Policy Support
Government incentives, legal framework and international backing driving Nigeria's renewable energy expansion
Tariff & Tax Incentives
Zero‑duty import, VAT exemption and reduced corporate income tax for renewable energy equipment and projects
Zero Import Tariffs
Core equipment:
- PV modules
- Inverters
- Storage batteries
HS codes 8541.40, 8504.40, 8507.60 – fully exempt
Import VAT Reduction
Reduced from 7.5% to 0% for all renewable energy equipment
Valid for solar, wind, hydro, biomass & storage
Corporate Income Tax
For PV and energy storage businesses
Applicable to companies engaged in manufacturing, assembly or project development
Regulatory Framework & Key Institutions
Legislative backbone and implementing bodies ensuring policy coherence and investor confidence
Core Legislation & Policies
- •Electricity Act 2023 – replaces the Electric Power Sector Reform Act 2005; empowers state governments to license and regulate electricity markets, sets renewable generation targets, and establishes the Rural Electrification Fund.
- •Nigerian Renewable Energy and Energy Efficiency Policy (NREEEP) 2015 – strategic framework aiming for 30% renewable energy share by 2030; provides guidelines for feed‑in tariffs, fiscal incentives and standards.
- •National Renewable Energy Action Plan (NREAP) 2016-2030 – detailed implementation roadmap with capacity targets for solar PV (500 MW off‑grid, 2 GW on‑grid by 2025), wind, biomass and small hydro.
- •Nigerian Investment Promotion Commission (NIPC) Act – pioneer status incentive offers 3‑5 year tax holiday for qualifying renewable energy manufacturers.
Implementing & Regulatory Bodies
- •Rural Electrification Agency (REA) – oversees off‑grid electrification, manages the Nigeria Electrification Project (NEP) and administers the Rural Electrification Fund.
- •Nigerian Electricity Regulatory Commission (NERC) – issues licences, sets tariffs and enforces technical codes for the electricity industry, including mini‑grid regulations (200 kW threshold exemption).
- •Federal Ministry of Power – formulates national energy policy and coordinates inter‑ministerial renewable energy programmes.
- •Nigerian Investment Promotion Commission (NIPC) – one‑stop investment facilitation, issues pioneer status certificates and handles business registration incentives.
- •Energy Commission of Nigeria (ECN) – strategic planning, renewable resource assessment and energy efficiency advocacy.
All renewable energy projects must obtain appropriate licences from NERC (for >1MW on‑grid) or permit from REA (for off‑grid/mini‑grid). Pioneer status applications are processed by NIPC within 30 working days.
International Financial Support
US$2.77 billion committed by multilateral banks and development partners
World Bank
Low-interest loans for off-grid PV storage projects and rural electrification (Nigeria Electrification Project – NEP). Deployment: 1.5 million solar home systems, 100,000 mini‑grid connections by 2026.
African Development Bank
Credit line for PV microgrid construction in rural areas under the Desert to Power initiative. Target: 20 MW+ mini‑grid capacity, 500,000 new connections in northern states.
Export-Import Bank of China
Concessional loan for Nigeria's super grid project – 750kV transmission backbone, substations and SCADA upgrade (Lagos–Kano–Port Harcourt corridor).
World Bank · AfDB · Export-Import Bank of China
Additional Incentives & Compliance Requirements
Beyond fiscal relief: pioneer status, accelerated depreciation, local content rules and environmental conditions
Pioneer Status Incentive
Renewable energy equipment manufacturing and assembly are designated pioneer industries under the NIPC Act. Qualifying companies receive:
- 3‑year tax holiday (extendable to 5 years) from corporate income tax
- 100% exemption from dividends withholding tax during holiday
- Tax‑free dividends paid out of pioneer profits
Application fee: N1,000,000 (approx. US$1,250). Processing: 30 working days.
Accelerated Depreciation
Capital allowances for renewable energy plants are available at 95% of qualifying expenditure in the first year of use (Companies Income Tax Act, as amended).
- Solar PV, wind and hydro power assets: 95% initial allowance
- Annual allowance thereafter: 0% (fully written off)
- Incentive applies to both on‑grid and captive power plants
Must be certified by the Ministry of Power and Federal Inland Revenue Service.
Local Content & Employment
Nigerian Content Development requirements for the power sector (NCDF Act):
- Minimum 50% Nigerian labour in project execution
- Mandatory use of locally manufactured steel, cables and low‑voltage panels when available
- Annual levy of 1% of contract value for projects above US$5M
Administered by Nigerian Content Development and Monitoring Board (NCDMB).
Environmental & Grid Compliance
- Environmental Impact Assessment (EIA) mandatory for >10MW plants (NESREA Act)
- Grid code compliance for systems >1MW: frequency control, harmonic distortion limits
- Net metering cap: 1MW per customer for distribution grid feed‑in
NERC Mini‑Grid Regulations 2023: permits required for >100kW, simplified registration for smaller systems.
Ready to leverage Nigeria's energy incentives?
Zero tariffs, VAT exemption, 15% CIT, pioneer status, accelerated depreciation and US$2.77B funding – our team provides full market entry support
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