Communique At The End Of A 2-Day Conference By Renewable Energy Association Of Nigeria (REAN)

With support from Heinrich Boll Foundation and All On, REAN hosted its annual 2023 conference from 21st to 22nd November 2023. The 2-day hybrid Renewable Energy Conference took place at Bon Hotel Elvis in Abuja aimed at identifying strategies and consumer financing models to ease renewable energy (RE) adoption for SMEs and low-income electricity consumers. It was a hybrid event thus there were in-person and online participants in attendance. The theme of the conference was “Transforming Energy Finance: Bridging Gaps and Building Opportunities.”

The conference had a total number of 208 participants. The participants included a wide array of renewable energy stakeholders and delegates from government offices; the private sector, development partners, sector associations and REAN member companies. With representatives from the National Council on Climate Change (NCCC), Rural Electrification Agency (REA), Federal House of Representatives Committee on Renewable Energy, REA-World Bank Nigeria Electrification Project (NEP), Bank of Industry (BOI), Ceesolar Energy, Solar Sister, Sterling Bank, FCMB, Consistent Energy, REEEA-Alliance, CESEL, All On, Oando Clean Energy, Clean Technology Hub, FSDH Merchant Bank, Nigeria Sovereign Investment Authority (NSIA), Westa Solar,

Arnergy, the National Associations of Hair and Beauty Practitioners of Nigeria (NAHBPON), CSOs, media and among others. The conference proved to be a vital platform that united key stakeholders, investors, experts, and enthusiasts in the renewable energy sector.
OBJECTIVES

The overarching objective of the conference was to explore strategies that will foster increased adoption of renewable energy solutions. Specific focus areas included effective consumer finance, investment support, and collaboration among stakeholders. The conference aimed to address challenges, share best practices, and lay the groundwork for actionable initiatives to propel Nigeria’s renewable energy sector forward. More specifically, the objectives of this conference were:

1. To deliberate and explore ways to accelerate the access of RE adoption for Nigerian SMEs and citizens.

2. To inspire and challenge RE experts and local financial institutions to develop financial products to help consumers easily transition from fossil generators to renewables.

3. To explore and identify strategies that will enable the increased adoption of renewable energy solutions through effective consumer finance, investment support, and stakeholder collaboration.

4. To match REAN members with local and international investors to secure partnerships and funding for pipeline projects leading to successful implementation, business growth, increased RE development and sector growth.

KEY OBESRVATIONS

Based on the speeches, presentations and discussions during the conference, the following are the key observations:
1. Energy plays a vital role in the economic growth, progress, and development, as well as poverty eradication and security of any nation. Uninterrupted energy supply is a vital issue for all countries today and future economic growth crucially depends on the long-term availability of energy from sources that are clean, affordable, and reliable.

2. Access to energy has been an enormous challenge in Nigeria. Up to 60% to 70% of the Nigerian population does not have access to electricity. There is no doubt that the present power crisis in Nigeria will persist unless the country diversifies its energy sources for domestic, commercial, and industrial uses, and adopts clean, reliable and sustainable sources of energy to meet the demands of its growing population.

3. By 2050, Nigeria is projected by the World Bank to become the third most populous country globally having up to 400 million people or more. Being one of Africa’s primary sources of greenhouse gas emissions and also highly susceptible to the consequences of climate change, Nigeria’s transition to clean energy sources will significantly create positive environmental impact for Africa.
4. While renewable energy stands as a viable solution to our energy deficit, Nigeria’s renewable energy sector is still confronted with various challenges and barriers that impede its growth and the uptake of

renewable energy by SMEs and citizens in general. These challenges centre around lack of access to FOREX, high tarriffs and import duties, taxation, lack of favourable policies and fiscal incentives, and difficulties in accessing finance despite the capital-intensive nature of RE businesses.
5. The availability of RE technologies in any business goes a long way to improve and increase productivity and profit levels. A few SMEs in Nigeria which have been able to adopt renewable energy (especially solar units/systems) have attested that it has significantly helped them by reducing production costs, saving time, increasing their productivity and their profits. However, due to the high costs of purchasing RE technologies, many consumers, including SMEs are unable to adopt RE for their domestic and business needs. Ms requires improved affordability, concessional financing for emergent players, and an enabling policy and regulatory environment for renewable energy, in order to push down final consumer costs.

