1. Energy, Finance, Partnerships: Transforming Clean Business
Jubril Kareem
Energy Research Specialist, Ecobank Capital
africaficc.ecobank.com

3. Transforming clean energy application: From household to grid
Proposed Solar projects
Source: NBET
There has been a surge of interest in renewable power generation over the past 5 years
NBET signed PPA with 14 companies planning to build 1,125MW of solar capacity in 2016
However, successful application has been limited to household and small scale consumption
Large scale projects can help boost grid supply
Mini grid can be designed around sizeable projects
©Ecobank Research 2018 | Renewable energy | Jubril Kareem, Energy Specialist | 17 April

4. PPP: lowering investor’s risk through strategic financing agreements
Azura Edo financing structure
Source, Ecobank Research
Removing unsystematic risks that discourage investors
Reliable power purchase agreement that reflects cost and margins appropriately
Government guarantee to aid securing capital financing
©Ecobank Research 2018 | Renewable energy | Jubril Kareem, Energy Specialist | 17 April

5. Funding Source: Focus on cheap and patient capital
Equity
Preferable source of capital
Strategic investors with long term view
Unfortunately, underdeveloped capital market makes public equity difficult to raise
Debt
DFIs
World Bank, European Union,
The African Trade Insurance (ATI) and European Investment Bank (EIB) recently launched a US$1 billion facility to finance renewable projects in Africa.
Green and Impact investment organizations
Traditional Debt financing
Nigerian government and foreign governments grant
©Ecobank Research 2018 | Renewable energy | Jubril Kareem, Energy Specialist | 17 April

6. Building a self sustaining industry that supports clean energy application
Recovery in Nigeria since oil price slump
How did they manage this difficult transition – what next?
Sources: NBET, Ecobank Research
Working towards a self sustaining power industry is a major prerequisite to attracting investment to the power industry. The current model is heavily dependent on government funding for survival.
The industry’s current financial dynamic makes reasonable projects unsustainable
©Ecobank Research 2018 | Renewable energy | Jubril Kareem, Energy Specialist | 17 April

7. The current industry pricing variables are far from reality
Electricity Cost across SSA countries US$/kWh
Recovery in Nigeria since oil price slump
How did they manage this difficult transition – what next?
Sources:: NERC, Ecobank Research
Despite increasing Gencos tariff by 58% in 2016, final consumer’s tariff still remain stagnant and poorly reflect the cost of electricity generation and distribution in the country.
The current MYTO being utilized still incorporates exchange rate at NGN199/$ and assumed generation of 7,100MW, over 40% off current reality.
©Ecobank Research 2018 | Renewable energy | Jubril Kareem, Energy Specialist | 17 April

8. Thank You