Page 10 - AfrElec Week 10

AfrElec OFF-GRID AfrElec
AfDB supports Nigeria’s struggling power sector
NIGERIA
THE African Development Bank has agreed to lend $200mn to Nigeria’s Rural Electric- ity Agency (REA) to boost access to power for domestic, commercial and industrial customers in rural areas.
The funds will be used to fund off-grid pro- jects at eight universities, 20,000 small compa- nies and 105,000 rural households.
The cash will kick-start the REA’s Nigeria Electrification Project (NEP), which would be the largest single investment stream in Nigeria’s off-grid sector.
It aims to use mini-grids, solar home systems and other distributed solutions to improve access to power.
REA managing director Ahmad Salihijo said that the project would involve four programmes: the $70mn Solar Hybrid Mini Grids minimum subsidy tender (MST); the $20mn Energy Effi- cient Appliances for Productive Use Programme; the $100mn phase three of the Energising Edu- cation Programme; and $10mn for technical assistance and capacity building.
“NEP-AfDB will contribute to more than 500,000 Nigerians in 105,000 households in off- grid or underserved communities, having access to electricity, an increase of 76.5 MW in installed power generation capacity (of which 68 MW will be from solar generation alone),” said Salihijo.
“Eight universities obtaining access to relia- ble sources of energy; 20,000 micro, small and medium enterprises (MSMEs) either supported
by or supplied with productive use appliances and equipment; and the avoidance of 1.69 mil- lion tonnes of CO2 emissions in line with Nige- ria’s commitment to combatting climate change,” he continued.
Wale Shonibare, acting Vice-President, Power, Energy and Green Growth Complex of the AfDB, noted that 80mn people lacked access to sustainable and affordable sources of electricity.
Shonibare said that the country’s national access to power percentages were 55% nation- wide and 39% in rural areas.
If the government is to achieve universal access to electricity by 2030, Nigeria will need to connect between 500,000 and 800,000 house- holds per year.
He said Nigeria still struggled to generate and distribute 4,000 MW to over 180mn of its popu- lation, leaving over 80mn people without access to power.
Indeed, he said that as well as the new $200mn REA project, the AfDB was providing $410m for the National Transmission Expansion Programme (NTEP), where the bank is working with national TSO TCN,
Shonibare said the bank had commenced discussions with power distributors as the AfDB seeks to invest in the discos. The bank is also supporting the 1-GW Jigawa Solar Procurement Programme and has so far provided $1mn to support feasibility studies for phase one.™
GAS-FIRED GENERATION
Nigerian government issues sovereign guarantees for Chinese pipeline credit
NIGERIA
NIGERIA’S federal government has pledged to provide a sovereign guarantee covering most of the costs of building the Ajaokuta-Kaduna-Kano (AKK) natural gas pipeline, which will feed gas into a new generation of thermal power plants (TPPs).
Last week, Finance Minister Zainab Ahmed reported that the government would issue guar- antees worth $2.59bn for a loan from Sinosure, the Chinese government’s export credit agency.
This loan will carry an interest rate of LIBOR plus 3.7% and will have to be repaid in 12 years, including a grace period of three years, she said.
According to previous reports, Sinosure is
acting as guarantor for the loan on the Chinese side. The funds will come from two Chinese lenders, the Bank of China (BoC) and the Indus- trial and Commercial Bank of China (ICBC). The Chinese credit will cover 85% of the total cost of building the AKK pipeline, she added. State-owned Nigerian National Petroleum Corp. (NNPC) will pay the remaining 15% of expenses, she stated.
Ahmed said the Nigerian government saw the pipeline project as a worthwhile endeavour.
“We have done an extensive review of this project and we are satisfied that the cash flows from the Ajaokuta-Kaduna-Kano gas pipeline
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w w w . N E W S B A S E . c o m Week 10 12•Month•2020