Ask any business operating in Nigeria what their biggest operational cost is and they’ll tell you that making adequate provisions to ensure uninterrupted electricity supply frequently costs them more than or just as much as their payrolls.
This, coupled with corruption, social and political stability and poor transparency are the reasons investors and prospective global businesses approach the Nigerian market with reluctance, while many others dare not even dip their toes in the water.
But the continent’s largest economy is poised to attract more foreign direct investment as the Nigerian federal government and Delta State government have signed an agreement with well-respected renewable energy leaders SkyPower Global and its partner FAS Energy to build 3000 megawatts of solar power around Nigeria.
The agreement, officially signed at the World Economic Forum on Africa held in the capital of Abuja, Nigeria last week, demonstrates the African powerhouse’s commitment to renewable energy.
The massive project will cost around $5 billion (R51,7 billion) and is said to be financed through a combination of bank debt, development bank financing and equity partners. The solar power projects (unity-scale solar photovoltaic) will be rolled out over the next five years with the first phase of solar power expected to be reach commercial operation in 2015.