Energy
$900bn Needed to Fix Energy Sector – President Jonathan
…FG sets up power intervention funds with N300bn as seed capital
… Local banks’ commitment to power sector hits N750bn
ABUJA – President Goodluck Jonathan Monday said Nigeria would need about $900 billion to properly address its energy sector in the next 30 years.
Jonathan, who was represented by Vice-President Namadi Sambo at the Nigeria power financing conference in Abuja, added that the largest chunk of the funds would have to come from the private sector.
According to him, in the power sector alone, $10 billion is needed for generation and distribution to add 5,000 megawatts to the national grid.
He reiterated his confidence in the ability of the global community of private and institutional financiers to meet up with its request for improved investment in Nigeria’s infrastructure expansion.
The president explained that the federal government had long realised its challenges to sustainably fund critical national infrastructure projects, hence its continued discussion with the private sector to address the situation.
Jonathan also disclosed that the government had set up an intervention fund to further support the growth of the power sector with about N300 billion initial deposit.
He however stated that the total size of the fund, which would be contributed in partnership with Development Financial Institutions (DFIs), was being worked on.
President Jonathan expressed his conviction in the ability of private and institutional financiers to extensively participate in the next phase of Nigeria’s power sector reform programme, with investments in gas-to-power initiatives, renewable energy sources as well as on-grid electricity generation, transmission and distribution projects.
“Under our national integrated national infrastructure master plan, we need a total of $2.9 trillion for our infrastructure development efforts in the next 30 years. The energy sector alone needs an infusion of about $900 billion during the period.
“Of this, a significant percentage is expected to come from the private sector. The power sector alone needs about $10 billion for CAPEX (capital expenditure) of generation and distribution companies in the next few years to enable us add additional 5,000 megawatts.
“Similarly, our transmission network continues to attract serious attention. The transmission grid requires an annual investment of about $1.5 billion for the next five years to ensure its reliability and stability. The Transmission Company of Nigeria (TCN) has commenced the aggressive implementation of the expansion blueprint funded by a mix of appropriation and funds from financial and multilateral institutions,” he explained.
The president further said: “It is the belief of this government that the private sector is suitable to effectively manage and attract the huge capital required for constant and affordable power to all Nigerians.
“This confidence on the Nigerian private sector stems from a track record of resilience, vibrancy, foresight and courage. In virtually all sectors of our national economy, this great show of enterprise, creativity and patriotism by our business community has kept our national economy strong, versatile and forward looking.
“When we started our divestment programme in the power sector and their foreign partners, there was a lot of pessimism. However, it was the dynamism of the Nigerian private sector that ensured the raising of over $2.5 billion that ensured the successful conclusion of the process.
“It is on this account that this government has continued to work with the private sector as the drivers of economic growth and national development. Beyond the incentives amply stated, we will continue to fine tune and improve the enabling environment for economic activity and social development.”
On the new contributory intervention funding, Jonathan said: “It is obvious that government alone cannot fund the infrastructural deficit in Nigeria, especially given the trend in the global economy.
“This conference therefore comes at an appropriate time given the opportunities in Nigeria. Nigeria has become an obvious destination of priority for Foreign Direct Investment (FDI).
“To enable industry players have access to cheap, long term funds, government is hereby setting up a ‘Power Sector Intervention Fund’. The financial resources for this special fund will be pooled from the federal government, Development Financial Institutions (DFIs) as well as local and global financial partners.
“The Coordinating Minister of Economy will give details of the operational structure of the bond. But, it will essentially provide avoidable refinancing and unending services to the sector. On its part, the federal government will make initial deposit of N300 billion and I call on all participants to join hand towards the success of this endeavour.”
Meanwhile, the Managing Director of Diamond Bank Plc, Dr Alex Otti, said as at December 2013, Nigerian banks had committed a total of N750 billion to support the power sector reforms.
Otti, who spoke on behalf of other local participating financial institutions in the Nigerian Electricity Supply Industry (NESI), reiterated that the banks would improve on their financial support to the sector for as long as the government is committed to transparent processes in the sector.
– THIS DAY
Energy
BP, Trafigura, Vitol Lead Global Offtake Of Dangote’s Refined Products
The Lagos based, 650,000-barrel-per-day Dangote Petroleum Refinery and Petrochemicals (DPRP) might be struggling for real acceptance in Nigeria’s domestic market, but the international markets appear to have embraced it with both hands.
As at Wednesday, November 6, 2024, three global oil dealers account for as much as 75 percent of refined products being lifted from the DPRP.
In a development touted as reshaping petroleum trading between Africa and Europe, Vitol Group, Trafigura Group, and BP Plc were listed by Bloomberg as the dominant buyers of fuels from the DPRP.
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Going by the data, it can be seen that the three global dealers accounted for the bulk of the plant’s shipments since flows began ratcheting up around the middle of 2024.
The report was backed by data from Precise Intelligence, a new oil-and-gas trading analytics firm based in Geneva.
The data showed refined products offtake from February 27 to October 10 with other customers, and indicated that the Nigerian market took 25 percent of total fuel purchases from the DPRP in the period under review.
Recall that the DPRP on starting operations, kick-started the production of diesel, aviation fuel, and LPG before subsequently progressing to the production of Premium Motor Spirit (PMS) (petrol).
The management of the DPRP has been consistent in expressing confidence that as soon as it becomes fully operational, it would peak at processing up to 650,000 barrels a day of crude into products including gasoline and diesel.
