About 43 per cent of Nigeria’s almost 200mn people lack access to grid electricity, especially in rural areas. Ifeoma Malo, chief executive of Clean Technology Hub, a renewable energy research institute, points to government regulations designed to encourage investment in solar mini-grids that can supply electricity to remote areas. “There has been a focus on getting electricity to rural communities,” says Malo. “And this is where a lot of investors in the solar mini-grid sector have come from and even a lot of renewable energy technologies. We’ve seen investment in wind too.”
Solar is regarded as a good entry point for would-be investors in renewables in Nigeria, since making electricity accessible, and affordable, remains a massive challenge. But Malo notes that local investors are not as active as their international counterparts because many worry that good returns will take too long to appear. The renewable energy sector, she says, needs “patient capital” that is willing to invest long-term in projects where profits may need more time to materialise. A further factor for investors to consider is the lack of security that pervades much of Nigeria, particularly in the north. Since most of the areas that require support are in rural, last-mile and northern communities, investors have been forced to pull their funds and contend with stranded assets in areas of high volatility.