NIGERIA Invest in 2012-13 - Newsdesk Media

of one gigawatt coal-fired power plants in the states of Enugu
in the south-east, Kogi in the central region, and Gombe in
the north of the country. But it is renewable energy sources
that have the potential to provide electricity to regions
and communities where the grid either does not stretch,
or remains underdeveloped.
Water world
Nigeria’s Renewable Energy Masterplan puts hydroelectric
power at its centre. It aims to produce 5,930 megawatts (MW)
from large hydro schemes in the medium term – by
approximately 2015 – and 48,000 MW by about 2030, when
19,000 MW will also be generated from small hydroelectric
schemes to take electricity to smaller communities.
By then, the total power output target is 192,000 MW,
according to the Energy Commission’s targets, with renewables
contributing more than one third of that total.
However, in order to deliver more than just one twentieth
of that output, the country will need to invest heavily in its
power transmission and distribution network. When power
output was increased to 3,800 MW
in August last year, the network struggled to handle even that
modest load. The system also suffers from high energy losses,
says Sambo, due to physical deterioration of transmission and
distribution facilities, an inadequate metering system, and the
loss of electricity – and revenues – as a
result of power theft via illegal connections.
That is partly why Nigeria is
deregulating and privatising its electricity
industry: in order to attract and facilitate
private-sector and foreign expertise and
investment across its whole
power-generation industry.
At the same time, organisations such
as the Council for Renewable Energy in
Nigeria (CREN) are encouraging the adoption of small-scale
schemes, such as solar thermal and photovoltaic (PV) systems,
for offices and homes. CREN has led by example by installing
PV solar in its Cross River State chapter offices to demonstrate
how solar can provide power off-grid, and demand for
microgeneration has encouraged the establishment of a
plethora of solar-power installation companies across Nigeria.
Financing options
One of the major advantages of investment across the whole
power sector – not just renewables – is the financing available.
National export credit agencies (ECAs) are especially keen to
finance whole projects, not just the hardware, such as
turbines. The Export-Import Bank of the United States
(US Ex-Im Bank), for example, has pledged backing for
$1.5 billion of US goods and services across the whole
Nigerian energy sector in a memorandum of understanding
signed in October 2011.
“$1.5 billion is just the start. We want to deploy this
financing as quickly as possible to help meet President
Goodluck Jonathan’s goals for growing the Nigerian
economy by greatly expanding the availability of power in
the country,” said US Ex-Im Bank chairman and president
Fred P Hochberg. He added: “We are also interested in
financing US exports in support of Nigeria’s other
infrastructure needs, which we understand may total
over $220 billion between 2012 and 2016.”
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Renewable energy
Nigeria is not just attracting US support. Canadian
construction companies have also expressed an interest in
partnering on the proposed Mambilla and Gurara hydroelectric
power projects, a move welcomed by Professor Bart Nnaji, the
minister of power. Those two schemes are expected to jointly
produce some 3,300 MW of electricity.
In addition to support from ECAs, investors can
also secure funding from the United Nations’ Clean
One of the major advantages of
investment across the whole power
sector is the financing available
Development Mechanism (CDM). This channels finance
from developed countries’ carbon-emitting industries
into clean energy and development programmes
across the emerging markets.
That is partly how entrepreneur Obasiohia Benneth
Obinna hopes to finance ambitious plans for an
energy-from-waste business. The aim is to help deal with some
of the estimated 9,000 tonnes of waste generated every day in
Nigeria by burning it to produce power for Nigerian city
neighbourhoods. A waste-management expert trained in the
UK, Obinna is currently seeking investors to back the business,
which will be the first in Nigeria.
INvEst IN NIGERIA 2012-13