12 January 2016, Abuja – Mr. Nico Tyabji, is the Climatescope Africa Coordinator, Bloomberg New Energy Finance, BNEF. Before joining BNEF in 2011, he led research on mitigation strategies at the Global Network for Climate Solutions based at Columbia’s Earth Institute, and has previously worked for the International Centre for Trade and Sustainable Development in Geneva. In this online interview with Clara Nwachukwu, he insists there is now a big opportunity for Nigeria to embrace the clean energy revolution, while stressing the need for more investments in infrastructure to fast track socio-economic development in Nigeria. Excerpts:
DEVELOPING countries like Nigeria are slow to appreciate that infrastructure is critical to socio-economic development. Why do you think this is so?
The importance of energy for development is increasingly well appreciated now, but it’s certainly true that most African countries have been slow to expand their power systems. One reason is the upfront cost of building new power plants and electricity grids.
Many governments have also been slow to pass and most importantly, implement policies to attract investment. The good news is that generating electricity from renewables like solar and wind is now as cheap as using fossil fuels in many places so there’s a great opportunity for Nigeria to embrace the clean energy revolution!
Nigeria is Africa’s largest economy yet we don’t match such growth with infrastructure development. What can government do to attract more private sector involvement into the sector?
Three words: feed-in tariff. This guarantees that the price solar, wind and other projects will be paid for the power they produce. Nigeria has had one for a little while, but there’s been no activity because it was seen as too risky. The regulator last November, approved new regulations, and if they get it right there will be a lot of interest from the private sector. There are already a lot of interested project developers trying to keep track of what’s happening here, and things could move quickly with the right policy. But project announcements won’t go anywhere without the feed-in tariff or some other form of policy that the private sector can trust.
In the area of renewable energy, Nigeria has enormous potential resources but government and the private sector are not taking advantage of these. What do you think can be done to address the situation given our poor power supply situation?
Nigeria has had very little investment in clean energy so far, but finished 4th for Africa on Climatescope because it actually has some good conditions in place to attract investment into clean energy. Apart from the feed-in tariff, there is high demand for power obviously, as nearly everyone reading must experience the difficulties with the grid, or perhaps the lack of grid. Also, over the last few years, Nigeria has introduced reforms in the power sector that could open it up to new investment.
Another area that has big potential is off-grid solar and battery storage for people that don’t have grid power.
There are over 100 companies worldwide selling these commercially, and people without much money can buy solar home systems pay-as-you-go, often using their phones to make payments that are less than what they’d otherwise pay for kerosene, throwaway batteries, phone charging and the like. Ultimately, the economics of clean energy will mean there’s good business to be had, and this won’t have to rely on big power grids.
Is Bommberg New Energy Finance (BNEF) doing anything to encourage private investment in renewables outside of the fund, in terms of awareness programme on the potential of the sector? Also, can the private sector assess the fund?
BNEF provides expertise rather than financing, and Climatescope is a tool for investors, rather than a fund. The aim is to provide a lot of information to investors, businesses, government and other officials, as well as the general public – like your readers on what’s happening in clean energy in Nigeria. It scores the country’s investment attractiveness for clean energy and compares it to other countries in Africa and around the world. Check it out at www.global-climatescope.org
Based on BNEF intervention, it appears to be a one-size fits all. Is there a country specific programme for Nigeria for instance, given its socio political peculiarities?
We make a lot of information publicly available through Climatescope so people can understand the current situation and compare it to other countries. But you’re right that every country has its own characteristics: Nigeria is at a very interesting stage, after the reforms to its power sector, with its economic strength but vulnerability to oil price movements, and its substantial renewables resources.
Businesses and investors will study the details of the feed-in tariffs very carefully before moving forward, so the peculiarities are all important.
Are there programmes to encourage development of other renewables such as wind, coal etc?
Apart from the feed-in tariff, Nigeria has a range of policies – from renewable energy targets to soft loans to a biofuels blending mandate to encourage renewables. The problem is that many of them aren’t operational. So the government has a job to do to clarify to the private sector exactly how these things work and whether they’re in force yet, because at the moment there’s a lot of confusion.