Nigeria: Off-grid energy, finance and localisation to drive EV sector
Off-grid vehicle charging stations, cheaper financing options and securing local production of parts for the electric vehicle (EV) market could help advance the clean energy transportation ambitions of Nigeria.?
A recent report – A Vision for E-Mobility in Nigeria – highlights the opportunities, challenges and way forward for the industry in the West African country.?
It is co-authored by RMI and the Energy Transition Office Nigeria (ETO Nigeria).?
The report notes that in 2021, Nigeria committed to reaching carbon neutrality by 2060.?
The country released the Energy Transition Plan (ETP), outlining the steps needed to achieve this carbon neutrality goal.?
This plan includes electric four-wheeler deployment, mode shift from passenger cars to public transportation and electric two-and three-wheelers, EV charging infrastructure, and EV manufacturing targets.?
“Efforts to reach these targets have the potential to spur economic opportunities and improve environmental outcomes nationwide.?
“As a result of these national-level commitments to transform the transportation sector, the Nigerian public and private sectors have heeded the call. Several EV adoption and charging infrastructure projects have been implemented across the nation,” said the report. ?
This includes e-bus deployment in Lagos, to 100% solar-powered charging stations through the National Automotive Design and Development Council’s partnership with universities.
The report stresses that despite stakeholders being “ready to act” and the “enthusiastic response” to further the EV sector in Nigeria, challenges persist.?
“Achieving Nigeria’s vision of a cleaner and efficient transportation sector requires a coordinated effort,” said the report.?
Off-grid charging stations
Asked if Nigeria would be best suited at this point to consider off-grid EV charging stations, given the country’s electricity generation and access deficits, Kelly Carlin, Manager of RMI’s Carbon-Free Transportation Programme, said: “Absolutely, the widespread adoption of EVs in Nigeria, and in other markets with variable grid reliability, is going to depend on identifying and testing charging business models that can work either off-grid, or otherwise provide their own reliable power.”
Speaking to ESI Africa Carlin explained:?“We’ve seen this can work in Nigeria in Gbamu Gbamu, in Ogun State, where E2W vehicles charge from a solar-powered, isolated mini-grid. In other markets, battery-swapping has shown it can commercially scale, and that may also play a part in Nigeria.”
E-mobility in public transport
In terms of Nigeria prioritising EVs (e-buses for example), for its public transport system, Carlin said that alongside E2/3 wheelers, e-buses should also be a focus for the national e-mobility plan.?
“They rely on bigger charging depots, and require unique business models, but e-buses are showing they can save money and reduce urban air pollution in other markets across sub-Saharan Africa and South Asia.”
Last June, a Nigerian clean energy company and the Lagos Metropolitan Area Transport Authority (LAMATA) launched the first phase of its sustainable transport initiative aimed at a carbon free mobility ecosystem within the state.
The initiative involved Oando Clean Energy Limited introducing?electric buses?to LAMATA’s fleet of buses.?
Last November, Ogun State launched an e-mobility programme aimed at swapping all petrol powered motorcycles and tricycles with electricity powered ones as part of a wider sustainable transportation adoption drive.
Shifting from a fossil-fuel reliant economy
Nigeria being a top fossil fuel producing country and also host of the gas and oil focused Africa Energy Bank may delay the adoption of EVs, but Carlin points out the country stands to grow its economy through e-mobility.
“The top reasons for Nigeria to prioritise e-mobility are to take advantage of cost savings for Nigerian households, and to drive economic growth.”
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He said the world is rapidly adopting EVs, and Africa is beginning to follow this trend.?
“To be an economic leader in sub-Saharan Africa and to be ready for the world in 2040 or 2050, Nigeria should build the foundation for transportation electrification now, and aim to be a manufacturing hub.?
“Nigeria has the right to develop its own resources, which includes ample solar potential, while also balancing those [fossil fuel] goals with its energy transition plans,” said Carlin.
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In terms of regulatory policies and frameworks, he said investors and manufacturers want predictability and clarity as they look at the growing EV sector in Nigeria.?
“There are the beginnings of good EV policy in Nigeria with the VAT exemption for imported EVs, but there’s more that can be done to improve implementation of that policy, and there are other policies that Nigeria can put in place to support to the growth of the EV sector.”
Localisation
Nigeria should also consider the local EV production value chain.
“In addition to encouraging the import of EVs and EV parts, the initial opportunity for Nigeria is to onshore the last link of the supply chain, with policies that encourage things like local partial-knockdown manufacturing,” said Carlin.
“From there, an effective plan for the growth of the EV sector looks out years ahead, and provides gradually increasing requirements for locally-produced parts.?
“Nigeria needs to have a clear plan that fits the country, the workforce, its charging infrastructure growth, and the country’s priorities.”
The A Vision for E-Mobility in Nigeria report contains recommendations for stakeholders across the public and private sectors.
6 key factors to grow the EV sector in Nigeria
Implement favourable EV policies: Fiscal and non-fiscal policies focused on EV deployment will further push EV adoption in an upward trajectory.?
Expand access and availability to EVs: With the support of the government, the Nigerian manufacturing industry is well-positioned to capture the last stages of the EV supply chain, especially final assembly.?
Establish EV finance facilities: Affordability is key in driving the initial growth of the market and accelerating EV adoption in Nigeria.?
Enhance convenience: Reliable and robust charging infrastructure will drive the success of e-mobility in Nigeria.?
Cultivate engagement: Collaboration between the public and private sectors is the pillar for a thriving and sustainable e-mobility future in Nigeria.?
Promote awareness: Generating positive attention would signal to smaller fleets and other stakeholders in the country that transportation electrification business models are achievable.
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Carlin said there’s a “tremendous opportunity” to increase consumer awareness of the benefits of EVs.
This is especially true of the cost-savings potential, but also the variety of EVs available in Nigeria and how they charge.?
“It’s important that consumers understand EVs are one of their choices as they look at transportation, and to make sure they have all of the information they need to make the best choice.
“The affordability of EVs depends a lot on available financing, which right now is limited in Nigeria. There are steps that government, industry, and donor partners can take to de-risk EV financing – actions that will ultimately make EVs more affordable for consumers.”