Nigeria reviews pioneer status law, includes solar panels, batteries, others

The Federal Government has approved the inclusion of solar systems including solar panels, Solar Home Systems, light emitting diodes, batteries other components that support solar systems which can be manufactured in Nigeria in the revised pioneer status law.

Offgrid Business had in August, when the revised list of pioneer status was published, brought to the attention of operators and the government that this glaring omission would discourage investments in the alternative energy mix, which is a key priority for the Minister of Power, Works and Housing.

“As a conscious measure to incentivize developers, the national policy for pioneer status has been revised by the Ministry of Industry Trade and Investment and approved by the Federal Executive Council to include solar panels, solar Home Systems, light emitting diodes, batteries other components that support solar systems which can be manufactured in Nigeria, said Fashola at the Africa Today Summit held in Abuja on October 17.

Investors say this development portends well for the sector. “It only makes sense to extend pioneer status across board to increase trade and attract the necessary investment that will make business sense to investors and also address affordability issues for consumers,” said Ivie Ehanmo, an energy lawyer in a comment on the issue.

Nigeria seeks to generate 30 percent of electricity through renewable energy by 2030 and experts believe the quickest path to achieving this objective is to incentivise manufacturing and distribution of renewable energy infrastructure.

Fashola said the Federal Government has initiated policies that would support investments in renewable energy, adding that the Rural Electrification Agency (REA) has been revived to drive electricity deployment to rural parts of Nigeria and areas with no access to electricity.

“Their mandate is to champion and drive rural electrification and penetration with the bias to use solar and mini grids. This should have been done since 2006, one year after the Electric Power Reform Act was passed in 2005,” he explained.

Administered by the Nigerian Investment Promotion Commission (NIPC), the pioneer status law is a fiscal incentive offered by Nigeria to companies operating in designated pioneer industries and or producing pioneer products, and can provide an income tax holiday for up to five years.

This tax holiday is given to these companies to encourage the growth and development of the country’s economy. The companies given the exemption status may apply for a certificate of pioneer status which lasts for three years and can be renewed for another two years.

ISAAC ANYAOGU