Solar equipment is priced in dollars and yuan; many Nigerian customers earn in naira. After the 2023–24 devaluation, no serious provider will sign an 8-year naira contract without protection — and no serious customer should. Here is how we make it work.
Key facts
- Minimum for a naira contract: about US$1M of equipment — roughly two standard sites or ~US$21,000 a month in fees.
- Protection 1: fee tied to the dollar, invoiced in naira at the official rate, reset monthly.
- Protection 2: standby letter of credit from a tier-1 Nigerian bank covering 6–12 months of fees.
- Protection 3: credit and political-risk insurance. Protection 4: 40% paid upfront at signing.
Why there is a floor
The protections cost roughly the same on any deal — about US$40,000–60,000 one-off for legal, guarantee set-up, insurance underwriting and credit checks, plus 1–3% a year for the bank guarantee. On a US$200,000 project that is unaffordable; on US$1M it is a rounding error. The floor is not about inflating projects; systems are always sized to real load. It filters for companies whose real need is already that large.
Who qualifies
- Revenue at least 20× the annual fee (about US$5M+ for a US$1M project)
- Able to keep paying after a further 50% naira devaluation
- 3+ years of audited accounts
- A tier-1 bank relationship for the guarantee
Alternatives for smaller naira businesses
Buy the system outright in naira at the official rate on the day; combine several sites under one contract to reach the floor; or pay in dollars through a parent or trading company. A full currency swap is a last resort — long-dated naira hedges are scarce and cost roughly the interest-rate gap each year.
Earn in naira and run a large site? Let's structure it.
Talk to Frontières BayFrequently asked
Why not just price in naira and take the risk?
Because a contract that breaks on the next devaluation helps nobody; the protections keep both sides whole.
Does EDC provide the insurance?
Export Development Canada is one of the providers we work with for credit and political-risk cover on Canadian-supplied projects.