The Nigeria Customs Service (NCS) may increase duties on importation of renewable energy appliances and components into Nigeria in the 2017 fiscal year, OGN has reliably gathered.

Informed sources told OGN in Abuja that though a circular to this effect was still being awaited, the planned raise has reportedly gotten the approval of the country’s authorities.

Classified under ‘Electric generating sets and rotary converters’ with HS commodity code 85.02, the current duty rate for importing renewable energy products into Nigeria is 5%. The import VAT is 0%.

Additional taxes which include landing charges may however apply when importing renewable energy products into the country. Also, the country has a most favoured nation (MFN) tariff rate of 20%.

MFN tariff is a duty rate applied to a country with MFN status. It is the lowest possible tariff a country can assess on another country. Under the WTO agreements, countries cannot normally discriminate between their trading partners, and are therefore required to extend MFN status to other WTO members, though exceptions exist under strict conditions.

While details of the prospective tariff is still unknown, the sources however explained that this could ridicule Nigeria’s stated commitment to clean energy generation and diversification going forward.

Under the country’s Renewable Energy and Energy Efficient Policy (REEEP) which stakeholders speak highly of, the country seeks to have a zero duty for solar appliances and 5% duty for solar panels regime.

Moreover, it is not clear how this will affect the 14 solar plant developers who in July 2016 signed their respective power purchase agreements (PPAs) with the government to generate over 1200MW of solar power.

OGN learnt some of the firms could conclude their financial closures soon. Their total financial commitment to the 14 pioneer solar projects is placed around $2.5bn.