Nigeria's energy transition will not be constrained by ambition alone. The harder question is how to mobilise the capital required to turn that ambition into bankable projects at scale. In a market where substantial infrastructure needs meet currency risk, high financing costs and persistent implementation challenges, conventional sources of capital are unlikely to be sufficient. The opportunity therefore lies not simply in attracting more private capital, but in structuring public and private capital to work differently together.

In this article, the case for blended finance as a mechanism for doing precisely that is examined. By combining concessional capital, guarantees, risk-sharing instruments and local-currency financing, blended structures can address some of the risks that currently keep domestic and international investors at the margins of Nigeria’s clean energy market. But the real promise of blended finance goes beyond closing individual funding gaps. Properly designed, it can help create the conditions for a deeper domestic market, one in which institutional investors participate, developers build credible track records, and projects progressively graduate from concessional support to commercial financing.

Drawing on emerging Nigerian models and relevant international experience, the article considers what it would take to move blended finance from a useful financing instrument to a durable architecture for Nigeria’s energy transition.