In the dimly lit and stuffy classrooms of Nigeria, children struggle to learn in the absence of reliable electricity. The sun’s rays, streaming through wooden windows, provide the only source of light, forcing pupils to squint at their books and intermittently at the blackboard. This is the daily reality for countless schoolchildren across the country, where many buildings remain unconnected to the national electricity grid.
Even in schools like the Excellent Moral School in Olodo Okin, Ibadan, where the community itself lacks access to the grid, the impact of this energy deficit is acutely felt. School founder Muyideen Raji laments that students are unable to learn how to use computers or the internet, their evening studies disrupted by the perpetual darkness.
The problem is systemic. Approximately half of Nigeria’s 200 million inhabitants are connected to a national electricity grid that often fails to provide sufficient daily power. Many impoverished rural communities, like Olodo Okin, remain entirely off the grid. While Nigeria boasts abundant sunshine, a potential source of abundant solar energy, getting risk-averse investors to finance major solar projects remains an uphill struggle.
Despite studies showing Nigeria’s capacity to generate far more electricity than its needs from solar power, fourteen grid-scale solar projects, contracted in 2016, have stalled. High borrowing interest rates, reaching as much as 15 percent, act as a deterrent. This is significantly higher than in advanced economies and China, making solar ventures in Nigeria and other developing nations considerably more expensive.
Africa’s solar power capacity lags far behind that of Germany, with a mere one-fifth the capacity. Furthermore, only 2% of global clean energy investments flow to the continent. Najim Animashaun, director of Nova Power, a stalled solar project, highlights the disparity. He struggles to secure loans even at 10% interest rates or higher, despite his project’s potential to generate two and a half times more power than a comparable project in Denmark, which would easily access funding at 2-3% interest rates.
Further complicating the situation is Nigeria’s failure to implement cost-reflective tariffs. The price consumers pay for electricity doesn’t cover production and distribution costs, leaving power distribution companies unable to fully compensate producers. This dependence on government interventions scares off lenders, hindering investment in the solar industry. Currently, power producers are owed a staggering 3.7 trillion Naira ($2.7 billion) by the government, making it difficult to meet financial obligations to lenders and contractors.
While World Bank guarantees could provide the necessary reassurance for investors, the government hesitates to commit to such an arrangement, wary of being forced to pay large sums even if electricity from the projects doesn’t reach consumers due to insufficient transmission and distribution infrastructure. This uncertainty further discourages investment. Edu Okeke, managing director of Azura Power, emphasizes that without these guarantees, private financing for solar projects is highly unlikely, as the risk of government subsidies drying up is too great.
With limited electricity generation capacity, averaging less than 4,000 megawatts — less than half of Singapore’s supply to just 5.6 million people — power outages are commonplace in Nigeria. Communities like Olodo Okin, lacking grid access, are surrounded by areas connected to the grid but subject to frequent power disruptions. This necessitates reliance on expensive gasoline and diesel-run private generators.
The removal of long-standing petroleum subsidies has further compounded the issue, making it difficult for households, schools, hospitals, and businesses to afford fuel for their backup generators. Lorat Nursery and Primary School, in an Ibadan area connected to the grid, experiences outages lasting up to two weeks, forcing them to abandon the use of diesel generators due to the high cost.
The lack of electricity extends beyond the inconvenience of limited lighting and ventilation in classrooms. Students are unable to complete school assignments at home, and computer-aided learning remains a distant dream. Small businesses, like restaurants, face the daunting choice of closing shop or incurring crippling costs for alternative power generation, hindering their growth. Ebunola Akinwale, owner of Nature’s Treat Cafe, spends a staggering 2.5 million Naira ($1,700) monthly on backup generators for her four branches. She fears having to close one or two branches if the situation doesn’t improve, pushing her to explore solar solutions. While she’s in talks with her bank for a low-cost loan specifically designed for young women entrepreneurs, not every business or household has such access or the upfront capital to invest in a private solar system.
The stalled solar projects are a symptom of a larger financial crisis plaguing Nigeria’s electricity sector. The government, burdened by the costs of subsidies, recognizes the need for a more sustainable solution. Power Minister Adebayo Adelabu advocates for electricity prices that reflect the true cost of service, arguing that a broke government cannot afford to continue subsidizing the sector.
This position has generated pushback, with labor unions striking in June to protest electricity tariff increases. However, businesspeople like Akinwale acknowledge the government’s perspective, recognizing that even without subsidies, grid electricity, if consistently available, remains cheaper and cleaner than diesel generators.
While grid-scale solar projects remain financially challenging, Akinwale proposes incentives like tax relief and payment plans to encourage private solar adoption. She emphasizes the abundance of sunlight available in Nigeria, a resource ripe for harnessing. Former regulatory chief Sam Amadi advocates for a policy that makes smaller-scale solar projects more accessible and affordable across communities, businesses, and homes.
The consequences of Nigeria’s energy crisis are far-reaching, impacting everything from education and economic growth to healthcare. The lack of reliable electricity has devastating consequences, with stories emerging of individuals losing their lives due to power outages during critical medical procedures. The urgent need for a sustainable energy solution is undeniable. The question is, will Nigeria harness the power of the sun to illuminate a brighter future, or will the darkness continue to hold the nation hostage?