The implication is that at its peak, the DPRP would be the biggest single plant in Europe or Africa, conferring on it the capacity to reshape the regions’ oil and fuel trading.
Oil industry pundits note that the coming on stream of the DPRP has already trimmed a glut of Nigerian crude.
Analysis of the report showed that the refinery has loaded almost 6 million tons of fuel since starting up.
This is equivalent to almost 45 million barrels, loading rates averaged about 35,000 tonnes a day in October, its data showed.
The DPRP itself said late last month that the refinery had reached processing rates of about 420,000 barrels a day of crude.
Stakeholders are paying close attention, which sees the composition of fuel cargoes loading from the DPRP closely watched because it offers clues into where the refinery is at in terms of starting up different processing units.
On the products sold, the figures show that automotive gas oil — commonly known as diesel — is the largest cargo type being lifted, accounting for the highest proportion of shipments. This is followed by fuel oil, which ranks second in terms of volume.
Together, these two products make up more than 60 percent of the total output being collected from the plant.
Other significant fuel types being processed include gasoline, which is used for cars and other light vehicles, and jet fuel, primarily utilised by the aviation industry for aircraft.
Energy
Minister of Power, Adelabu Champions Mini-Grids Amid Northern Power Crisis
In the wake of a prolonged power crisis impacting Northern Nigeria, Minister of Power Adebayo Adelabu visited the Zawaciki 1MWp mini-grid project in Kano, underscoring the potential of decentralized renewable energy solutions to alleviate regional power shortages.
The project, operated by Bagaja Renewables, provides daytime electricity to the Gida Dubu community, offering a vital source of power as the region faces widespread blackouts.
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Sadiq Zakari, Managing Director of Bagaja Renewables, welcomed the Minister to the facility and highlighted the critical timing of the visit.
“Bagaja Renewables had the distinct honor of welcoming the Honorable Minister of Power to the Zawaciki 1MWp interconnected mini-grid,” Zakari said.
“This visit comes at a critical time, as Northern Nigeria endures a prolonged blackout, underscoring the urgent need for alternative power solutions.
The Zawaciki mini-grid has been instrumental during this crisis, providing at least 9 hours of daytime electricity to the Gida Dubu community, demonstrating the potential of renewable energy in addressing the region’s energy needs.”
Minister Adelabu praised the Zawaciki project as a model for interconnected mini-grids nationwide, noting its role as a sustainable solution for communities grappling with unreliable power supply.
“The Honorable Minister expressed admiration for the Zawaciki project, recognizing it as a viable proof of concept for interconnected mini-grids across Nigeria,” Zakari stated.
“He emphasized the importance of such initiatives and called on state governors and other key stakeholders to support efforts to decentralize and strengthen the nation’s power infrastructure.
By backing projects like Zawaciki, stakeholders can play an instrumental role in reducing reliance on the national grid and ensuring a more stable power supply for local communities.”
Zakari underscored the transformative potential of private-sector renewable energy projects in Nigeria’s power landscape.
He said, “As we have witnessed here at Zawaciki, private-sector-driven renewable energy solutions can transform Nigeria’s energy landscape. With the right policies and support, we can empower communities and enhance energy resilience, even in times of national power instability.”
In addition to the Zawaciki project, Bagaja Renewables is developing several renewable energy initiatives across Northern Nigeria. Among these are:
Barhim Estate, Katsina: A residential power initiative aimed at expanding energy access for households in the region.
Kura-Karfi Commercial Cluster, Kano: Focused on delivering clean and reliable power to commercial areas, this project aims to support local businesses and stimulate economic growth.
Kafin Hausa, Jigawa: With site fencing completed, Bagaja Renewables is preparing to begin technical design and engineering work for a mini-grid in Kafin Hausa, slated to start construction soon.
Zakari said, “These projects represent Bagaja Renewables’ unwavering commitment to building a resilient, decentralized, and renewable-powered energy future across Northern Nigeria.
“Bagaja Renewables is dedicated to collaborating with the government and stakeholders to scale up renewable energy solutions that will support communities, industries, and essential services.
“We believe that decentralized power generation is the future for Nigeria, and we are eager to contribute to a sustainable, reliable, and inclusive energy system for all.” he added
Energy
Power Restored In Four Northern States After 10-Day Blackout
Power has been restored across Plateau, Bauchi, Gombe, and Benue States, bringing relief to residents who endured a 10-day blackout.
The Jos Electricity Distribution Company confirmed that electricity was reinstated around 7:20 p.m. on Wednesday, prompting celebrations in Jos, the Plateau State capital, and other affected areas.
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The prolonged outage was caused by the tripping of a major 330kV transmission line between Benue and Enugu states, leaving several northern states without power.
The blackout severely impacted daily life and economic activities, with residents expressing frustration over the disruption to businesses, healthcare services, and personal livelihoods.
In response, President Bola Tinubu took swift action, summoning Minister of Power Adebayo Adelabu and National Security Adviser Nuhu Ribadu to address the crisis.
Presidential Adviser Bayo Onanuga disclosed on Monday that President Tinubu directed the Ministry of Power and relevant agencies to expedite restoration efforts.
“President Tinubu is deeply concerned about the reports of vandalism and deliberate destruction of essential power infrastructure,” Onanuga said in a statement.
“The President has tasked TCN engineers with bringing immediate relief to the affected states and implementing a long-term solution to prevent future outages.”