This document summarizes the constraints facing Nigeria's renewable energy sector and potential solutions. The key constraints identified are limited access to markets, finance, supportive policy/regulation, technical capacity, and awareness. Nigeria's electricity consumption and unmet demand are high while access to markets is constrained by a lack of incentives, high upfront costs, and low awareness. Overcoming these barriers will require coordinated efforts from developers, government, and other stakeholders to improve access to finance, develop standards and incentives, boost technical skills, and increase public awareness of renewable energy benefits. Cooperation across all sectors is needed to strengthen Nigeria's renewable energy market.

1. Abuja, Oct. 14th to 16th, 2015
RENEWABLE ENERGY SECTOR
CONSTRAINTS,SOLUTIONS AND
FINANCING

2.  Access to Markets
 Access to Finance
 Policy and Regulation
 Technical Capacity
RE Sector Constraints

3. Nigeria's RE sector offers supply but suffers from limited
demand.
ACCESS TO MARKETS

4. Country Electricity Power
Consumptions
USA 13,240 kWh
SOUTH AFRICA 4,606 kWh
EGYPT 1,743 kWh
INDIA 713 kWh
NIGERIA 149 kWh
Consumption Comparison

5. Energy Supply
Total Installed Capacity- 10,396 MW
Avrg. Monthly Output- 4,500 MW
Estimated Demand- 40,000 – 120,000 MW
Un-Met Demand - 35,500 – 115,500 MW
WHY is demand for RE low?

6.  Poor level of Awareness
 6% H and 9% of SME’s
reported being familiar with
RE benefits
 85% H and 61% SME’s
reported never seen an RE
advert
 Poor Quality ( skewed
perception)
 5% H and 20% of responded
that they trust the quality of
RE products sold in Nigeria.
Reasons for low demand

7.  Lack of incentives
 85% of households don’t think
there are enough incentives to
adopt RE. 100% could not name
any.
 77% of SME’s did not think there
are enough incentives to adopt
RE
 High upfront cost
 70% of Households don’t think
future savings are enough
incentive.
 91% of SME’s don’t think future
savings are enough incentive.
Reasons for low demand

8.  Government
 Provide Awareness of
reliability and cost savings.
 Provide Incentives for
developers and consumers.
 Developers
 Product Marketing (beyond
Direct Sales)
 Quality Installations.
 Service and Maintenance
 Consumers
 Reduce entry barrier (A2F)
Solving low demand

9. Opening the doors for RE
ACCESS TO FINANCE

10. Barriers to RE/EE Finance
• Lenders unfamiliar with RE/EE Enterprises
• High collateral requirements (above 100%)
• High interest rates,
• Short loan tenors
• Most Banks do not know how to calculate credit risk
analysis for RE/EE projects
• RE/EE enterprises have little credit history with
banks
• Lack of understanding of banking principles,
• Short credit history, limited experience with lenders
• New and inexperienced companies
• RE/EE Sector considered risky
• Consumers - High Cost of Entry
www.winrock.
org

11. Developer meets EcoBank or Winrock with
interest for RE Project financing
Winrock and NEMSA does a due diligence
assessment of the RE developer
Developer does not scale through then we
do an upgrade course where possible
Overcoming access to Finance
breakdown formula

12. Developer scales through, then we
recommend to EcoBank for loan
application
Project developer present business case
proposal
Developer is assessed by EcoBank for
financial credibility and related financial
issues
Developer get loan facility
Overcoming access to Finance
breakdown formula

13. Developer commences project
Project is monitored by Winrock
where possible
Project is assessed and inspected by
NEMSA
Project is given pass mark by
Winrock and NEMSA
Overcoming access to Finance
breakdown formula

14. Project developer gets his CAPEX
and OPEX back by lease
repayment plan or “pay as you
go” repayment strategy
Project developer pays back loan
Overcoming access to Finance
breakdown formula

15. Creating the Enabling Environment
POLICY AND REGULATION

16.  No standards for RE/EE equipment
 SON to set robust quality standards to
insure reliable equipment
 Lack of incentives for consumers
(private and commercial)
 Reduction in property tax. (land use,
tenement rate)
 VAT for RE products
 RE loans interest rate rebate
 Facilitate selling excess energy back to
grid
 Corporate tax brake for those that invest
in going green. (Telcos, Banks)
POLICY

