Lagos, Sept. 7th, 2015

RENEWABLE ENERGY SECTOR CONSTRAINTS AND SOLUTIONS

Access to Markets

Access to Finance

Policy and Regulation

Technical Capacity

RE Sector Constraints

Nigeria's RE sector offers supply but suffers from limited demand.

ACCESS TO MARKETS

Country Electricity Power

Consumptions

USA 13,240 kWh

SOUTH AFRICA 4,606 kWh

EGYPT 1,743 kWh

INDIA 713 kWh

NIGERIA 149 kWh

Consumption Comparison

Energy Supply

Total Installed Capacity- 10,396 MWAvrg. Monthly Output- 4,500 MW

Estimated Demand- 40,000 – 120,000 MWUn-Met Demand - 35,500 – 115,500 MW

WHY is demand for RE low?

Poor level of Awareness 6% H and 9% of SME’s

reported being familiar with RE benefits

85% H and 61% SME’s reported never seen an RE advert

Poor Quality ( skewed perception) 5% H and 20% of responded

that they trust the quality of RE products sold in Nigeria.

Reasons for low demand

Lack of incentives 85% of households don’t think

there are enough incentives to adopt RE. 100% could not name any.

77% of SME’s did not think there are enough incentives to adopt RE

High upfront cost 70% of Households don’t think

future savings are enough incentive.

91% of SME’s don’t think future savings are enough incentive.

Reasons for low demand

Government Provide Awareness of

reliability and cost savings.

Provide Incentives for developers and consumers.

Developers Product Marketing (beyond

Direct Sales)

Quality Installations.

Service and Maintenance

Consumers Reduce entry barrier (A2F)

Solving low demand

Opening the doors for RE

ACCESS TO FINANCE A2F

Barriers to RE/EE Finance

• Lenders unfamiliar with RE/EE Enterprises• High collateral requirements (above 100%)

• High interest rates,

• Short loan tenors

• Most Banks do not know how to calculate credit risk analysis for RE/EE projects

• RE/EE enterprises have little credit history with banks• Lack of understanding of banking principles,

• Short credit history, limited experience with lenders

• New and inexperienced companies

• RE/EE Sector considered risky

• Consumers - High Cost of Entrywww.winrock.

org

Banks Training in RE lending (Winrock)

Technical Assistance (Winrock)

RE developers Understand and build relationships with

lenders

Certification (GIZ-Winrock)

Government and Int. PartnersConcessionary Lending

Credit Guarantees (Reduce collateral)

Overcoming A2F

OptionsConsumer Finance

(Ecobank)

Lease back

Pay as you Go

SILVER BULLETLow cost consumer finance product to smooth out

payments and reduce the entry barrier.

Overcoming A2F

Creating the Enabling Environment

POLICY AND REGULATION

No standards for RE/EE equipment SON to set robust quality standards to

insure reliable equipment

Lack of incentives for consumers (private and commercial) Reduction in property tax. (land use,

tenement rate)

VAT for RE products

RE loans interest rate rebate

Facilitate selling excess energy back to grid

Corporate tax brake for those that invest in going green. (Telcos, Banks)

POLICY

Lack of incentives for the industry Import tariff waivers for RE

equipment

Excise Duty waivers for RE products

Regulatory VoidMini Grid regulation that

protects operators.

Feed-in tariff that reflects cost of RE technologies

POLICY

Installation, Service and Maintenance – Reliability and Quality

TECHNICAL CAPACITY

Administration Build up management structure

and the capacity to produce bankable business plans.

Service and Maintenance Scale up capacity to service and

maintain systems. Make S&M a business in itself (SLA).

Technical Staff Insure technical staff is trained if

RE technologies.

Certification

Technical Capacity Constraints

GIZ and Winrock have joined forces to develop a simple, low cost national certification system for Renewable Energy practitioners.

CERTIFICATION

TRAINING COURSES

1 Off-Grid RE Designer 7 weeks

2 Solar PV Installer 4 weeks

3 Solar PV Installer Supervisor 6 weeks

4Small Hydropower Civil

Works4 weeks

5 Energy Manager 4 weeks

6 Energy Auditor 8 weeks

7Energy Efficient Building

Design3 weeks

SERC Sokoto

NCERD Nsukka

NCEEC Lagos

R&T

R&T

R&T

R&T

ISSCeRERKatsina

GTDI, UoIIbadan

CREN, FUTA Akure

T

TInt’l Energy Acade

my

NAPTIN Kainji

BAS Consulting Lagos

R&T

In order to overcome the Renewable Energy constraints, Developers, Government, International Partners and other stakeholders need to work together. All stakeholders need to contribute their part and coordination will be the key to success.

Markets function only when all the pieces come together.

Conclusions

Thank YouJavier Betancourt, Chief of Party, REEEP

Winrock InternationalFlat3, Block 51, E Close OAU Quarters

Maitama, Abuja, Nigeriawww.winrock.org

| mobile +234 909 7320954 |