World Bank mobilises N2.5tr for power generation in Nigeria
7 May 2014
THE World Bank Group announced yesterday that it mobilised about nearly N2.5 trillion as part of the reforms in the power sector, to support electricity generation in Nigeria. In the same vein, to harness interests so far shown by some prospective investors attending the World Economic Forum (WEF) on Africa in Abuja, the Minister of Power, Prof. Chinedu Nebo and his team are hosting a Power Forum Breakfast this morning.
&n bsp; Meanwhile, going by information from the African Development Bank (AfDB) at the WEF, many African countries are gearing up to rebase their economies.
In a related development, President Goodluck Jonathan and the Premier of the People´s Republic of China, Li Keqiang, will today address the 24th series of the World Economic Forum for Africa (WEFA) in Abuja.
The Bank, which stressed how efficient, affordable and reliable access to electricity was essential for small and medium-sized enterprises in Nigeria to accelerate job creation, also announced various project series to support increased power in the country.
In a statement in Abuja yesterday, Vice President in charge of the Africa Region at the World Bank, Makhtar Diop, said: "I am glad that we were able to support Nigeria´s extens ive energy reform programme and provide direct assistance to increase generation capacity by mobilising nearly $1.7 billion of private sector financing through a range of instruments."
The statement noted: "These projects are a critical element of the World Bank Group Energy Business Plan for Nigeria. World Bank partial risk guarantees approved include up to $245 million for the 459-megawatt (mw) Azura Edo power plant near Benin City, Edo State; and up to $150 million for the 533-MW Qua Iboe Plant in Ibeno, Akwa Ibom State.
"The World Bank, IFC and MIGA Board of Executive Directors have approved a package of loans and guarantees supporting a series of energy projects that will help boost independent power generation and ease crippling energy shortages in Nigeria, Africa´s largest economy.
Both plants are gas-fired. The Boards of IFC and MIGA approved loans and hedging instruments of up to $135 million and guarantees of up to $659 million for the Azura Edo project.
"The IBRD guarantees include forward-looking mitigation and risk-sharing arrangements, designed to augment the country´s power sector reforms while building market confidence and setting industry benchmarks. IFC´s investment and MIGA´s guarantee for the Azura Edo power plant will support a trail-blazing project at the centre of Nigeria´s ambitious power sector programme, while setting a replicable model for future power projects."
The bank said Nigeria was hugely endowed with abundant energy resources, including having the world´s eighth largest reserves of natural gas.
It noted: "Yet, 65 per cent of its population - some 100 million people - has no access to e lectricity. Unlocking the flow of Nigeria´s extensive natural gas reserves will expand power supply and energy exports to neighbouring countries in the West Africa Power Pool.
"Support to private sector-financed Independent Power Producers (IPPs) forms a critical part of the Nigerian Government´s Power Sector Reform Roadmap, a strategy to improve power services throughout the country that is widely supported by the Nigerian public."
The bank said it expects the Azura Edo IPP to have a strong demonstration effect and to set a precedent for future private sector.
The Power Forum targets investors who are attending the WEF, especially those who have indicated special interest in the power sector, the Power Ministry said yesterday.
On the significance of the WEF on Africa to Nigeria´s economy, C hairman of the Nigerian Electricity Regulatory Commission (NERC), Sam Amadi, told The Guardian that the event was coming at the right time, especially considering that Nigeria had just completed reforms in the power sector.
"NERC is happy that the world is coming to Nigeria at this time that the reform of the electricity network has entered into a critical stage. Nigeria is the largest economy in Africa and has embarked on the most well-conceived and smartly implemented ambitious reform programme in the power sector.
"The international investors have voted money in the Nigerian electricity market and the willingness to host the WEF in Nigeria in spite of obvious security challenges is a clear vote that the future of the African economic growth is Nigeria.
Posting about six per cent economic growth for more than a decade without a stable e lectricity grid proves that with the success of the work of NERC, Nigeria will jump into a medium economy in less than a decade. NERC welcomes to the world to Nigeria and is willing to showcase our first class regulatory regime."
South Africa, which Nigeria overtook by GDP indices, is also leaving no stone unturned. In fact, the country is taking up the challenge, and will rebase this year, Chief Economist at the AfDB, Prof. Mthuli Ncube, told The Guardian yesterday.
