Energy
World Bank appraises Nigeria’s application of $120m mining credit
ABUJA – The World Bank has declared as satisfactory the implementation of about $120 million Sustainable Management of Mineral Resources Project for the revitalization of Nigeria’s minerals and metal sector.
The Bank with all it’s meticulous vetting and assessment of its programmes and projects in developing countries unabashedly praised Nigeria’s shot at a mining renaissance three decades after the demise of the sector. But, the commendation was largely anchored on what the bank regards as the prudent and judicious use of a $120 million grant it had extended to Nigeria as an incentive to resuscitating Nigeria’s solid minerals sector.
The grant, known as the Sustainable Management of Mineral Resource Project (SMMRP), is a home-grown intervention which was conceptualized after a National mining Policy dialogue in 2004. It became effective in April 2005 and was implemented through a seven-year period with an original closing date of June 2010. But the World bank granted an extension as compensation for some implementation delays which occurred earlier in the life of the project.
The $120m credit which has a 30-year repayment term with a 0.75 percent commission was taken as part of government’s emphasis on developing the non-oil sector to diversify the economy. It also conforms to the World Bank Group 2004 Joint Interim Strategy for Nigeria which was aimed at improving economic governance, creation of conditions for rapid private sector-led poverty reducing growth and enablement of local communities to take charge of their own development.
However, according to the agreement, the Federal government is expected to put in $7 million as counterpart funding, which sadly, till date, it has not.
In a document entitled: “Implementation, Completion and Results Report”, the global bank noted that in all the 15 financial and procurement audits conducted between the inception of the project in 2005 and its conclusion in May 2012, the SMMRP was satisfactory in all except the audit conducted in March 2007, in which it was rated moderately satisfactory.
The document jointly signed by the Vice President of the World Bank, Muktar Diop, Nigerian Country Director, Marie Nelie, Sector Manager, Christopher Sheldon, Project Team Leader, Ekaterina Mikhaylova, and the Primary Author, Sabine Cornelius, defended the overall satisfactory rating of the Federal Government’s Project Management Unit (PMU) which handled the project, noting that, “Despite the multiple disruptions and considerable constraints, the Project continued to function well.”
It further revealed that in the financial management of the credit, all audits were unqualified and cases of fraud were uncovered, adding that during implementation of the procurement, two-thirds of project’s procurement performance ratings were mostly satisfactory.
The report commended the Federal Government for taking over the funding responsibility of SMMRP-supported projects such as the Mining Cadastre Office and the Nigerian Institute of Mining and Geosciences, NIMG, Jos.
The Project which was flagged off in April 2005 had two main objectives, namely to increase government’s long-term institutional and technical capacity to manage Nigeria’s mineral resources in a sustainable way, and to establish a basis for poverty reduction and rural economic renewal in selected areas of the country through the development of income generating opportunities through small-scale and artisanal mining and diversifying away from oil sources of income.
According to the report, the project achieved improved governance and transparency outcomes in the well-performing state-of-the-art cadastre system, efficient management of mining licenses, strengthened institutional and technical capacity, legal and regulatory framework as well as private sector-led development, increased mining activities and increased annual royalty collection value among others.
The bank observed that the SMMRP has strengthened the capacity of key government institutions to better manage the sector. It has also improved governance and transparency which is largely responsible for the commendable inflow of foreign investments into the sector.
On governance and transparency, the report noted that the SMMRP had funded the establishment of a “well performing and world class Mining Cadastre Office. it is remarkable that Nigeria has one of the best Cadastre systems in Africa,” it stated, adding that at the closure of the Project, over 10,056 mining licenses had been issued. “This is more than twice the projections that was envisaged at the inception of the SMMRP,” it added.
The report further noted that the project has made very significant progress towards achieving its development objectives. This includes the completion of the airborne geophysical work and geo-chemical mapping studies of the country. It added that prior to the SMMRP, “the newly restructured Ministry of Mines and Steel Development (MMSD), which was housed in dilapidated physical premises and lacked adequately skilled staff.”
Indeed, the rejuvenation of mining into a tangible economic activity in Nigeria largely lies in the hands of small scale and artisinal miners, whose total number, according to a recent survey, may well be practised by two million Nigerians. But, their activities are haphazard, uncoordinated and destructive to the environment with no reclamation and add almost zero value to the central economy, as there has been no way of regulating them. The SMMRP looks at this challenge as one of its key area of focus.
In this regard, the report commended the Project Management Unit of the Ministry of Mines and Steel development for their exemplary efforts in supervising the implementation of small grants programmes in accordance with the recommendations of the World Bank safeguards audit, which has safety measures for workers as well as proper documentations for the $10 million grant given by the Project for the formalization of Artisanal and small scale miners (ASMs).
So far, not less than 400 mining co-operatives have been formed, all aimed at securing the $10 million grants. A workshop was organised for them in Jos last June so they could be taught how to draw from the grant.
It is believed that, when this category of miners get to work, according to the new mining regulation, blue chips mining firms would easily be wooed to bring in the big capital.
The Director of the Sustainable Management of Mineral Resources Project office, Mr Linus Adie, who was at the meeting, told the gathering that “this is the largest World Bank mining project, not only in Africa, but in the whole world. It came immediately after the Extractive Industry Review of the country.”
According to him, the 0.75 percent credit tied to the grant spread over 30 years repayment period, means it would be of very little burden to repay.
Industry watchers believe that Nigeria is making steady progress towards revamping the mining sector. All that is needed is a transparent running and regulation of the sector and the development of basic infrastructure that encourage big time miners to come in.
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.
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
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.”
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