- The Nation
The efforts by the Federal Government’s at boosting renewable energy in Nigeria may have been stalled as banks vow not to provide facilities to the operators, The Nation learnt.
It was gathered that banks are turning down offers for credit from companies that are providing renewable energies such as solar, biomass and the wind, because of the fact that they are not strong enough financially to meet their debt obligations.
A Chief Executive Officer of one of the new generation banks, who spoke on condition of anonymity, said banks have concluded plans not to extend credits to operators in the renewable energy sub-sector of the nation’s electricity industry, due to their weak position.
He said: “Renewable energy operators require a far smaller facility of let says between N50million and N70million at most. When you give them such loans at interest rate of between 22 per cent and 24 per cent, they find it difficult to repay the loans.”
According to him, renewable energies operators are not high-net-worth people that can be trusted with huge credit.
Also, a special assistant on renewable energy to the former Minister of Power, Prof Chinedu Nebo, Dr Hurbert Okorodu,said it is difficult getting money to finance the operation of the power sector.
He said operators in the renewable energy sub-sector are hard hit since they could not gather enough financial supports for operation.
He said, “From my interactions with many financial institutions in Nigeria, firms that are offering renewable energy services are handicapped financially. They do not have enough money at their disposal because banks do not give them facility.’’
He said the scourge of the nation’s electricity challenge is funding, stressing that the sector is starved of funds by successive administrations in the country.
The Federal Government advocated for a concept known as energy mix, in order to boost generation and supply of electricity in Nigeria. Through energy mix, the government is exploring opportunities in the Off-grid and On-grid system to improve power supply and the economy.