The Problem Statement
The Renewable Energy Program was initiated by the Federal Ministry of Environment in fulfillment of the Federal Republic of Nigeria’s obligation to the United Nations Framework Convention on Climate Change (UNFCCC) and as part of African strategy on voluntary emission reduction. The main thrust of the Program is to ensure all sectors of the economy make a switch to cleaner sources of energy. The program has suffered series of setbacks in implementation as no concrete targets for renewables has been set, the Renewable Energy Master Plan (REMP) has yet to be signed off by the government or formulated into a law governing renewable energy development, there’s yet to be the evident implementation of the Renewable Energy Policy Guidelines (REPGs) and Renewable energy Action Program (REAP).
The Policy Solution
Nigeria has a commitment under the UNFCCC accord to make voluntary “non-binding” efforts to reduce atmospheric concentrations of greenhouse gases to mitigate the effects of climate change. In order to effectively administer this ratified instrument, the government has put in place certain structures and one of them is the Renewable Energy Program.
The main thrust of the Renewable Energy Program is to fulfill Nigeria’s obligation to the United Nations Framework Convention on Climate Change (UNFCCC), address the nation’s challenges of moving towards clean, reliable, secure, and competitive energy, develop and implement strategies/policies that would regulate the renewable energy sector as obtained in global best practices, and ensure that the renewable energy sector develops sustainably and profitably, partner with all the three tiers of Government, relevant government agencies, NGOs, FBOs, CBOs, as well as local and international investors, partner with Multilateral Agencies, national and international financial institutions, make sure the renewable energy sector is safe for investors and the renewable energy sector develops in line with global best practices.
NIGAC Constructive Position/Take
While we may have some signs of progress, the administrative challenges surrounding the implementation of the renewable energy projects and efforts of stakeholders must be addressed if we must achieve enviable milestones. For example, the cost of importing components and equipment required to develop renewable energy projects. With the current duty and VAT payable on solar equipment (10 percent) and the additional 20 percent payable on deep-cycle batteries required for energy storage, growth in the renewable energy sector currently valued at over US$50 million is significantly impeded as most of the projects are not bankable. However, there is currently a bill (the Zero Percent Import Duty for Renewable Energy Technologies Bill) before the National Assembly, sponsored by a member of the House of Representatives, that is aimed at establishing a special task force within the Nigeria Customs Service to allow for tax and duty exemptions on renewable energy technologies. This needs to be expedited. There is also a need for a tax credit for manufacturers or producers of renewable energy appliances and fixtures, and incentives for other renewable energy sources.