Energy stakeholders have condemned the rate at which Nigeria and other Africa countries are offered renewable energy funding by international lenders.
They said that a 700% rate which far higher than what is obtainable on the other World’s continents could be discouraging, thereby, prevents meaningful growth and development in the sector.
In Nigeria for example, the renewable energy is said to be suffering funding neglect whereas gas seems to be getting all the funding attention as if gas were the last bus stop to renewable energy programme.
These concerns came to the fore at a policy dialogue held last week in Abuja to review sustainable transition strategies.
The policy dialogue looked at how to balance gas and renewables pathways in Nigeria’s transition strategy’, was organised by the Natural Resource Governance Institute (NRGI) in collaboration with the African Initiative for Transparency, Accountability, and Responsible Leadership (AFRITAL).
The marginalization of Africa was noted in a presentation by Aaron Sayne, who said, it was very worrisome that lenders charge African countries and companies up to 700% of what they charge Europe or North America.
The expert said: “Investors are willing to support renewable finance, yet Africa only has 3% of the total expended the world over, with South Africa, Morocco, Kenya, Ethiopia, and Senegal dominating the market.
“The result is that Africa has at least 40% of the world’s solar potential but with less than 2% of all solar panels.”
Louis Ogbeifun, Executive Director, AFRITAL, who set up the context, highlighted expectations, articulated aspirations and implored all stakeholders to take critical action.
Ogbeifun highlighted the government’s ambitious plans to achieve carbon neutrality and energy transition, driven by initiatives like the Nigeria Gas Commercialization Programme (NGCFP) and the Energy Transition Plan (ETP).
He pointed out that Africa had enjoyed only 3% of investments that could drive the energy transition.
He added that despite having 40% of global solar energy potential, Africa generates only 1% of global power, signifying a dearth of investments.
“Nigeria has great renewable energy potential but needs to prioritize and right-size its energy frameworks.” He feared conflict of investment funding between gas and renewable energy projects”, he noted.
He pointed at areas of disadvantage for Nigeria and called for focus between now and 2060, and urged all players to prioritise synergy to achieve the objectives of the energy mix. He commended NRGI for driving efforts toward deepening synergies.
The policy dialogue recommended that Nigeria’s energy policy strategy must make gas a mere bus stop with renewable energy as the real station.
Part of the eight-point recommendations is that renewable and gas policies should be framed under a unified energy strategy that transitions gas as a “bridge fuel” while accelerating renewable energy deployment.
The analysis said the focus on gas funding was said to create the risk overshadowing renewable energy initiatives, especially in resource-constrained scenarios.
The experts recommended that the policies aimed at market liberalisation, energy access, and emissions reduction should exhibit strategic alignment.
It also recommended what it called ‘environmental trade-offs, saying, “While gas policies reduce flaring and emissions, their long-term reliance risks conflict with renewable-specific environmental objectives. Integrating life-cycle emissions assessments into planning could resolve such disputes.”
The group also recommended investment synergies by creating hybrid energy programmes that integrate gas and renewables such as solar-powered gas processing facilities or gas-grid-supported mini-grids which can enhance complementarity.
