Financing Options and Execution of Solar Power Projects in Southwest, Nigeria

The success of solar power projects relies solely on the availability of finance for the execution. The interplay becomes critical for developing countries due to limited financial options, which ultimately impact on their ability to achieve their renewable energy goals. Therefore, this paper examined the main financing options available for execution of solar power projects (ESPP) in Southwest, Nigeria. The main financing options used for the study are equity, debt, government incentives and corporate institution supports. The study adopted a research survey design and a census population of 158 firms. The study retrieved and used 109 valid questionnaire collected from the top managers, representing about 69 percent. The data were collected using a digital questionnaire created with CSPro (Census and Survey Processing System). The method of analysis was the structural equation modelling (SEM). The SEM analyses conducted for the combined effect revealed that equity finance (β = 0.332; P < 0.05) was the only significant option among others; debt finance (β = 0.138; P > 0.05), government incentive (β = 0.138; P > 0.05), corporate institution support (β = 0.167; P > 0.05) were insignificant at 95 percent level. The result showed that equity financing is critical and that companies that use equity financing are more likely to successfully execute their projects. The study recommended that financial sector policy prioritise robust equity financing and offer incentives for project developers that integrate sustainability considerations. Solar power developers should also explore collaboration with private investors to share financial burdens. Overall, the study provided insights into the financing options and execution of solar power projects in Southwest, Nigeria. The findings have implications for policymakers, solar power developers, and investors seeking to promote the growth of the solar power industry in the region.