Nigeria's short-term plan for an additional 500 MW of solar PV by 2015 appear to be on track after the European Investment Bank (EIB), the Global Environment Facility, the African Development Bank and European Bank for Reconstruction Development confirmed a partnership with the Climate Investment Funds (CIF) for renewable energy investments in Nigeria between June and July.
CIF has already confirmed approval of $25 million to the African Development Bank for the development of Nigerias solar PV plan. The funding is part of the $50 million CIF has approved for Nigeria for the promotion of renewable energy.
The CIF funding approval comes barely months after Nigeria's "Transformation Agenda" strategy was credited for attracting an international renewable developer, SkyPower FAS, which has signed a $5 billion deal with the Federal government and the Delta State government for the development of 3,000 MW of solar PV over the next five years.
The utility-scale solar photovoltaic projects, to be developed by SkyPower FAS Energy, fall within the countrys Transformation Agenda blueprint, which is a $12 billion power sector strategy to increase generation, transmission and distribution of renewable energy.
It includes policy changes such as the creation of a deregulated and competitive electric power sector as evidenced by the recent creation of Nigerian Bulk Electricity Trading Plc, which will be the off-taker of all generated renewable energy and will sign power purchase agreements (PPAs) with independent power producers with support of credit letters from the government.
The strategy has been developed to meet the anticipated growth in Nigeria's GDP from 6.2% last year to 7.4%, which the government says could raise demand for clean energy sources and pressure on existing energy infrastructure.
SkyPower FAS Energy is a joint venture between Canada's global developer and owner of solar projects, SkyPower Global, and Saudi Arabias Fawaz Alhokair Group subsidiary, FAS Energy.
"The signing of these landmark agreements demonstrates the shared vision of a partnership that will further stimulate the vibrant, fast-growing Nigerian economy and substantially impact the state and country's GDPs, resulting in increased employment and skills training," president and chief executive officer of SkyPower Global Kerry Adler said.
According to SkyPower Global chief financial officer Stephen Bordes, funding for the project will "be financed through a combination of bank debt, development bank financing, and equity partners," with an estimated 30,000 jobs set to be created during and after the projects construction.
Nigeria, where current solar PV installed capacity is just 0.15 MW, the largest installation being the 7.2 kW village electrification project at Kwalkwalawa in Sokoto State, says current total energy demand is projected to hit between 6,390 MW and 10,800 MW by 2020 against supply capacity of between 3,600 MW and 4,000 MW.
Apart from the Feed-in-Tariffs unveiled in 2012, several catalysts exist for the growth of Nigeria's solar PV sector, including the prioritization of the renewable power sector, the high economic growth expected, the widening supply-demand gap for clean energy and rapid decline of the solar PV technology globally.
Nigeria is one of the six African countries to benefit from the U.S.-led initiative, Power Africa, which is a new five-year American presidential initiative launched by President Barack Obama last year to increase power generation in Africa by an additional 10,000 MW "of cleaner, more efficient electricity generation capacity."