The Renewable Energy Association of Nigeria (REAN) in association with Sterling Bank, the only Nigerian bank with a functional renewable energy practice, is making available financing for renewable energy projects for industrial, small business and residential users in Nigeria.
Confirming the statement Segun Adaju, president of REAN said they are in talks with the bank adding that five companies including Abuja based Blue Carmel and Elec3city, have signed a memorandum of understanding to provide off-grid power to industrial and residential users respectively.
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Upfront costs involved in acquiring solar energy
Segun Adaju noted that the challenge of huge upfront costs involved in acquiring solar energy is the strongest discouraging factor for rapid solar energy adoption in the country. To set up a 2KV system capable of power a refrigerator, 5 lighting points, a television and sound system set, a user would be required to pay as much as US $2 in a three bed-room apartment.
Systems that can power an entire building including air conditioners and pumping machine could cost between US $6K – US $11K. Considering that the lifespan of solar panels is over 20 years and good batteries can last up to five years, the cost over time is cheaper than buying diesel which pollutes the environment.
Two year warranty
“With financing from the bank however, a residential users can acquire a loan of US $2K which the bank pays to the supplier who procures the and installs the solar infrastructure and the customer repays over a 12 months period at the interest rate of 27%,” said Segun.
“The beauty of the arrangement is that the solar energy supplier has the duty of ensuring that only high quality batteries and solar panels are provided for the customer wherever he can get it. The customer will have a two year warranty and contributes zero equity. All he needs is a salaried account with a verifiable BVN,” he added.
