The Nigerian CleanTech Industry. Prospects and Opportunities
According to the World Bank report, over 85 million Nigerians lack access to grid electricity, representing about 43% percent of the country’s over 200 million population. Economically speaking that is a significant constraint for citizens and businesses, resulting in annual economic losses estimated at $26.2 billion which is equivalent to about 2 percent of the nation’s GDP. However, in the last couple of years, the CleanTech startup sector in Nigeria has been rapidly evolving with an increasing interest in CleanTech solutions. This has led to the emergence of several startups and several are focused on addressing these challenges.
The cleantech startups are also holding their own in terms of funding, taking a subsistence sum from the $1.4 billion secured from startups operating in the ecosystem in 2022. They are also contributing significantly to the nation’s economy with Daystar Power as the highest employer of labor in the vertical with 109, followed by Arnergy with 91 and Rensource with 90 respectively.
The most notable areas of growth in the Nigerian CleanTech startup sector have been in the field of renewable energy. With a population of over 200 million people and a rapidly growing economy, Nigeria has a large energy demand that is primarily met by fossil fuels. Regardless, this has led to significant environmental and health problems. To address this, startups like Arnergy, OneWattSolar, and MySolarBid came on stream to focus on developing and deploying renewable energy solutions such as solar and wind power. These startups are working to provide clean, reliable, and affordable energy to communities across the country, helping to reduce the nation’s dependence on fossil fuels.
The Nigerian CleanTech startup sector has been in the field of waste management and recycling. As the population continues to grow, so does the amount of waste generated. This has led to significant environmental problems, such as overflowing landfills and polluted rivers. To address this, the likes of Kaltani, Recyclan, WeCyclers, Vicfold recyclers, among others that are focused on recycling and repurposing waste materials. These startups are working to reduce the amount of waste that ends up in landfills, while also creating jobs and economic opportunities for communities across the country.
There has also been an increase in government support for CleanTech startups in Nigeria. Africa’s most populous nation had pledged to cut its greenhouse gas emissions by a fifth over the next decade under the Paris climate agreement. It launched an energy transition plan last year, which aims to attract private and public sector investments to expand solar infrastructure and grow gas-powered generation. Having recognized the potential of CleanTech to address some of the major environmental and energy challenges facing the country, the government has launched the Nigeria Renewable Energy Master Plan (REMP), a policy being implemented by Nigeria’s Federal Ministry of Environment that aims to increase the contribution of renewable energy to account for 10% of Nigerian total energy consumption by 2025.
Private sector organizations have also been investing in the Nigerian CleanTech startup sector. Daystar Power received a $20 million investment from the International Finance Corporation(IFC), a subsidiary of the World Bank Group in 2021 to Kaltani raising $4 million in May last year to tackle plastic pollution in Africa. These investments have helped to drive the growth of the sector and increase awareness of the potential of CleanTech to address some of the major environmental and energy challenges facing Nigeria.
Prospects and opportunities in the Nigerian cleantech sector
The Nigerian cleantech sector has significant potential for growth and development. Nigeria is the largest economy in Africa and has a rapidly growing population, which creates a large demand for energy and infrastructure. The country also has abundant natural resources, such as solar and wind power, that can be harnessed to generate clean energy. Additionally, the Nigerian government has recently made efforts to increase investment in renewable energy and improve infrastructure, providing opportunities for cleantech companies to enter the market and grow. However, there are also challenges to be faced, such as a lack of access to financing and a need for more skilled workers and technicians in the sector.
Nigeria, the largest economy in Africa and home to over 200 million people, has significant potential for growth and development in the cleantech industry. As the population continues to grow and urbanize, the demand for energy and infrastructure is also increasing. At the same time, Nigeria has abundant natural resources that can be harnessed to generate clean energy, such as solar and wind power.
One of the main opportunities in the Nigerian cleantech industry is the large and growing demand for energy. According to Statista, nearly 36.4 thousand gigawatt hours of electricity were generated in Nigeria in 2021, where Fossil fuels form a major part of the overall production. This is largely inadequate with over 42.5 percent of Nigeria’s population not having access to grind electricity according to the World Bank report.
The country has a rapidly growing population and economy, which creates a large energy demand. However, it relies heavily on fossil fuels, which not only harms the environment but also makes the energy sector vulnerable to fluctuations in global oil prices. Cleantech companies that can provide clean and reliable energy solutions, such as solar and wind power, can tap into this large market and help to meet the country’s energy needs.
Another opportunity in the Nigerian cleantech industry is the abundance of natural resources. Nigeria is blessed with abundant all-year-round solar and wind resources that can be harnessed to generate clean energy. With the right technology and investment, these resources can be used to power homes, businesses, and industries, reducing the country’s dependence on fossil fuels and helping to mitigate climate change.
The Nigerian government has also been making efforts to increase investment in renewable energy and improve infrastructure. This has included the launch of the Nigerian Renewable Energy and Energy Efficiency Policy (NREEEP) in 2013, which aims to increase the share of renewable energy in Nigeria’s power mix to 30% by 2030. Additionally, the Nigerian Federal Ministry of Power has recently announced plans to set up a renewable energy development center to support the growth of the industry. These efforts create a conducive environment for cleantech companies to enter the market and grow.
In conclusion, Nigeria’s cleantech industry presents a unique opportunity for companies to tap into the large and growing energy market, harness the abundant natural resources to generate clean energy, and benefit from the government’s efforts to increase investment in renewable energy and improve infrastructure. To achieve this, companies must work to overcome the challenges of financing and the shortage of skilled workers and technicians. The cleantech industry in Nigeria is poised for significant growth and development, creating an opportunity for companies to be a part of something big.