$1.9tr needed to fund Nigeria's energy transition

Between now and 2060, Nigeria requires $1.9trillion for funding its energy transition plan (ETP).

Vice President Yemi Osinbajo broke the news yesterday at the International Energy Transition Week-Nigeria, held in Abuja.

The event was the 7th Edition of the ECOWAS Sustainable Energy Forum (ESEF) organised by the ECOWAS Centre for Renewable Energy and Energy Efficiency (ECREEE).

The Minister of Power, Engr. Abubakar Aliyu, who represented him said the cash does not include usual spending because the country needs to mobilize additional $10billion yearly.

“For the sake of emphasis, it is relevant to note that Nigeria’s Energy Transition Plan (ETP) would require funding of about USD1.9 trillion up to 2060,” he said.

He added that $410 billion of this amount is above usual spending and implies that we need to mobilise an additional USD10 billion per annum.”

Osinbajo noted that the success of universal energy access and carbon neutrality is dependent on effectiveness in crowding in these investments.

He revealed that the Federal Government has planned to roll out a set of policy measures that would attract financing and investments of up to $10 billion and create scalability of programmes of over $30 billion over the coming decades.

The Vice President said these policy measures and programmes would be leveraged, to catalyse the Nigeria ETP specifically on renewable power.

Earlier, he insisted that Nigerians must work together on strategies and reforms needed to crowd in the investments required for real and impactful projects and progress on the ground.

Lack of access to finance, according to him, remains the biggest challenge for accelerating action on energy access and climate goals in Africa.

He said only two per cent, about $60 billion, of the $2.8 trillion invested in renewable energy from 2000 to 2020 came to Africa.

The Vice President lamented that West African region received just per cent of that, about $4 billion.

He insisted that “To reach our goals, sufficient capital must be made available in the Region, and we must do our part in creating the enabling environment for these funds.”

Osinbajo, who informed the international community on Nigeria’s efforts at renewable energy development, disclosed that the country has upgraded its mini-grid regulation to increase the cap for licensing from one megawatt (Mw) to 5Mw.


He also noted that Nigeria is developing the policy for integration of Utility Scale Solar into the grid, with a requirement for 10% of on-grid power to come from solar by 2025.

The Vice President added that the Federal Government is creating a Solar Stabilization Fund with target of $100 million to backstop on-grid solar contracts.

According to him, the Federal Government is completing scalable, private sector-driven Renewable Energy Distribution Franchise pilots (all at Financial Close) including Konexca Distribution model $90 million with the Kaduna Distribution Company (DisCo), Maiduguri Solar Power Island – $40 million, and the Kano Interconnected Minigrid – 100Mw pilot project.

He added that the Federal Government is securing $1.5 billion in additional financing through the World Bank to expand the Nigerian Electrification Program and stabilize the on-grid sector through modernizing operations of our grid and further preparing the grid for renewables.

Osinbajo said Nigeria is developing innovative data tools such as the Integrated Energy Planning Tool designed in partnership with Sustainable Energy for All (SEforALL) and the SE4All Central Data Management System (CDMS) Web portal (nigeriase4all.gov.ng).