Power Sector Update Special Edition (Volume 2)

Value Added Tax (VAT) and its impact on uptake of Renewable Energy Products in Nigeria

It is no news that the national grid has failed to provide a sustainable and reliable source of electricity supply for domestic and industrial consumers in order to sustain a rapidly growing Nigerian population and economy. The World Bank reports that though, about 55.4% of Nigeria's population is connected to the energy grid as at 2020, they are typically without power for about 85% of the time and almost nonexistent in certain areas¹. Over the past years, several off-grid power companies have emerged to try and bridge this gap. A number of these entities have typically used renewable energy sources which serves the dual purpose of not only supplementing the grid shortfall but also assisting the country in meeting its climate change obligations under the various international agreements. It is therefore important that Government develop policies which support the continued