Growth in Nigeria’s renewable energy bright due to ease of investments—Garrick
The Founder of Energy Mix Limited, Mr. Noma Garrick has said that renewable energy is the future of the Nigerian power sector considering the huge cost involved in building mega power structures and large generation plants at the moment.
Speaking at a recent Nigeria Off Grid Investment Opportunities Workshop organised by his company to give more insight to potential investors in the sector, he said the summit was successful as it provided an avenue to give more insight and clarity to issues regarding financing and legal aspects of the market to potential investors.
Garrick explained that looking at it from a small scale perspective such as mini grids, standalones, solar, there are lots of opportunities for investors to come in, but the need to rest their fears on financing and legal issues is necessary and very needful.
He argued that leaving the entire nation’s power value chain to generation companies alone cannot electrify the nation fully “but basically in terms of covering the entire country, I think it’s a tall order to leave that to Gencos”.
Earlier in his submission, the Head of Power and Infrastructure, Corporate and Investment Banking, Standard Bank, Abiodun Oni revealed that already, about $200 million has been sunk in renewable energy investments.
He said there are clear chances for the figure to increase because there is a lot of support from global financing for renewable and what is required further to spur the market more is access to commercial lending windows to accelerate growth.
According to him, “The Developmental Finance Institutions (DFIs) like the World Bank and other multilaterals were putting a lot of efforts into renewables. Also, global institutions that have clean technologies and clean environment standards are also investing”.
“So in the equity side we see a lot of financing is going into developing renewable energy projects.”
While noting that power remains a core infrastructure for economic development of which government cannot run away from, he said “At the moment their strength in advocacy, policy and regulation creation is towards the establishment of an enabling environment, as well as the initial capital to support the early stage development remain key issues for prospective investors”.
On the capital intensiveness of the sector, Oni hinted that there are ongoing efforts to access the capital markets especially the pension market because it provides liquidity for a long period like 10-year tenure.
“What we need to do is establish the right mechanisms to allow projects access that kind of window, already the first infrastructural bond was issued in December of last year. So I believe if we can unlock that space then it will be a significant advantage for the renewable energy sector,” Oni noted.
