A Preliminary Evaluation of Renewable Energy Technology Financing Options for Nigeria

Abstract

Renewable energy technologies (RETs) ought to play a complementary role to conventional energy technologies as these have the potential to meet up energy needs in rural areas with regards to access, availability and affordability. Despite these potentials, the current challenge is how to finance their deployment and services. Since long-term growth in the market for RETs is going to be determined by social and economic development that is occurring in both the rural and urban areas as well as the ability of these technologies to compete financially with other energy options on a level playing field, there is need to evaluate various options available to finance the deployment of RETs in Nigeria. This paper attempts a preliminary evaluation of the possible options and their implications for sustainable commercial financing of small-scale RE projects in the rural areas of Nigeria. It is divided into five sections. The first section is the introduction which provides background information, next section “Overview of energy and financing needs of rural people” gives the market definition and an overview of energy and financing needs of rural people; this section also reviews energy access, availability and affordability challenges. It also gives an overview of RET financing barriers in Nigeria. The next section gives the possible RETS financing barriers in Nigeria. RET financing options for Nigeria are discussed further in the next section, Conclusion are discussed in the end of paper by stressing the need for an enabling environment for financing RETs.