Page 5 - DMEA Week 34 2022

DMEA COMMENTARY DMEA

Gas-based solutions Nigeria will need a significant amount of
The country intends to use a mix of fossil fuels outside assistance with respect to financing and
and renewable energy to achieve the goal of uni- private-sector investment to reach its targets,
versal power access. However, it will lean heavily Ahmed added.
on gas, which it possesses in abundance. So far, she said, the country has not had
Nigeria has the largest gas resources in enough of either to build up its domestic gas
Africa. Its proven reserves amount to more than infrastructure to the desired levels. “Access to
200 trillion cubic feet (5.7 trillion cubic metres), finance remains the biggest challenge to decar-
and officials in Abuja have said that the number bonisation,” she stated.
has the potential to triple with further explora-
tion of deepwater fields and other frontier prov- No clear solutions
inces. To this end, the federal government has It is not yet clear where Abuja hopes to obtain
launched a wide-ranging “Decade of Gas” initi- the necessary funds.
ative designed to promote domestic gas develop- The World Bank did announce at the August
ment and utilisation. 24 event that it intended to invest $1.5bn in
The gas programme has many natural syn- Nigeria to support clean cooking, renewable
ergies with the decarbonisation plan. Even so, energy and power sector reform projects. Like-
the strategy that Nigeria is looking to follow is wise, the US-based solar power company Sun
an expensive one. Africa said it was on track to finish negotiations
with the US Export-Import Bank (Eximbank)
High costs on a $1.5bn financing deal in the near future.
Finance Minister Zainab Ahmed acknowledged However, neither party divulged details
this, saying at the ceremony on August 24 that about the projects in questions nor said when
the cost of reaching net zero by 2060 was likely to funds might become available for ETP. Addi-
reach $1.9 trillion. This figure includes $410bn tionally, Reuters reported that Shubham Chaud-
beyond the country’s usual projected expendi- huri, the World Bank’s country director for
tures, equivalent to an extra $10bn per year, she Nigeria, had hinted that “policy and institutional
stated. reforms” might be a prerequisite for aid. ™

(Screenshots from energytransition.gov.ng)

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