Wednesday 21 October 2015

INCREASED FUNDING TO BOOST POWER SECTOR


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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