Nigeria’s economy will undergo a massive change over the next two decades as it transits to a low carbon status.
Sean Melbourne, Head of Climate Change & Energy, West Africa, British High Commission Abuja, who made the submission, states that the global shift to a low carbon economy will transform numerous sectors, including power, transport, construction, industry and agriculture.
“And as the biggest economy in Africa and by far its most populous, the low carbon market opportunities in Nigeria are significant. Nigeria’s economy is expected to undergo massive change over the next two decades,” submits Melbourne while speaking as a guest at the FMDQ Nigerian Capital Markets Conference in Lagos on Thursday, November 7, 2019.
He called on the authorities to utilise the “crucial opportunity” to act now to achieve low carbon resilient growth and avoid carbon lock-in. According to him, Nigeria’s estimated climate-smart investment potential is over $104 billion through to 2030 in several sectors.
His words: “The most obvious opportunity is perhaps in the renewables sphere but there are many others too. Access to energy is key to promoting inclusive economic development, poverty alleviation, social equity, and advances in health and education. Off-grid renewables offer the most cost-effective solution to bring energy to people who are not yet connected to the grid. As such these technologies can contribute significantly to building climate resilience in poor rural and urban areas.
“There’s tremendous potential e.g. to scale-up solar power within the country. DFID’s Solar Nigeria Programme started in 2014 when people doubted the viability of solar in Nigeria. Five years on the programme will end as not only have at least three million people gained access to solar power directly funded by DFID but it has clearly demonstrated the viability and feasibility of solar in Nigeria.”
Solar, Melbourne adds, is now viable for the public sector as well as for commercial and industrial operations and household use, pointing out that FID programme has also leveraged £11 million of commercial investment so far.
“We believe this success has inspired other donors to step in: the EU is providing €38 million for public sector solar projects, $350 million will come in from the World Bank, and another $200 million will be provided by the African Development Bank,” he stresses.
Melbourne says: “Nigeria is endowed with renewables potential other than solar, including biomass and small-scale hydro. There’s also wind and geo-thermal potential in some parts of the country. And then there’s waste. A UK company, West Africa ENRG, operating here in Lagos, has exciting plans to turn their successful recycling business into a waste to energy business.
“Nor should we neglect the role greater energy efficiency can play in reducing the cost of energy to commercial entities and consumers whilst reducing greenhouse gas emissions.
“Nigeria’s financial sector is ahead of the curve in many respects: Nigeria was the first African country to issue sovereign green bonds, back in December 2017, and several Nigerian companies have since launched corporate green bonds.
“DFID has also supported Konexa, an energy company of the future, which is building a commercial and industrial scale hybrid energy captive power agri-processing zone in Kaduna State using solar, hydro and gas. It uses the newly permitted franchising model and can charge cost-reflective tariffs that make sense because there is reliability and the cost is less than diesel.”