Solar Energy companies need access to long term capital, – CEO, Solynta

By Ayobami Adedinni
A renewable energy expert and Managing Director/Chief Executive Officer, Solynta Energy Limited, Uvie Ugono has reiterated the need for banks to support the sector with long term capital adding that Renewable energy is capital-intensive.
Industry watchers have said that project financing still constitutes the highest hurdle in realizing Renewable Energy projects in Nigeria.
Speaking in an exclusive chat with PETROLGASREPORT , he said with the right funding, the sector could grow bigger than the telecommunication industry.
In his words, “In Nigeria, there is a need for access to long term capital. Whenever a bank lends you money, they want it back within 2 years. So, you can’t get a loan from a bank locally.
“The banks have not really participated with the exception of EcoBank who recognize the importance of renewable,” he said.
According to him, closely linked with this is the issue of affordability by customers which he said could be attributed to low awareness campaign.
Speaking further, he stated that although everyone wants to have it, they do not have the financial capacity to get it.
He said, “The industry is growing very quickly but I think the major issue is that the awareness is not there.
“The stage we are now is that of affordability where the average Nigerian can get power supply. The solution to the problem does not lie in technology but innovations around credit where they would have to pay in installment just like you fuel the generator.
“For instance, you buy a generator for N50, 000 as your initial deposit. Then, you begin to fuel it at the cost of N1, 000 per day which is about N30,000 in a month for 6 hours in a day power plus N5, 000 for maintenance which is about N35, 000 every month for an average person.
“Renewable energy is highly capital-intensive so you buy the equipment, and once you install, you now have light uninterrupted forever.
“This is because when you tell a customer , “give me N1 million for a system”, they do not have the money. Even though, you are going to realize that if I could just get my hands on this thing, within two years, I would have recouped my investment.
“Although everyone wants to have it, they do not have the financial capacity to get it. We buy the systems with our own money. And then the customer makes half payment and then we wait to get our money back.
“So, how we solve that challenge is by offering payment plans to the customer so the customer can pay 35 per cent down payment on the system and pay the balance over the next few months.
“We now had to introduce a 5-year Pay-As-You-Go-Plan where you can pay even less.
“So, an average customer can pay N150, 000, have the system installed and then pay N23, 000 for 5 years and then you stop paying,” he added.
He therefore urged participation by the financial sector to ensure that the enabling environment provided by government is adequately utilized.