Nigeria’s Renewable Energy Reforms Faces Financing Obstacles

Private sector stakeholders and the government say the renewable energy sector needs more policy stability to secure funding in the face of rising market risks, as the nation explores alternative energy sources.
At a two-day Stakeholder Engagement on Finance for Rural Electrification & Renewable Energy Sector held in Abuja, which was organized by the Renewable Energy Association of Nigeria (REAN), stakeholders say ambitions for the industry will need backing with suitable policy in light of rising market risks and financing challenges.
The Centre for Social Justice (CSJ) participated in the meeting. CSJ’s Energy and Environmental Reforms intervention is aimed at the establishment and maintenance of an inclusive and participatory platform that will contribute to the development of a rule-based Nigerian power sector that is self-reliant, environmentally friendly, sustainable, promoting universal access to affordable and quality electricity to support national development.
Jochen Luckscheiter, the Country Director, Heinrich Boll Stiftung, said, “If Nigeria was to realise its vision 30:30:30 and rural electrification targets as planned, we ought to be speaking of mini-grid deployment in their hundreds by now. Over the years, Nigeria has put in place the requisite policies, regulations, institutions and targets to increase rural electrification rates and the renewable energy capacity in the country.”
This, he said, included among others, the revitalisation of the Rural Electrification Agency and Fund through the Rural Electrification Strategy and Implementation Plan.
Luckscheiter said that this is in addition to the introduction of the National Renewable Energy and Energy Efficiency Policy with its accompanying vision of 30:30:30.
“The Renewal Energy Fund has implemented two investment calls to boost rural electrification through decentralised renewable energy and has successfully gone through its early-stage development. It has also scaled through important learning curves, a phase of rapid growth, but scaling of projects has so far failed to materialise.
“There are of course multiple obstacles and factors that have weight on the growth of rural electrification and the decentralised renewable energy sector. The financing gap for achieving rural electrification is huge, renewable energy developers have found it difficult to access social intervention funds by government and customer focused financial products that would smoothen the uptake of stand-alone solutions are sorely lacking, among other issues,” he said.