₦11.4tr funding gap threatens energy transition plan in Nigeria

Barely a week after the Federal Government unveiled the National Integrated Electricity Policy (NIEP) and Integrated Resources Plan (NIRP) to accelerate energy transition goals, it has emerged that Nigeria’s energy transition policy is facing a serious funding gap to the tune of N11.4 trillion.

To combat this financial threat, stakeholders, including the leadership of the National Assembly and the United Nations Industrial Development Organization (UNIDO), have called for concerted efforts to engage the private sector for meaningful collaboration that attracts the needed investment.

The Development Bank of Nigeria (DBN), through its head of strategy and policies, Jeremy Dan-Okayi, at a consultative session in Abuja, reviewed funding opportunities for industrial development as contained in the energy transition plan and submitted that no less than an N11.4 trillion funding gap is a real challenge.

The federal government had designed the plan to tackle the dual crises of energy poverty and climate change and deliver SDG7 by 2030 and net zero by 2060, while also providing energy for development, industrialization, and economic growth.

It was anticipated that Nigeria’s energy problems, largely caused by an overreliance on costly fossil fuels, could be eased by embracing renewable energy solutions.

The consultative session, which was convened by UNIDO for the Parliamentarians for Climate Finance project, exposed the fact that integrating renewable energy into the grid could reduce dependence on fossil fuels and improve access to electricity nationwide at the lowest cost possible.

The leadership of the National Assembly, represented by chairmen of relevant committees, said it was time to be more pragmatic in seeking ways to reduce the financial threats to Nigeria’s energy transition policies and programs, particularly regarding promoting industrial growth and boosting investment opportunities.

The project is being implemented in 15 African countries with the objective of driving green investment and climate action across Africa.

Issues of concern at the session included Nigeria’s current green energy investment landscape—successes and challenges; policy reforms to enhance investor confidence; financing models and legislative actions to unlock investment opportunities for green energy zones; as well as securing an enabling environment to attract and secure private sector participation in green energy zone development.

Chairman of the House of Representatives Committee on Climate Change and Security, Osi Kama Nkemkanma, in a remark, noted that the National Assembly is committed to ensuring that the private sector is properly encouraged to invest in the green energy policy.

According to him, harnessing renewable energy solutions requires greater commitment from the private sector.

Providing the legislative framework for the Climate Finance Project is another area the National Assembly is working on at the moment.

The chairman of the House of Representatives Committee on Environment disclosed at the session that the Environmental Impact Assessment law is being updated to help address current challenges.

“Some reforms are also being processed to reduce firewood consumption. Ninety percent of Nigerians still use firewood,” he disclosed.

UNIDO is the specialised agency of the United Nations that promotes industrial development for poverty reduction, inclusive globalization, and environmental sustainability