Nigeria’s economy needs quick and stable growth over the next few years if it is to exit one of its most painful recessions in recent history and lift millions of people out of extreme poverty.
To achieve this growth, Nigeria will require a lot of energy, regardless of what sector gives the growth. In agriculture, fertilisers, tractors, and combine harvesters are needed to make the sector more productive would all require energy. Energy is also required to power computers, phones, data centres, and communication infrastructure that the technology sector needs to work.
To catapult Nigeria’s economic growth and match it to the growing population, most stakeholders have recommended that the country needs to adopt a faster, cheaper and more sustainable electrification expansion strategy.
They suggested that adopting clean sources of energy is not just a sustainable choice, but a robust and reliable decision that will ensure the economy is kept running long after the coronavirus pandemic is over.
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“The arguments for scaling up access to solar power are compelling,” the World Economic Forum reported this month.
A few weeks ago, the World Bank estimated that Nigeria’s revenues will fall by the equivalent of at least 2 percent of gross domestic product in 2020 alone as a result of the oil price slump. Remittances, which made up about 5 percent of GDP last year, are set to fall as much as 20 per cent this year.
“First, solar is increasingly affordable (costs have fallen five times in the past decade) and more viable for poor communities than the current alternative: unhealthy and polluting diesel generators, which are expensive to operate and add to carbon emissions,” reports the World Economic Forum.
Abundant sunlight and technological developments have improved the cost-competitiveness of solar power generation. Solar Home Systems (SHS) and PV lanterns have become considerably cheaper than key baseline fuels, such as kerosene, making renewable energy affordable for millions.
Nigeria doesn’t have the luxury of slowly adopting renewable energy. Although about 57percent of Nigerians are connected to the grid, 99percent of these grid users experience many power outages, forcing them to spend over $6.93 a week buying fuel to power fossil fuel generators.
According to the World Bank, the economic cost of power shortages in Nigeria is $ 28 billion, equivalent to 2percent of GDP and getting access to electricity ranks as one of the major constraints to the private sector.
Nigeria also has the world’s second-largest absolute electrification deficit with about 43percent of Nigerians (88m people and roughly Germany’s entire population), living off-grid.
Among these challenges, Nigeria has embraced and accelerated investment in renewable energy, with a case more compelling than the adverse effects of climate change – the economic bottom-line.
On December 14, a commercial and industrial (C&I) solar power provider Starsight and Chapel Hill Denham Nigeria Infrastructure Debt Fund (NIDF) announced the successful closing of a N3.6 billion ($9.2m) senior debt facility.
Starsight has completed over 500 sites in Nigeria since 2015. The company currently has 36MW of installed generating capacity and 28MWH of storage across Nigeria and Ghana.
