Nigeria’s Solar Projects Struggle to Power the Country

07:03 July 7, 2024

Nigeria’s Solar Projects Struggle to Power the Country

About half of Nigeria’s 200 million people cannot get enough electricity from the country’s electrical grid.

Many poor, rural communities have no electrical service at all.

Nigeria has a lot of sunny weather and solar energy appears to be a good way of producing electricity there. But Nigeria has had problems getting solar projects completed.

Experts have produced studies that say Nigeria could generate more electricity than it needs from solar energy centers. But 14 large solar projects in the northern and central parts of the country have not gone forward since contracts were signed in 2016. The projects reportedly could produce 1,125 megawatts of electricity if completed.

Supporters of solar energy in Nigeria blame high interest rates, which can be as high as 15 percent. The International Energy Agency says that is much higher than in developed economies and China. Borrowing costs increase total costs for solar companies working in Nigeria.

Other countries in Africa have also been slow to develop solar energy. Africa has one-fifth of the solar energy capacity of Germany. Just two percent of so-called clean energy investment goes to Africa.

Najim Animashaun is director of Nova Power, one of Nigeria’s stalled solar projects. He said, “[If] the same project [is] put in Nigeria and Denmark; the Danish project will get funding for [a] 2 to 3 percent [interest rate].” He said his project struggles to get loans at interest rates of 10 percent or higher. He said this is the case although his “solar project can produce two- and [one]-half times more power…”

Price and cost

Nigeria does not set electricity prices that are high enough to recover the cost of generation. As a result, companies that distribute power cannot pay producers enough to cover the cost of generation. The power production industry depends on the government to supply the difference. This situation worries lenders.

Current estimates say the government owes power producers $2.7 billion. This situation makes it difficult to get loans. Some have suggested that the World Bank should guarantee loans for solar projects. But Nigeria’s government does not want to face possible large payments if electricity projects fail.

Edu Okeke is the managing director of Azura Power, which is involved in a stalled 100-megawatt solar project in Nigeria’s northern Katsina State. He said without a World Bank guarantee, “…nobody will develop or finance a project with a government subsidy…” because it can disappear.

Electricity in Nigerian communities

The lack of electricity has real effects in places like Excellent Moral School in the city of Ibadan. The school has no electricity. Founder Muyideen Raji said, “The entire community is not connected, including the school.” Raji said the lack of power means students “…can’t learn how to use computers or the internet and can’t study in the evenings.”

Places that are connected to the grid often experience power outages. So they use power generators that run on diesel fuel. Last year, the government removed oil subsidies. Fuel prices went up.

The head of Lorat Nursery and Primary School in Ibadan, Abdulhakeem Adedoja, said the school stopped using its diesel generator because of the cost. He said the school can go for two weeks without power although it is connected to the grid. Adedoja added that students cannot complete their assignments at home.

Businesses are limited by the energy deficit too. Ebunola Akinwale owns Nature’s Treat Café in Ibadan. She said she pays $1,700 per month to operate emergency generators for her four stores. “If nothing changes, I probably would have to close one or two branches,” she said.

A working grid ‘cheaper and cleaner’

The government says that, if Nigerians paid full price for electricity, foreign investment would come in. However, labor groups recently went on strike to protest the price increases.

Businesspeople like Akinwale support the government’s position. She said electricity from the grid is “cheaper and cleaner” than her diesel generators.

But former regulatory chief Sam Amadi doubts that Nigerians “can today pay for energy consumed without subsidy.” He thinks the government should offer tax reductions, payment plans and support for private solar projects. Until then, he warned electricity outages will remain common.

I’m Mario Ritter, Jr.

And I'm Jill Robbins.

Google Play VOA Learning English - Digdok