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Nigeria’s 17.5% lending rate threatens renewable energy investment

Admin
Thursday, 11 October 2018

The lending rates in Nigeria, which stands at 17.5 per cent, is a major threat to growth in renewable energy investment in the country.
The Lagos-based financial advisory company, Financial Derivatives Limited, which declared this in its latest economic report, advised the federal government to incentivise the private sector in investing in renewable energy through cheaper financing and lower taxes.
The company stressed that who require capital to start up businesses such as in renewable energy. The report noted that countries such as China, United States and India, which are leading the renewable energy revolution, offer substantially lower rates.
According to the report, the average commercial bank lending rate in India, for example, was about 9.45 per cent per annum. In the US and China, the rates are at an average of 4.3 per cent per annum, the report revealed.
The report also noted that Nigeria’s installed electricity capacity is 12,522 megawatts (MW), well below the current demand of 98,000MW.
“Nigeria’s total electricity mix is largely dominated by non-renewable energy despite a vast potential in renewable sources,” it stated.
According to the report, its exploration and adoption through private investments, offer a probable solution to the power challenges in the country.
The report added that attracting private sector investment into this area demands business-friendly measures such as lower interest and tax rates.
Meanwhile, a Chinese firm, Shenzhen Kang Ming Sheng Technology Industry Incorporation, has disclosed plans to invest in the building of a renewable and clean energy manufacturing plant in Nigeria to help address the epileptic power situation in the country.
Marketing Manager of Kamisafe Innovative, Mr. Goodluck Mbam, who revealed the plan added that the plant, which is a medium to long term plan, would support its products deployment in Nigeria and other countries in Africa.
Mbam maintained that the plant nwoul produce affordable solar panels, solar streetlights, energy-saving bulbs, rechargeable lamps and fans among other clean energy products, and it would also help promote clean and renewable energy usage in Nigeria.

About IWIN

The Independent Energy Watch Initiative (I-WIN), an enterprise of Energy ConServ and the Roundtable for the Growth and Development of Power (RODEP), is an online/web based power sector portal that strives to engage stakeholders and the Nigerian public on topical issues in the power sector.

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