The cost of doing business in Nigeria is on the rise. Apart from inflation, the erratic power supply is adding to that spiraling cost. Although the Federal government is doing its best to improve the energy supply in the country, the efforts seem never enough. Well, the problem in the Nigerian energy sector may soon significant improvements.
The UK minister for Africa, Vicky Ford, announced on Monday, 22 February 2022 that the country is offering 10 million pounds (approx. $13.3 million) concessional aid for Nigeria energy sector. The fund will go into the development of off-grid low-carbon energy projects. This includes clean cooking infrastructure, home systems, and cold storage infrastructures.
“The UK is committed to increasing both renewable energy and energy access in Nigeria, driving clean, sustainable, and resilient growth,” said Ford
The announcement was at a formal ceremony held at the residence of the British High Commissioner to Nigeria. Present at the occasion was Mr. Jeddy Agba, Nigeria’s Minister of State for Power. Ms. Ford hopes it helps Nigeria improve energy access as well as help the country stay in tune with her COP26 commitments. According to Ford,
“As the world looks to clean growth, we are witnessing an era-defining opportunity for the private sector. This transition is particularly exciting as it brings together UK government support with the institutional capital, which is essential to grow the sector at scale.”
Is the International Community Doing Enough to stop Climate Change?
According to Our World in Data statistics, Asia, North America, and Australia have the highest carbon emissions in the globe. In other words, they are the major contributors to global warming. Africa sits at the bottom of the log.
Perhaps, it is this realization that made Mr. Agba criticize developed countries for not collaborating enough with African countries that are willing to cut down their carbon emission. According to Mr. Agba, Nigeria is implementing clean energy transition schemes across different states. This includes Lagos, Borno, and Kano.
The minister believes that more could be done if only the private sector has access to funds. Currently, the country has the largest clean energy program on the continent. Mr. Agba also revealed that Kano, Borno, and Lagos states have developed investor-grade data.
“It is important for international partners to start contemplating on how best they can collaborate with these institutions to define blended finance models that combine local institution capital with foreign currency dominated support to unlock local currency financing of off-grid development in a large scale,” Mr. Agba said.
This is not the First Time the UK is funding Nigeria’s Energy Sector
While the new fund for Nigeria’s energy sector is laudable, it is important to mention that it is not the first time the country will be getting such donations from the UK. Available data shows that Nigeria received over £80 million (approx. $107.3 million) from the UK from 2014 to 2022 for its renewable energy sector.
The support from the UK has mostly come in the form of grants, advisory programs, and technical assistance. In 2016, the UK made available $50 million for InfraCredit establishment. The goal of InfraCredit is to provide a local currency guarantee for renewable energy projects in Nigeria.
How to Ensure Sustainable Energy in Nigeria
Nigeria currently relies on hydroelectric power for its energy generation. However, the available infrastructure is not producing enough energy to serve the rapidly growing population. Therefore, there is a need for the country to explore other forms of energy generation
Thankfully, the country has an abundant supply of wind and solar radiation. Therefore, the right step to eliminating the erratic power supply in the country would be for the government to invest in renewable energy infrastructure such as the Quilemba Solar Power Station in Angola.
Obviously building solar infrastructure is costly. However, it is a long-term investment that pays for its initial high cost over time. The Nigerian government, just like the Indian government, should enact policies that will encourage the entire public to embrace sustainable energy.
This can come in form of rebates to individuals that decide to install solar power in their homes. Also, rather than subsidizing petroleum in the country, the government can channel that money to subsidizing solar installations in the country.