17.  Lack of incentives for the
industry
 Import tariff waivers for RE
equipment
 Excise Duty waivers for RE
products
 Regulatory Void
 Mini Grid regulation that
protects operators.
 Feed-in tariff that reflects cost
of RE technologies
POLICY

18. Installation, Service and Maintenance – Reliability and
Quality
TECHNICAL CAPACITY

19.  Administration
 Build up management structure
and the capacity to produce
bankable business plans.
 Service and Maintenance
 Scale up capacity to service and
maintain systems. Make S&M a
business in itself (SLA).
 Technical Staff
 Insure technical staff is trained on
RE technologies.
 Certification
Technical Capacity Constraints

20.  GIZ and Winrock have joined forces to develop a simple,
low cost national certification system for Renewable
Energy practitioners.
CERTIFICATION

21. TRAINING COURSES
1 Off-Grid RE Designer 7 weeks
2 Solar PV Installer 4 weeks
3 Solar PV Installer Supervisor 6 weeks
4
Small Hydropower Civil
Works
4 weeks
5 Energy Manager 4 weeks
6 Energy Auditor 8 weeks
7
Energy Efficient Building
Design
3 weeks
SERC
Sokoto
NCERD
Nsukka
NCEEC
Lagos
R
&
T
R
&
T
R
&
T
R
&
T
ISSCeRER
Katsina
GTDI, UoI
Ibadan
CREN,
FUTA
Akure
T
TInt’l
Energy
Acade
my
NAPTIN
Kainji
BAS
Consulting
Lagos
R
&
T

22. TRAINING COURSES
1 Off-Grid RE Designer 7 weeks
2 Solar PV Installer 4 weeks
3 Solar PV Installer Supervisor 6 weeks
4
Small Hydropower Civil
Works
4 weeks
5 Energy Manager 4 weeks
6 Energy Auditor 8 weeks
7
Energy Efficient Building
Design
3 weeks
SERC
Sokoto
NCERD
Nsukka
NCEEC
Lagos
R
&
T
R
&
T
R
&
T
R
&
T
ISSCeRER
Katsina
GTDI, UoI
Ibadan
CREN,
FUTA
Akure
T
TInt’l
Energy
Acade
my
NAPTIN
Kainji
BAS
Consulting
Lagos
R
&
T

23. Power deliver technology, Localization and Hybridization – availability and
Sustainability
TECHNICAL METHODOLOGY

24. De –emphasize on the grid and
concentrate on mini-gird
Develop alternative R.E sources and
localize power generation
Emphasize on energy efficiency
consumer appliances and equipment
Develop hybrid R.E power systems using
local resource
Technical methodology

25. Blue Carmel has developed the first
full R.E operated Estate or block of
Apartments in Nigeria. It runs on
Solar/Wind turbines and provision for
a standby 100KVA diesel generator
Avenim links is building mini-
affordable biogas digester for
domestic homes; providing cooking
gas
Technical methodology case study

26. Quintas has developed Gasification
stoves and turbines, which use corn
cubs, Palm kernel Shells (PKS) to
provide industrial cooking and
electricity in Nigeria.
Presco Oil and Oil palm company has
built a biogas digester using Palm oil
mill effluent (POME) to produce
electricity for the oil mill. It generates
1.4Megawatts of electricity with a
capacity for 2Megawatts.
Technical methodology case study

27.  In order to overcome the
Renewable Energy constraints,
Developers, Government,
International Partners and other
stakeholders need to work together.
All stakeholders need to contribute
their part and coordination will be
the key to success.
 Markets function only when all the
pieces come together.
Conclusions

28.  In order to overcome the
Renewable Energy constraints,
Developers, Government,
International Partners and other
stakeholders need to work together.
All stakeholders need to contribute
their part and coordination will be
the key to success.
 Markets function only when all the
pieces come together.
Conclusions

29. Thank You
Samuel Ahanor, Renewable Energy Technical Specialist, REEEP
Winrock International
Flat3, Block 51, E Close OAU Quarters
Maitama, Abuja, Nigeria