Nigeria, Africa’s biggest oil exporter, may be about to turn sunward to generate more of its power.
Senators in the capital of Abuja are debating an allocation of $30-million to solar projects in this year’s Budget, according to the Renewable Energy Association of Nigeria (REAN). They are expected to provide funding for off-grid solar projects, photovoltaic (PV) manufacturing, and transmission upgrades, according to REAN executive secretary Godwin Aigbokhan. A decision is expected by the end of this month.
“It just gives you an idea of how government sees solar as part of the total energy mix,” says Aigbokhan. The country could receive about $2.5-billion of investments in utility-scale solar projects by 2018, he says.
Just months after Nigeria announced plans to issue green bonds for renewable-energy projects, West Africa’s biggest economy is debating how it could deliver clean power to more of its 180-million citizens. It is part of a growing list of Organisation of Petroleum Exporting Countries, including Saudi Arabia and the United Arab Emirates, that are increasing the use of green power.
Nigerian officials say they want to generate as much as 1 200 MW of off-grid solar. The country’s households and small businesses currently spend about $21.8-billion each year powering diesel generators to generate electricity, according to a study by German development agency GIZ.
“The ubiquity of small diesel generators used to bridge gaps in grid-supplied power already makes solar panels that cut fuel costs an economic option,” says Itamar Orlandi, head of frontier power research at Bloomberg New Energy Finance (BNEF).
Nigeria has said it wants to increase the contribution of renewables to its energy mix to 23% by 2025, from 13% in 2015. Interest in solar has already increased, with more than $50-million of Chinese PV panels imported in the last two years, according to BNEF.
In January, the Niger Delta Power Company signed an agreement with Azuri Technologies to provide power systems for 20 000 rural households living without access to the grid. Nigerian Vice President Yemi Osinbajo says the deal underscores government’s commitment to providing access to electricity.
Nigerian policymakers, who already privatised State power assets in 2015, are continuing to formulate incentives for utility-scale solar investors, according to Aigbokhan.
“There are put-call option agreements in place and partial risk guarantees, so what should stop a foreign investor coming to Nigeria,” he says.
Privatising the power sector two years ago created room for developers like Erabor Okogun, the founder of Nemoante, to win projects. The Lagos-based solar developer signed a 120 MW power purchase agreement with government in July last year and expects more opportunities.
“Nigeria’s working population is just over 70-million people,” Okogun said in a telephone interview. “Any aspiring industrial nation typically requires about 1 MW of energy for one-million people, so providing sufficient power for those individuals alone is a 70 GW opportunity.”