Stakeholders back domestic financial reform for renewable energy investment

Two new studies on the Nigerian domestic financial sector reform for on-grid renewable energy investment and the development of an Measurement, Reportable and Verifiable (MRV) framework for the power sector have been endorsed by stakeholders in the environment sector.

The stakeholders met at a two-day validation workshop in Port Harcourt, Rivers State organized by United Nations Development Programme (UNDP), in collaboration with the Energy Commission of Nigeria (ECN), Federal Ministry of Environment, Federal Ministry of Power, Works and Housing.

UNDP is implementing a five-year project titled: “De-Risking Renewable Energy NAMA (Nationally Appropriate Mitigation Action) for the Nigerian Power Sector”, which components include design and development of a power sector renewable energy NAMA supported by De-risking Renewable Energy Investment (DREI) analysis; developing Policy and Institutional Framework for private investment in on-grid renewable power generation, and demonstration of first commercial on-grid renewable energy project.

The draft reports for the Nigerian domestic financial sector reform for on-grid renewable energy investment was conducted by Mr. Daniel Rossetto of Climate Mundial while Mr. Arnaoudor Vladislov of Japan handled the development of an Measurement, Reportable and Verifiable (MRV) framework for the Nigerian power sector.

Setting the tone for the workshop, the National project coordinator, Okon Ekpenyong, explained that the overall objective of the project is to assist the government of Nigeria in achieving a transformation in the electricity mix such that at lest 20GW of Nigeria’s electricity is generated by solar PV by 2030.

According to him, the project will contribute to the country’s attainment of its Nationally Determined Contributions (NDCs) mitigation targets in the energy sector, with expected direct emission reductions of 205,700 tons of carbon dioxide equivalent (CO2e) during the project’s lifetime and additional indirect emission reduction between 6.79 and 9.72 million tonnes of CO2e.

“In addition to this, the project is to develop Measurement, Reportable and Verifiable (MRV) framework, with appropriate indicators to measure, report and verify the emission reductions that will be generated by investment in low-carbon activities under the NAMA/NDCs.”

Ekpenyong, who doubles as an engineer, Energy Commission of Nigeria (ECN), noted that the study was initiated to analyse the breadth of the Nigerian domestic financial sector due to the problems associated with on-grid renewable energy development, such as high initial capital intensity and requirement for loans and long tenures.

“The study examined both the various barriers that exist and incentives that can be put in place. It likewise proposed specific policy reforms that are applicable to Nigeria for green infrastructure investment, as well as a road map or action plan for their implementation.

“The project is also expected to develop a framework that will establish accurate measurement and accounting of actual green house gas (GHG) emission reduction from mitigation actions in energy generation and end-use sectors.

“This is based on the premise that, currently, some on-going energy projects do not consider the critical role of an MRV methodology in assessing the contribution of NAMA implementation to the overall national voluntary GHG emission reduction targets..” he added.