Britain to increase Nigerian investment in renewable energy and climate change

Britain’s Africa Minister Vicky Ford and Nigeria’s ruling Minister of State Jedy Agba react during the signing of new investments focused on jobs and financial autonomy, in Abuja, Nigeria February 21, 2022. REUTERS /Afolabi Sotunde

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ABUJA, Feb 21 (Reuters) – Britain plans to increase investment in renewable energy and climate change projects in Nigeria and will provide 10 million pounds ($13.6 million) in support , Africa Minister Vicky Ford said on her first trip to the country.

Nigeria’s demand for electricity far outstrips supply, meaning its 200 million people either have to go without or rely on expensive, smoke-spewing generators.

Nigeria has the capacity to generate around 7,000 megawatts (MW) of electricity, but due to poor infrastructure, gas supply issues and water shortages, just over half reaches the National Network.

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Ford said the funding invested alongside Nigerian credit guarantee company InfraCredit will help mobilize domestic investment in pensions and insurance and reduce risk for projects targeting off-grid and low-carbon businesses.

“This transaction…brings together the backing of the UK government with the institutional capital that is essential to grow the industry at scale,” Ford said in a statement on Monday.

The Nigerian sovereign wealth fund, a co-investor in InfraCredit, aims to provide up to 250 to 500 megawatts of renewable energy capacity in Nigeria, it said in the statement.

Nigeria has over 12 trillion naira of institutional funding held in pension, insurance and wealth funds, mostly invested in government securities or occasionally in Nigerian stocks. However, around 0.5% of pension assets are invested in infrastructure funds in Nigeria, less than a 4% limit.

As the world seeks to transition to clean energy, Ford said the UK funding will expand opportunities for the private sector and provide affordable long-term financing to local investors for off-grid and low-carbon projects.

The British High Commission said in a document that Britain had provided more than £80 million for Nigeria’s renewable energy sector, including grants and loans.

($1 = 0.7350 pounds)

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Written by Chijioke Ohuocha; Editing by Alexander Smith

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Teresa H. Sadler