Financial Sector Development, Energy Access Financing, and Sustainable Development in Nigeria: An Original Nexus Framework

Nigeria's dual challenge of financial sector underdevelopment and a national electricity access deficit creates a unique nexus that requires original theoretical and policy frameworks linking energy access financing to financial system architecture. This study develops an original theoretical framework for the financial sector-energy access nexus in Nigeria, integrating energy economics, climate finance theory, and financial system design into a co-evolutionary model of financial and energy sector development. The framework formally derives conditions under which specialised energy access finance mechanisms, including green bonds, on-bill utility financing, and development finance institution guarantees, produce socially optimal energy access expansion under binding capital market constraints. An original Energy Access Finance Adequacy Model is proposed that maps financial system capacity indicators to energy access investment gap measures. Empirically, the study uses a multi-level mixed-methods design. At the macro level, time-series analysis of the relationship between financial sector development indicators and electricity access rates in Nigeria from 2000 to 2022 is conducted using autoregressive distributed lag modelling. At the institutional level, structured interviews with 30 energy sector finance specialists, development banks, and commercial bank project finance units were conducted. At the household level, a discrete choice experiment with 400 rural households in Plateau State and Taraba State assessed willingness to participate in financial product-bundled solar energy access schemes. Results confirm significant macro-level complementarity between financial system depth and electricity access rates, and strong household demand for financial product-bundled energy solutions. The study proposes an original Green Energy Finance Architecture for Nigeria.

Keywords: energy access financing, financial sector development, green bonds, sustainable development, Nigeria