The Bank of Industry (BOI), United Nation Development Programme (UNDP), and Nigerian Export - Import Bank (NEXIM) have requested financial institutions to support the development of new renewable energy projects.
At a one-day seminar organised in Lagos, various banks and financial organisations were asked to support and fund the schemes. The seminar was ran by the Access to Renewable Energy project, and discussed the gains institutions could receive by involving themselves in such schemes.
The Access to Renewable Energy Project is a partnership between BOI and UNDP. It has been labelled as a support structure for micro, small and medium enterprise development, in relation to the UN’s commitment to ensure 'universal access to modern energy services'. Over $4.8m has been reserved to finance renewable energy project in the country, in an attempt to ensure power supply issues in Nigeria are resolved in the future.
When the project first launched last year, the UNDP Resident Representative, Mr. Daouda Toure, explained the economic consequences of continual power supply failures:
"With the vast energy resources potential in Nigeria, it remains a concern that for most needs, the country has to rely on back-up generators with high environmental and economic cost to operate. The Central Bank estimated that N1.56trillion ($13.35bn) is used to fuel these generators annually."
The meeting attempted to persuade organisations that financial gain could be achieved in schemes other than short-term product importation. By supporting renewable energy projects, apart from helping to solve the serious issue of dwindling natural resources, they could gain from investing in less risky alternative, long-term solutions.
It has been suggested that investors are not considering the renewable energy sector as an investable area due to misconceptions and a lack of solid understanding concerning the potential of the industry. Currently, only Access, Zenith, Oceanic and Skye Banks have invested within the sector -- although claims exist that the investment in itself is marginal.
In Nigeria, the majority of the general public currently live on less than $2 per day, and have recently been hit with fuel price increases. It is possible that an increase in renewable energy projects may help lessen this burden, and boost a struggling economy.
The project manager of the Access to Renewable Energy Project, Segun Adaju, noted that the only way to build and expand upon a 'green' industry and economy is for financial institutions to assist in kick-starting the schemes:
"To have a green economy, Nigeria should have a green banking sector that would finance renewable energy but not to throw money away."
As part of its contribution to the power supply issue and need to wean the economy off fossil fuels, NEXIM stated it has released loans totaling $695 million to help develop renewable energy projects in the country.
It is reported that BOI, UNDP and NEXIM are willing to consider any bank or finance institution that demonstrates interest in these projects.
Photo credit: Flickr
This post was originally published on Smartplanet.com