Energy and investment experts on Friday, noted that the challenge of power access predominant in Nigeria and Africa, can be overcome through government’s support of and interest in private sector investments.
According to the World Economic Forum, over $200 million worth of support is needed to support startups in energy sector to meet Africa’s energy targets for 2030 and 2050.
Experts at the ongoing 2021 Energy Sustainability Conference organized by the Energy Institute Nigeria, were unanimous in their observations that private investments needed to be encouraged by the government to meet energy demands, as well as to power the growth of Nigerian economy.
Panelists during a Special Hub Session tagged: “Scaling up Power Investments to Fuel Economic Growth in Africa”, also said that the battery value chain in the solar energy industry is largely untapped.
They advised the Federal Government to attract more investments into the renewable energy industry in readiness for its transitioning plans, especially against decarbonization.
It was observed that there is a huge energy gap in Africa, yet its off-grid solar sector in Africa represents a $24 billion annual opportunity. Energy power accessibility in the region is the lowest globally.
About 600 million Africans do not have access to power supply.
The panelists maintained that reducing Energy Poverty through any available energy source is far more important to the African continent now, than trying to achieve the global decarbonization agenda.
Dr Jubril Adeojo, one of the panelists who is the Co-Founder, SME Funds Capital, said that the entire value chain in the Nigeria power industry needs serious capacity building, including in projects and corporate finances.
He emphasized the need for Nigeria to get prepared for an eventual transitioning to renewables by investing a little fraction of its oil revenues in renewable energy projects ahead of time.
“The Government should know that large-scale industrialization of the power sector cannot happen without the renewable energy industry.
“More attention should be given to the renewable energy industry.
“Yes, gas is key but Nigeria should start getting ready for the next 20 or 30 years.
At least, 5% can be invested in Retail Market Design Service (RMD) yearly, from NNPC’ s revenue,” he said.
He explained that Federal Government’s influence on the Transmission Company of Nigeria, TCN , has made it difficult for it to allow the expansion attempts of Power Distribution Companies (DisCos), to see the light of day.
“There are areas where DisCos want to expand but the TCN is not giving it the chance because the Government still has control over it,” he said.
Also speaking, Rolake Akinkugbe-Filani, member advisory board, Africa Energy Chamber & Persistent, said regulators in the power sector need to create an enabling enviroment for investors to want to risk their capitals.
“Those in construction & building need financing. We need the support of the government to see more private investments.
“In order to attract longterm competitive financing now, projects by any private investor needs to be innovative.
“Solar energy projects, in particular, will attract quicker and more financing as they are in line with the world’s climate change agenda.
“Regulators should help the private sector to develop the risk appetite for investment in the power industry,” she said.
She said that Development Financial Institutions (DFIs) should help provide the financial support for off- takers in the solar energy industry so that they can get liquidity in any project.
“In the solar energy industry, the battery value chain has not been fully tapped.
“here is still a huge investment opportunity there. Taking advantage of that will improve our Environmental, Social and Governance (ESG) efforts.
“The focus should be on what we can do to transform the power sector rather than chasing after the Net-Zero vision. Nigeria still need to work with what it presently has,” she said.
“We want to see DFIs provide off takers, especially in the solar energy space, with funding so that can have liquidity in various projects,” Akinkugbe-Filani said.