Nigeria and
other African nations are said to be generally experiencing rapid economic
growth of 5 per cent per annum. This is higher than concerted efforts to provide
energy for investors and other users.
Experts say
the situation has created a huge gap between what is required and what the
nations can provide. For instance, the nation’s daily electricity demand is
estimated at over 14,000 megawatts (mw) while the nation is able to generate a
little above 4,000mw.
Consequently,
many power users have to rely on their private generators to meet their demand
at higher cost. The high cost of generating electricity has culminated in high
cost of products and services, which affect the ability of the nation’s
products to compete with others at the regional and global markets.
But there
are indications that more energy would be generated in medium and long term
basis as many stakeholders have started to pay more attention to funding.
Take the case of Rural Electrification
Agency (REA) as an example.
Following a
request by the Chairman, Nigerian Electricity Regulatory Commission (NERC), Dr. Sam Amadi, to the Senate President,
Dr. Bukola Saraki, a resolution
would soon be made to ensure the release of funds for the Rural
Electrification Agency (REA).
A delegation
of the NERC Commissioners received this assurance when they paid Senate
President, Dr. Bukola Saraki, a courtesy call in his office, at the National
Assembly, Abuja. While briefing the Senate President and members of the Senate
Committee on Power on the performance of the power industry in the light of
the electricity reform, NERC’s Chairman, urged Dr. Bukola Saraki to use his
good office to initiate the resolution that would enhance the release of funds
to the REA, because the law demands Senate’s authorisation.
Amadi said: “The law demands that at the end of each fiscal year, money
not expended by us is put in a special account for the sole use of the agency.
The money is there, the Senate has not given the resolution authorising us to
transfer the fund to the REA.”
The
Commission’s helmsman assured NERC was committed to its mandate of ensuring
fair pricing and affordable tariff for consumers, making sure they are
protected, in response to one of the questions by the Senate President on how
e Commission is able to tackle what he described as ‘impunity’ of some
licensees that have failed to live up to their responsibilities of meeting
their license terms and conditions. Dr. Saraki urged for sanction to be meted
on those found to be violating the terms of their license; this was even as he
stated that the relationship between the Commission and its operators was to
agree that they will be allowed to recover prudent profit.
He also
disclosed that the Commission is holding distribution companies to firm
deadline in meeting their metering requirements/demands. He declared that many
of the Discos ought to complete metering in two years at least, while the
Commission was tackling the issue of overbilling at the same time. This he
said, is being resolved through a methodology that ensures Discos are put on
checks.
More than
that, the African Development Bank and other agencies have concluded plans to
invest $250 billion in the next 15 years. The French Ambassador to Nigeria, Mr. Denys Gauer, who disclosed this at Nigeria Alternative Energy Expo (NAEE
2015), said the investment plan targets an electrification rate of 80 per
cent on the continent. According to Gauer, the plan was initiated by, a French
politician and former Minister for Environment and Sustainable Development, Mr. Jean-Louis Borloo, when he created
an Endowment Fund “Energy for Africa”. He said the objective of this initiative
is to set up an organization, or an agency, dedicated to funding energy
infrastructures in Africa.
Mr. Gauer
indicated that the Green Climate Fund, promised by industrialized countries at
the Copenhagen conference in 2009, was endowed to the tune of 10 billion
dollars and should finally, in Paris, be put at 100 billion dollars. He
maintained that President Obama’s Power Africa plan provides an investment of 7
billion dollars over 5 years. Besides this, there are other initiatives of
bilateral and multilateral donors.
The French
envoy said there are calls for the creation of an agency for the
electrification of Africa, with the ambition of being a single receptacle for
all initiatives and international investment for the development of access to
electricity. According to him, the duty of such agency among other things would
also be to promote the development of access to electricity projects across the
continent by meeting the technical, institutional, legal or financial
requirements of Africans.
He disclosed
that already, discussions are on between the President of African Development
Bank, Dr. Akinwumi Adesina, and the
Egyptian minister Mr. Khaled Fahmy,
in New York and Cairo have shown that we have to work to avoid any rivalry
between the African Development Bank on the one hand and the African
Ministerial Conference on Environment (under Egyptian presidency) on the other
hand, about who should manage the initiative. Mr. Gauer disclosed that Egypt is
now heading the working group in charge of the implementation of this
initiative.
Dr. Adesina maintained
that he plans to dedicate his tenure to solving what he sees as the biggest
hindrance to economic growth and development on the continent: the energy
deficit. The Nigerian born Adesina, who took over as president of Africa’s
lead development lender in September, has said that his flagship project aims
to raise $55bn of investment to close the energy deficit in the next decade. He
said the bank will take a leadership role, coordinating with existing
multinational initiatives and pushing member states to move faster to
privatise and liberalise their energy sectors.
He noted,
demand for power on the continent is growing and many investors wanting to
expand their businesses see the cost of energy as a barrier to entry. But when
it comes to solving the continent’s long-running power crisis there have been
plenty of tough talk and many lofty promises with little change.
Dr. Adesina
indicated that the AfDB’s initiative will be a step change from previous
efforts. Though the details are not finalised, he says a key priority is to
“address systemic issues that have held us back” — namely the energy policy
environment in many of the bank’s member states.
He said: “The biggest elephant in the room is the fundamental reforms
needed in the energy sector.”
He also
attributed the problem to the policy environment. As he puts it, “We will be looking at things like how we price energy and
the regulatory environment around the utilities”. Dr. Adesina
maintained that the bank is prepared to push member states to raise efficiency
and to introduce regulatory reforms, in order to attract the private sector
investment needed to lift the Africa’s grid-based electricity generating
capacity.
Meanwhile,
President Muhammadu Buhari has assured that government is committed to doing
renewable energy projects in the country as it is sustainable and
eco-friendly. Buhari who was represented by the Permanent Secretary in the
Federal Ministry of Power, Dr. Godknows Igali,
at the 5th National Alternative Energy Expo (NAEE) in Abuja yesterday said
power is critical to socio-economic development as it stimulates economic
activities.
He said: “The performance of the power sector therefore is crucial
and critical to the survival of the industrial sector and the growth of Small
and Medium Enterprises (SMEs) which serves as the bedrock for the development
of any society.”
The
President maintained that emphasis is being shifted towards environmentally
friendly alternative sources of power generation to protect the ecosystem, with
global investors looking closely at the energy opportunities in Nigeria.
He said: “With global investors looking closely at the energy
opportunities in Nigeria, the Government is committed to establishing a level
playing ground, with encouraging policies and incentives. We will continue to
promote Renewable Energy programmes that will integrate the objectives of all,
inclusive green economy and attract financing partners like development
banks, international development agencies and other financial options for supporting
the transition to a cleaner Energy in Nigeria.”
He said this
year’s Expo will see the launch of ‘G2020’ which will help promote energy
efficiency culture among Nigerians. He added that the programme is to generate
20megawatts of Green Energy by 2020 with plans to supply clean electricity to
residences, schools, health centres and police stations across rural areas.
These and
other efforts are expected to complement the initiatives of others, especially
the Manufacturers Association of Nigeria (MAN) to ensure more power is
avaiable for industries. MAN’s President, Dr.
Frank Jacob, maintained that electricity challenge to industries would be
surmounted if a legal framework can be provided to help manufacturers reduce
cost of production. (nationalmirror)
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