(Ecofin Agency) - The International Finance Corporation (IFC) has announced that it is considering providing $20 million to Nigerian off-grid power service provider, Daybreak Power Solutions, a subsidiary of Daystar Power Group. The investment is still undergoing regulatory approval by the IFC, according to a statement from the organization. When approved, the funds will be used as part of a $40 million Phase 1 capacity expansion project.

The $20 million investment will be made up of a $10 million loan given in local currency from IFC’s account as well as another $10 million subordinated loan from the Canada-IFC Renewable Energy Program for Africa.

This investment reflects IFC’s launch of the Climate Change Investment Program for Africa (CIPA); a sustainable energy financing and advisory program in sub-Saharan Africa, where demand for power and water is increasing along with risks associated with climate change.

Daystar Power earlier this year raised $38 million in a Series B funding from stakeholders including Danish DFI’s Investment Fund for Developing Countries (IFU), STOA - a French impact infrastructure fund, Proparco, the French DFI, and Morgan Stanley Investment Management. This was to grow its operations in its key markets of Nigeria and Ghana, while expanding to other regional countries including Côte d’Ivoire, Senegal, and Togo.

According to a report by researchgate, renewable energy in a long run will influence economic growth, providing energy security, green jobs that will contribute to sustainable growth and development in Nigeria. Also, the Nigerian government was looking at that direction when it initiated the Renewable Energy Master Plan (REMP).