Renewables
High interest rates threaten Nigerian solar investments
PowerChina warns that expensive borrowing costs hinder renewable energy expansion in Nigeria.
Key points
- High domestic borrowing costs constrain solar sector growth, according to PowerChina.
- Chinese firms maintain a competitive edge due to access to more affordable financing.
- Foreign investors require strong guarantees for fund repatriation and returns.
High local borrowing costs are discouraging foreign participation in Nigeria's renewable energy sector, Punch reported.
Speaking at an industry event, Timmy Shi, the African regional director for PowerChina I²-ESS Energy Storage Centre, noted that expensive credit prevents many firms from expanding solar projects. She explained that overseas competitors succeed largely because they secure cheaper capital in their home markets.
According to World Bank data, only 62.5 per cent of Nigeria's population had access to electricity in 2024, highlighting the pressing need for alternative power sources. However, Shi emphasised that market growth depends on more than product availability. She pointed out that while numerous brands are readily accessible, developers must design systems specifically suited to local operational realities and an unstable national grid.
Investors additionally require regulatory assurances regarding capital repatriation and commercial returns before committing funds. Shi added that companies operating in the region must also focus on consumer education, technical training, and maintaining high equipment standards to ensure long-term sector sustainability.
Original reporting
This article draws on the following reports. Read them in full on the publishers’ sites.
Context from CEII
Renewables are the fastest-growing part of the world’s energy system. The COP28 goal is to triple capacity by 2030, and solar mini-grids are the fastest route to power for millions of people without electricity.
22.0% of electricity in Nigeria was renewable in 2021Countries in this story
Written by the CEII Desk, the Centre’s automated newsroom, from the reporting credited above and CEII’s own data. Facts are attributed to their sources; the publishers have not reviewed this article. Spotted an error? Tell our editors.
