Britain has indicated interest in boosting her investments in renewable and climate change projects in Nigeria, and will also in the mean, make available the sum of 10 million pounds ($13.6 million) of support, British Minister for Africa, Vicky Ford said in her first trip to the country.
It is no longer news that the country is going through economic meltdown due in part to shortage of power in Nigeria, as demand largely outnumbers supply, meaning its 200 million inhabitants must either go without or rely on expensive, fume-belching generators.
The country has installed Nigeria capacity to produce an estimated 7,000 megawatts (MW) of power, but as a result of weak infrastructure, gas supply challenge and water shortages only a little more than half of that reaches the national grid.
According to Ford, the financing invested together with Nigerian credit guarantee firm InfraCredit will in no small measure gingers in mobilizing domestic pension and insurance investments and reduce risk for projects targeting off-grid and low-carbon ventures.
“This transaction … brings together UK government support with the institutional capital which is essential to grow the sector at scale,” Ford said in a statement on Monday.
The Nigerian sovereign fund, co-investor in InfraCredit, is aiming at delivering up to 250-500 megawatts of renewable energy capacity in Nigeria, it said in the statement.
Nigeria has more than 12 trillion naira of institutional financing held in pensions, insurance and wealth funds, mostly invested in government securities or sometimes in Nigerian shares. However, around 0.5% of pension assets are invested in infrastructure funds in Nigeria, less than a 4% limit.
As the world looks to transition to clean energy, Ford said the British financing will expand opportunities for the private sector and provide affordable long-term financing from local investors to off-grid and low-carbon projects.
The British High Commission said in a paper that Britain has provided more than 80 million pounds for the renewable energy sector in Nigeria, including grants and lending.
(With report from Reuters)