6. Solar alternatives to petrol generators exist in Nigeria but are currently 15-20 times more expensive. These solar systems are not available at scale to a vast majority of citizens who live in poverty, and cannot meet up with the upfront cost of renewable energy solutions like solar rooftop systems. Therefore, accelrating the switch to solar syst
7. The conference underscored the commitment of the Nigerian government to supporting the renewable energy sector. Hon. Afam Victor Ogene, Chairman of the House of Representatives Committee on Renewable Energy, highlighted the global shift towards greener, safer, and sustainable energy solutions. He acknowledged the financial challenges faced by the sector and emphasized the need for accessible financing options. This commitment of the Nigerian government to support the renewable energy sector, as highlighted by Hon. Afam Victor Ogene, is a crucial foundation for sectoral growth.

8. The Nigerian government is now keen on renewable energy as this is the first time since its inception in 1999, that the government would set up a committee on renewable energy within the House of Representatives.
9. The government admits that with the fast dwindling global fossil fuel reserve and the increasing danger associated with it, especially with regard to its negative environmental impact and contribution to climate change, renewable energy is the future and Nigeria must step up and be more intentional in investing in the RE sector.

10. The government now knows that with the diverse renewable energy resources available in Nigeria, if the right enabling technologies are developed and funded, renewable energy has the potential to bridge the energy gap in Nigeria.

11. The Nigeria Sovereign Investment Authority (NSIA) has launched a $500m Renewables Investment Platform for Limitless Energy (RIPLE). The pilot for this initiative is located within the Tokarawa Industrial Hub in Kano state and it involves setting up a generation and distribution system to meet 70 MW of un- suppressed energy demands of industrial activities, commercial enterprises, and residential customers in an area covering about 9,000 connections.
12. Mr. Abba Aliyu’s presentation shed light on the Rural Electrification Agency’s achievements over the past five years. It highlighted how energy access has been improving lives and communities, especially in

rural areas. The REA’s deployment of mini-grids and Solar Home Systems demonstrates tangible progress in easing RE adoption for consumers. The deployment of over 100 mini-grids and more than 1.5 million Solar Home System (SHS) connections demonstrated tangible progress in addressing the energy gap across the nation.
13. Mr. Abba Aliyu’s announcement of the $750 million Distributed Access through Renewable Energy Scale-Up (DARES) project and the engagement with international financiers exemplified strategic shifts and funding opportunities that can significantly impact the RE sector and lead to improved energy access for citizens. This ambitious project, along with engagement with international financiers, showcases opportunities for significant funding for RE developers and strategic partnerships leading to improved ease of RE adoption.

14. Insights shared by financial institutions, Bank of Industry and Sterling Bank, provided a clear understanding of interest rates, funding options, and financial services tailored for renewable energy projects. The banks are willing to work with RE developers to ease the adoption of renewable energy for SMEs and consumers.
15. Nigeria’s new government is open to doing its best to seek sustainable solutions, to create an enabling environment for renewable energy to thrive. The House of Rep. Committee on Renewable Energy commits to being purposeful in formulating appropriate legislation and legal framework that will support the development drive for renewable energy.

16. The panel discussion assessed Nigeria’s current RE financial landscape, addressed gender-specific barriers, explored innovative consumer financing models, and examined the role of government agencies and cooperatives/associations in overcoming barriers to renewable energy adoption.

17. From the panel discussion, Solar Sister acknowledged that women-led SMEs in renewable energy face various challenges in accessing funding such as low awareness of available funding, the existence of unattainable requirements for available funding, and lack of hand-holding to build these women and assist with their applications.
18. Sterling Bank explained that the cash flow of SMEs is one important factor to consider when addressing their access to renewable energy. The cost of acquisition of assets has gone up while purchasing power is going down. Therefore, there is the need to explore the RE market in a different way. It is important to study consumer behaviour in addressing existing challenges and design our solutions around the existing challenges.

19. The National Association of Hair and Beauty Practitioners of Nigeria (NAHBPON) which has 5 million existing members and 16 million potential members across Nigeria, confirmed that power supply has always been a main challenge for business owners/SMEs in their association. The association has been seeking help from government agencies to address their energy needs but to no avail.
20. NAHBPON revealed that women and youth make up the largest population percentage among hair and beauty practitioners in Nigeria because most barbers, hairdressers, beauticians, spa owners, make-up artists are predominantly women and youths. Therefore, it is important that they are empowered by ensuring that their energy need are met.

