By:Esi-africa

A new report by the Renewable Energy Association of Nigeria (REAN), with the support of All On Energy, conducted an in-depth study on the obstacles causing bottlenecks with RE projects.

Advocacy & Engagement on Fiscal Incentives & Importation Procedures for Renewable Energy Technologies in Nigeria report presents key recommendations to streamline the importation process.

It also advocates for removing VAT and import duty on renewable energy components – “a crucial step in making renewable energy more affordable and accessible.”

Fiscal incentives, such as duty waivers and VAT exemptions, have played a pivotal role in reducing the cost of importing RE technologies, particularly solar components, the report noted.

On the ground challenges faced by renewable energy importers, developers in Nigeria

Developers, said the REAN, have expressed their reliance on fiscal incentives to ensure the financial viability of renewable energy projects, especially in the solar sector. 

“However, they are also frustrated by the slow customs procedures that lead to delays, project overruns, and increased costs.”

One developer remarked to the Agency, “We face constant delays in customs clearance, which affects our ability to deliver projects on time. Even with the fiscal incentives, the overall process is still very challenging.

On the other hand, importers continue to face significant challenges related to product misclassification, which often leads to higher tariffs.

For example, several importers cited instances where renewable energy technologies were classified under general electrical equipment, leading to tariffs of up to 15%, rather than benefiting from duty waivers.

One importer described the situation: “We have entire shipments multiple times delayed by weeks because our products were misclassified. It’s an issue that seems to happen frequently, adding to our costs.”