Nigeria prepares for solar revolution, as massive investments flow into construction of new power plants.
Nigeria has the biggest economy in Africa, having surpassed South Africa in 2014, and the 20th biggest in the world. Its population is also the biggest in Africa, this includes one of the world’s largest youth populations, with over 42% under the age of 14. The World Bank considers Nigeria as not only an emerging market in Africa but also an emerging global power.
Nigeria has abundant natural resources and is also home to Africa’s second largest stock exchange. It has had great potential for economic success for many years however corruption and military rule has prevented this. Recent economic reforms and the rebuilding of democracy have however very successfully ensured Nigeria are now back on track.
Despite their current economic success, a number of problems including the sabotage of gas and oil pipelines and a continuing population explosion are putting the country’s infrastructure under huge pressure, in fact their power grid collapsed 21 times in the 1st half of 2016, compared to just 14 times in the whole of 2015.
Solar power is a growing industry in Africa however to date Nigeria has been without a utility-scale power plant. This is all about to change following the signing of an agreement between the Federal government of Nigeria and Pan Africa Solar to invest over US$146 million in the construction of the country’s first utility-scale power project.
It is forecasted that the construction will take only 12 months and that on completion the 75 megawatts power plant in Katsina State, will provide electricity to 1.1 million people in Nigeria making it the second biggest plant of its type in sub-Saharan Africa.
Further investments planned
Pan Africa Solar believes this is just the first step for Nigeria and that over the next 5 years’ investments of approximately US$1 billion will be brought in by a group of sponsors including Pan Africa Solar, African Finance Corporation and JCM Capital; a Canadian private equity firm. This significant investment will facilitate the construction of a number of solar power plants that between them will be capable of generating 1,000 megawatts. Justin Woodward from JCM Capital said, “This is the start of a solar revolution in Nigeria.”.
A number of other firms have already expressed their intentions to invest what is projected to be as much as US$7 billion in Nigeria’s solar industry, enough to build solar power plants capable of producing over 4.2 gigawatts of power by 2020.