End-user finance for clean energy in Adamawa state, Nigeria

Year

2017

Funding

CCAC Funded

Implementing partners

United Nations Environment Programme (UNEP)

Nigeria is severely constrained by an insufficient supply of reliable electricity. Most villages are off-grid, and those who do have access to electricity, are subject to daily blackouts. As a result, many households have come to rely on highly polluting and hazardous forms of energy, including wood, charcoal and kerosene, to cook and to light their homes. This has a considerable impact on the villager's health and the climate, and is driving deforestation at an alarming rate.

The Coalition’s Finance initiative is providing technical assistance to Nigeria’s Standard Microfinance Bank in order to develop its capacity for energy lending to households. Through this project, the Coalition aims to support scalable and affordable financing mechanisms for clean, off-grid energy that can accelerate the country’s transition to low-emission household energy solutions.

Challenge

Access to clean energy is an important step to achieving sustainable development in Nigeria, where 57% of an estimated 130, 900 child deaths due to acute lower respiratory infections is attributable to household air pollution.

Emitting large amounts of air pollutants such as black carbon, fuels traditionally used for cooking and lighting are the main sources of household air pollution in Nigeria. In addition to their heavy health and environmental costs, these fuels are also often expensive and unreliable. Kerosene for example, a subsidized fuel commonly used for lighting, is often in short supply and ends up being sold on the black market at prices most families cannot afford.

Making clean energy more widely available to end users, especially to households located in remote places, remains a challenge, as financing options must be attractive to microfinance institutions and affordable for consumers.

Experience in other countries has shown that solar lighting sold on credit can result in immediate savings for households when compared to the cost of dirty fuels such as kerosene.

What we're doing

By providing technical assistance to Standard Microfinance Bank, the Coalition’s Finance initiative aims to build its capacity to provide attractive financing models that help Nigerian households purchase renewable lighting and cooking technology.

The Coalition is working with Standard Microfinance Bank to identify the best approaches for expanding its energy lending. This includes:

A needs assessment survey of a sample of 300 households to identify the needs and constraints in accessing finance for clean technologies.
Comprehensive assistance for the development and launch of new lending products – including a strategic product development approach and the development of marketing plans and tools.
Training modules for micro-entrepreneurs and training for 150 micro-entrepreneurs.
Facilitation of a South-South knowledge exchange forum with successful solar lighting finance initiatives (such as IDCOL, Bangladesh and M-Kopa, Kenya).