Nigeria remains Africa’s most promising and attractive renewable energy market. About half of its population have limited or no access to electricity.
With a growing population of 198 million people and very favourable climatic conditions for clean energy to thrive, investors need not look any further as there is an increasing demand for gridless electricity alternatives in Africa’s most populous country.
According to a report by Future Energy Nigeria, as at January 2018 the government had invested at least $20 million on various short- and long-term clean energy projects in different parts of the country. Additional financial backing was confirmed throughout 2018, significantly from the World Bank, Africa Development Bank, USADF, USAID and loans from the Chinese government. Thus, making Nigeria one of the top 5 African countries to be watched closely in 2019 for renewable energy developments.
Also in the spotlight in Africa are Egypt, Ethiopia, Morocco and South Africa. Nigeria’s unique close proximity to the equator ultimately makes it the best candidate for solar power compared to the other 4 African countries.
The Rural Electrification Agency of Nigeria (REAN) confirms that solar power government projects will dominantly be in the form of the deployment of minigrid solutions and solar home systems. Recently announced plans by REAN include the deployment of 250 mini-grids to rural communities that require less than 1MW each. These will be commissioned in the first phase of partnership with the World Bank.
Besides finance, policy and regulation will play a major role to address investors’ concerns and encourage more partaking by developers.
Legal and regulatory frameworks to bolster confidence have also been established for Nigeria’s renewable energy sector. The 2016 Mini-grid Regulation allows developers to legally reserve sites through an exclusivity agreement while they prepare for the projects. Also, the permits issued by Nigeria Electricity Regulatory Commission (NERC) entitle developers to adequate compensation in the event that the main grid arrives earlier than planned and are ready to take over the mini-grid networks and customers. Furthermore, the regulatory charter ensures permit holders adhere to minimum network technical and safety standards.
The renewable energy market in Nigeria is developing and gradually unlocking its huge potentials. The growth in the market has been enabled by economic, regulatory and political factors.
Looking ahead, the future looks bright.
Hopefully, following successful presidential elections next month, 2019 will be a year of more clean energy discussions, partnerships and deployment of infrastructure- particularly minigrid power stations in rural communities. Additionally, a growing number of global solar PV developers are expected to expand operations into Africa’s largest economy.
Nigeria’s Renewable Energy Master Plan (REMP) targets 10% of total electricity generation from renewable energy sources by 2025. This will further diversify the existing energy mix to include non-fossil related and clean energy sources. With 6 years left, a sense of urgency must also be added into the mix to attain this ambitious goal.