers. The programme demonstrates how structured preparation and blended financing can unlock Nigeria’s estimated 3,500 MW of underutilised hydropower potential,” he stated.

Solar and battery projects target better power supply

Rocky Mountain Institute (RMI), another implementing partner, is advancing renewable energy through its Renewable Embedded Generation (REG) programme, which connects solar and battery storage projects directly to distribution networks.

RMI Executive Suleiman Babamanu said the organisation had worked with distribution companies across several states to standardise project selection, feasibility studies, financial modelling, procurement and power purchase agreements.

Recent studies identified four REG opportunities comprising 53MW of solar capacity, 55MWh of battery storage and £36 million in potential investment. IBEDC and PHED had shortlisted developers for commercial engagement.

The model is designed to improve electricity reliability for customers, strengthen utility services and provide private developers with viable renewable energy investment opportunities.

“Community engagement is central, with RMI integrating customer demand assessments, regulatory collaboration, and Gender Equality, Disability and Social Inclusion (GEDSI) considerations into project design. This ensures clean energy solutions are not only commercially viable but also inclusive and responsive to Nigerian communities,” he stated.

Strengthening Nigeria’s climate leadership

Beyond domestic projects, UK PACT aims to connect policy, financing and implementation to deliver lasting change in Nigeria’s energy sector.

Its approach combines investment-ready hydropower projects, distributed solar generation, blended finance and stronger institutional capacity to expand clean energy access and support green growth.

The programme’s long-term goal is to establish projects and systems capable of attracting continued investment and advancing Nigeria’s transition to a low-carbon economy.

Source: The Guardian