He described the rebasing done by Nigeria as good for the overall economic development of the continent and was hopeful that if other African countries rebase also, the development would change some of the indicators that will make the region look at extreme poor, poorest, among others.
He told The Guardian after his presentation at the WEF on Africa : "In all, about 37 African countries are ready to rebase, South Africa will rebase this year. Kenya is likely to do so this year."
Speaking earlier on `Driving Competitiveness through Co-operation, Integration and Economic Growth´ at one of the sessions at the Transcorp Hilton, Ncube called attention to the need for Nigeria, Kenya and South Africa to synergise to strengthen the African economy and engender greater growth.
His words: "If the three countries could synergise, it would help to reduce the average poverty rate of 48 per cent presently in the region. These three economies, Nigeria Kenya, South Africa and Egypt, when they come up, must inter-tie and work together to drive African economy.
Chairman of KMPG global Africa practice, Seyi Bickersteth, said: "For us to have a positive growth, we need to integrate , get rid of the guys in borders to reduce cost and time of business and movement."
Bickersteth spoke of how borders create huge challenges to free movement of goods on the region.
He added: "Our political leaders have to step down their egos and provide enabling environment for private sector to play a major role."
A South African official, Cas Coovadia, threw his weight behind calls for Nigeria, South Africa and Kenya to forge greater integration.
Coovadia, who is the Chief Executive Officer of Business Unity, South Africa, stressed that the coming together of the three economies would be in the interest of the continent.
"The hosting of the WEF in Nigeria is a great opportunity to see the largest economy in the region. We need efficient private sector participation, enhanced infrastruct ure and ensure accountability. The opportunity is there, Nigeria has huge business sector, we need to get together and see how to drive the economy of Africa to create jobs."
Meanwhile, a new report released at the Forum has called attention to the need for African countries to institutionalise cross-border collaboration as key factor in regional growth.
The report, Managing Transnational Infrastructure Programmes in Africa - Challenges and Best Practices, is intended to be a guide for policy-makers, sponsors and managers to help facilitate the delivery of transnational infrastructure programmes on schedule, at cost and at a high quality.
"The management of any complex infrastructure programme - a railway system, for instance, or an electricity production and distribution network - is difficult enough within an individual country .
The challenges, says the report, are tremendous with transnational programmes, and more so still in Africa, owing to the continent´s wide variation in languages, cultures, financial capacities and maturity of public institutions," it added.
"Infrastructure is essential for integrating regions, realising socio-economic potential and fast-tracking development in Africa," says Ibrahim Assane Mayaki, Chief Executive Officer of the NEPAD Planning and Co-ordinating Agency.
He added that the release of the report is an important contribution to identify best practices that will ultimately help facilitate and co-ordinate the implementation of regional priority programmes.
According to a statement from the Forum organisers, "There are myriad challenges when it comes to infrastructure projects in Africa, including finan cial, technical and regulatory alignments, as well as governance and human relations issues.
Difficulties may also have a historical dimension too: a legacy of mistrust or even conflict can often jeopardise co-operation between participating nations, and many countries lack a tradition of conducive environmental measures, such as enforcement of anti-corruption laws and the availability of stringent regulations on public-private partnerships."
Today´s sessions, which will mark the formal opening of the WEFA, are however open as they would be holding in plenary. Preceding the two leaders´ addresses are a plethora of other sessions, all holding at the Transcorp Hilton Hotel beginning from 8.30 a.m.
Some of the sessions are proffering solution to education challenges on how education systems can deliver a competitive academic workforce, seekin g solutions to developing collaborative networks; funding research and innovation and retaining and attracting entrepreneurs.
Simultaneously, there is going to be another interactive workshop on industries for impact which will be seeking solution to how African industries can realise the aspiration of moving up the value chain. The session is expected to map up current industries landscape in Africa, discuss key barriers to upgrading and also define innovation agenda.
The two special addresses by the Nigerian and Chinese leader session will be chaired by Klaus Schwab, Founder and Executive Chairman, World Economic Forum and is expected to focus on unlocking job creating growth and attempt to solve confounding development where Africa is the world´s second fastest growing region, yet only one in four Africans hold stable wage paying jobs.
The plenary that would feature among others, the President of Rwanda, Mr. Paul Kagame and Africa´s richest man, Alhaji Aliko Dangote, is also billed to proffer solution to how the continent´s growth strategies can be more inclusive.