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Commercial banks accused of suppressing Nigerian solar market

Nigerian solar energy expert, Ademola Fadunsi, has questioned the financial industry for its slow pace of solar energy investments, saying the inability of local commercial banks to grant loans to investors in the sector has impeded market growth.

However, speaking in Abuja this week, the retired military general and chairman of AO Demarg – a solar energy service and equipment supplier – did applaud Federal Government for releasing N2 billion ($5.5 million) through the Bank of Industry (BoI), for industry investors to access, reported Vanguard Nigeria.

The BoI had launched its Solar Energy Fund for Micro, Small and Medium Enterprises (MSMEs) in January 2017.

Commercial banks have a responsibility

Fadunsi expressed regret that local banks were not willing to assist solar energy investors to develop the country’s solar energy sub-sector even when, according to him, many people were now embracing solar power as an alternative and reliable source of energy.

He said: “Let me say here that we in the business need long-term financial backup from financial institutions but unfortunately, in Nigeria today, local banks are not giving out loans to anybody.”

Emphasising the role of government, he cautioned commercial banks to take heed of the interest government was showing in the solar energy business, stating that 2018 would be promising.

“Government is now putting more interest in the solar energy business. They have, through the Bank of Industry, released about N2 billion solar fund for individuals and investors to access for the purpose of solar power. I think it’s a good start and in a right direction.”

Mini grids also primed for growth

“With what the government is doing in the area of mini grid [development], 2018 seems promising especially by its ongoing partnership with the World Bank in this are,” said Fadunsi.

He particularly lauded government for providing a level playing field for all players in the solar industry, saying the development had encouraged local investors to continue striving ahead.

“The government is giving everybody a level playing ground depending on your capability or technical knowhow and financial backup because even though they are giving out funds too, you as an investor or vendor, must contribute some certain percentage to keep the commitment so that you won’t see the money given to you as free money,” he explained.

Fadunsi also commended the government for its initiative to focus more on connecting rural communities to electricity through its solar mini grid initiatives, saying the development will go a long way in addressing energy needs of the people as well as reducing undue pressure on the national grid. Read more: Morocco solar home market boon

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