April 16, 2024

President Bola Tinubu and Mr. Ayo Ademilua, President REAN

Oredola Adeola

 

The Renewable Energy Association of Nigeria (REAN) has called on President Bola Tinubu to address the persistent barriers confronting the sector, including difficulties in accessing foreign exchange and removal of import duties, taxes, and excessive levies on the importation of renewable energy technologies.

 

REAN made this known in a statement commending President Tinubu for signing the new Electricity Act into law on June 9, 2023, while also demanding the removal of persistent barriers to the growth of the renewable energy sector in Nigeria.

 

According to REAN, import duties, levies, taxes, and difficulties in accessing foreign exchange are some of the barriers that have contributed to the high upfront cost of renewable energy solutions and hindered adoption.

EnergyDay’s check showed that the new Electricity Act in Nigeria mandates the Nigerian Electricity Regulatory Commission (NERC) to provide feed-in tariff rates for electricity generated from renewable energy sources.

The Act also mandates the electricity-generating companies (GenCos) to generate power from renewable energy sources, purchase power generated from renewable energy, or procure any instrument representing renewable energy generation, all aimed at encouraging investment in renewable energy power generation.

 

The REAN in the statement, therefore, emphasised that the implementation of new renewable energy policies and regulations will ensure the smooth running of the renewable energy business in Nigeria. 

It said, “We recognize the significant impact of electricity and firmly believe the effective implementation of this Act will unlock the opportunities to expand Nigeria’s renewable energy (RE) sector.

 

“This expansion will significantly increase revenue generation, attract investment, promote economic development and substantially reduce unemployment. As an

 

“Given the immense potential of renewable energy, it is noteworthy to highlight the importance of expansion and the need to address the persistent barriers confronting the sector.

 

“First, favourable policies and regulations must be effectively implemented and enforced to achieve the desired change. Additionally, difficulties in accessing foreign exchange for the smooth running of the Renewable Energy business should be addressed,” the statement noted.

 

REAN further charged the government to address high import duties, taxes, and excessive levies on the importation of renewable energy technologies that have hitherto contributed to the high upfront costs of Renewable Energy (RE) solutions and hindered their adoption.

 

The Association said, “Addressing these challenges is crucial to significantly reducing energy poverty in the country and bridging the gap.

 

“Recognising the positive impact of this law on the power sector we urge the government to take measures to address the challenges faced by private industry players.

 

“These measures include providing favorable policies and regulations, ensuring effective policy implementation, increasing funding and support, offering incentives for RE access, and supporting local assembly and manufacturing of renewable energy equipment,” it said.

 

The REAN therefore emphasised that adopting a market-driven approach and removing high import duties, including VAT and excessive levies on importing renewable energy technologies, would be beneficial to the successful implementation of the Electricity Act, which will unlock opportunities to expand the renewable energy sector, enhance electricity access for all citizens, and foster environmental sustainability.