21. Due to the unreliability of grid electricity in Nigeria and high cost of petrol and diesel to power generators, NAHBPON leadership and its members are willing to work with other stakeholders to meet their energy and business needs and ultimately the needs of their customers – the masses. They are also willing to support the successful deployment of solutions and financing options for their members. It was agreed that a pilot of 1000 NAHBPON members would be executed first to test for outcomes before reaching for a larger number.

22. SMEs and consumers agreed that the up-front costs for adopting renewable energy are still too high therefore it would be helpful to have partners who are willing to take up the upfront costs thereby easing RE adoption for them.

23. The government and stakeholders at the conference commended REAN and acknowledging its advocacy efforts and appreciating the association for always bringing together stakeholders to deliberate on solutions and strategies to advance Nigeria’s RE sector and to accelerate Nigeria’s energy transition.

Group Photograph on Day 2 of the 2023 REAN Conference

KEY RECOMMENDATIONS

1. There should be continued advocacy for supportive policies and incentives to encourage further investment in renewable energy projects. This includes engaging with policymakers to create an environment conducive to the growth of the sector.

2. To address the evolving landscape of the renewable energy sector, it was recommended that capacity- building initiatives be prioritized. This involves equipping stakeholders with the necessary skills and knowledge for effective participation, as highlighted by various speakers during the conference.

3. There should be more public-private partnerships i.e collaborative efforts between the government, private sector, and NGOs to leverage resources and expertise for the implementation of renewable energy projects, and to collectively address challenges.
4. Another key recommendation was on the integration of innovative technologies, particularly artificial intelligence (AI), into renewable energy systems. This can enhance the efficiency and effectiveness of solutions, making them more adaptable to evolving energy needs.

5. Recognizing the significance of tailoring renewable energy solutions to local contexts, there was a recommendation to foster increased engagement with local communities. This ensures that projects meet specific needs and are culturally and socially acceptable.

6. The government and development partners should continue to provide support for initiatives like RIPLE and replicate successful models in other regions, ensuring a broader reach.
7. Stakeholders should work towards the establishment of a consortium for consumer finance, involving financial institutions, industry associations, and governmental bodies to streamline funding access.

8. A knowledge-sharing platform should also be created to disseminate successful financing models and strategies, fostering collaboration and learning.

9. A monitoring and evaluation framework should be developed to track the implementation of stakeholders’ commitments made towards easing RE adoption, ensuring accountability.

10. REAN in partnership with relevant stakeholders could organize workshops to educate potential grant applicants on effective application strategies, enhancing the success rate of applications.
11. There is need for purpose-driven and intentional investment in renewable energy in Nigeria by both government and private sector players, in order to actualize meaningful impact. In as much as we desire to have cleaner energy sources, we cannot wish away the huge financial implications of the transition to sustainable and renewable energy.

NEXT STEPS

1. REAN should continue the momentum generated during the conference by fostering ongoing engagement and collaboration among stakeholders. This includes sustained efforts to implement the recommendations and leverage the collective expertise within the sector.

2. REAN should undertake more policy advocacy initiatives to promote a conducive regulatory environment for the renewable energy sector. This involves continued dialogue with policymakers to address regulatory barriers and create an enabling environment for the RE sector.
3. The commitment to providing 1000 solar units for members of the National Association of Hair and Beauty Practitioners of Nigeria (NAHBPON) requires a structured and inclusive roll-out plan. REAN should work towards collaborating with NAHBPON and other stakeholders to ensure a transparent vetting process and a successful distribution of solar units across states.

4. REAN should implement a robust monitoring and evaluation framework to track the progress of commitments made during the conference and investment matches.

CONCLUSION

In conclusion, the REAN Conference marked a significant milestone in advancing the renewable energy agenda in Nigeria. The shared commitment, insightful discussions, and actionable outcomes from the conference position the sector for sustained growth. REAN expresses its gratitude to all participants, sponsors, partners, and speakers for their invaluable contributions. The association looks forward to continued collaboration and collective efforts toward realizing a sustainable and accessible renewable energy future for Nigeria.