. If the existing permanent rivers, the streams, as well as, the waterfalls are harvested for their hydropower potential, there would be a generation of off-grid electricity that can be utilized by the rural communities.
The figure below illustrates the magnitude of energy that is generated by the wind and small hydro in Nigeria:The projects that can or are already introduced in Nigeria for the harnessing of renewable power require funding because they are capital intensive.
If equity is the return to be given to the public sector that issues out grants, then there would be a direct control of the Renewable Energy projects by the public sector, which may contribute to the poor project performance and the crowding out of the financing options from the private sector.The return on capital is not a priority, and, therefore, difficulty in initiating further projects that could be beneficial in the long-term.
The subordinated debt has, therefore, a higher risk and attracts a higher return in comparison to the senior debt. This debt is beneficial due to the fact that it allows for the reduction of the investment risk by the senior lenders by limiting their share in the RET project, and exercising control over their financed RE projects. The senior debt can, therefore, be accessed less costly, with the help of the subordinated debt.
. The suggestion that can act as a remedy to this detrimental trend is the involvement of these NGO bodies in the monitoring and evaluating their started projects, as well as, partner with the government and the local organizations in the financing of the renewable energy projects to promote a greater level of responsibility and accountability.
Cash Equity Bridge: The developer pays the lender, with finances acquired from a sponsor when a renewable energy project is completed. The developer may have the obligation to provide a limited guarantee for the cash equity.