As Nigeria battles to find solution to her energy supply crisis, local and international experts have continued to proffer ways of transitioning to climate friendly and low carbon energy sources.
The World Bank in collaboration with The Electricity Hub, an electricity-focused media organisation, recently hosted its 69th Monthly Power Dialogue to discuss the federal government’s climate action targets and ambitions, including the challenges facing the low-carbon, climate-resilient transition across various sectors.
Nigeria’s Nationally Determined Contributions (NDC) commitments, the Energy Transition Plan (ETP) and the revised Climate Change Act advocate ambitious measures for increasing renewables and transitioning to low-carbon energy sources.
The carbon neutrality roadmap envisions a complete transformation of Nigeria’s energy sector. It would require achieving some unprecedented targets, such as adding 5GW of solar capacity every year, electrifying 80 per cent of the transport fleet and converting over 80 per cent of the population to zero emissions cookstoves.
The scale of financing required to achieve these targets is truly unprecedented as some estimates suggest that Nigeria will need $410 billion more than business-as-usual spending over the next 30 years.
Blueprint reports that the panel of discussants at the power dialogue included Head, Green and Digital Economy Section, EU Delegation to Nigeria and ECOWAS, Inga Stefanowicz; Managing Partner, Business Process Solutions Consult Ltd., the local partner of Nova Scotia Power Development Limited (NSPDL), Zakari Aliyu; Research and Communications Associate, Nigeria’s Energy Transition Office (ETO), Oluwagbemisola Akinsipe; and Chief Executive Officer, ClimFinance Consulting, Chinma George.
Analysing the climate targets set by the federal government and plans to reach net-zero by 2060, Oluwagbemisola noted that the Energy Transition Office is embarking on connecting the NDC targets to current ongoing projects through international finance aids.
These projects include the Solar Power Naija Project and the Clean Cooking Expansion Plan, which seek to provide clean energy sources for electrification and cooking purposes and reduce the country’s carbon emissions.
On Nigeria’s climate action plans the communications associate highlighted that most solutions needed to reach net-zero are not cost-effective. Therefore, there is a need for the government to implement policies that will attract private sector players to invest in climate-friendly solutions to attain its target.
On her part, Inga Stefanowicz noted that the EU was positioned to assist Nigeria in achieving its climate targets. She pointed out that the Union has collaborated with the Office of the Vice President to assist in some studies related to rolling out the Clean Cooking Expansion programme.
She, however, noted that the EU’s ban on financing fossil fuel projects is stringent. It has divested its funding into renewable energy development and kickstarted the commercialisation of renewable energy projects in Nigeria.
The EU delegation to Nigeria and ECOWAS added that about €200 million had been disbursed as grants to support the development of off-grid solar projects. Highlighting the EU’s latest program, Inga noted that the EU intends to support Nigeria’s energy diversification plans through engagement with stakeholders.
The EU has already started co-funding opportunities with the German government. Inga further stated that the EU is looking towards capacity development and training for small energy development businesses to make them attractive for foreign and local investments, she added.
Addressing the possibility of improving decarbonising the energy sector via renewable energy, Zakari Aliyu noted that utility-scale solar projects could improve energy access exponentially. He said about 14 solar energy companies had signed power purchase agreements (PPA) with the federal government on utility solar investments.
However, while this project has significant electrification potential, it has suffered setbacks arising from exchange rate, payment, and sovereign guarantees challenges.
In addition, “the sector lacks sector maturity as it is not ready for bilateral trading. Hence, there is a need for the government to provide the financiers with guarantees of return on investments for utility-scale solar projects,” he stated.
The managing partner, also noted that the federal government, through the office of the special adviser on infrastructure, in collaboration with the ministries of power and finance, intend to create a blended financing provision for solar independent power plants (IPPS).
“This agreement will see financial institutions such as InfraCorp, Africa Finance Corporation (AFC), and local banks provide naira lending opportunities to enable the IPPS to access adequate repayable capital for projects in the short term,” he disclosed.
