The African Development Bank has announced its intention to invest $1 billion in a policy-based operation fund with a significant energy component aimed at supporting the ongoing power sector reforms in Nigeria.
This was disclosed by the vice president on Power, energy, and climate change at the AfDB, Kevin Kariuki at the 8th edition of the Africa Energy Market Place, held in Abuja on Thursday, according to Businessday.
According to Kariuki, the Bank is aware of the scale of challenges in Nigeria’s energy sector, from addressing the lack of access to electricity and restoring and upgrading the power system to meet a load exceeding 20 gigawatts which are believed to be genuine demand by 200 million Nigerian citizens.
He said, “Hence, we must have all our hands (i.e. all stakeholders) on the deck empowered by the new Electricity Act, 2023. At AfDB we put our money where our mouth is, as is manifested by the fact we will be shortly seeking board approval for a $1 billion policy-based operation (PBO) with a significant energy component aimed at supporting the ongoing power sector reforms triggered by the new Electricity Act.
“The timing of the AEMP and the proposed policy-based lending focused on the energy sector is therefore not coincidental. We will finance the policy recommendations to actualize the expected outcomes from the National Integrated Electricity Policy and Strategic Implementation Plan.”
In addition, he pointed out that good policies are a driver of sustainable investment, and the Bank’s focus is to support an environment conducive to least resistance.
He noted the enabling environment will maximize the value of ongoing investments, including the $256.2 million Nigeria Transmission Expansion Project which entails the construction of 500km of transmission lines and four substations with a capacity of over 1000MVA; and the $200 million Nigeria Electrification Project, which will build 150 mini-grids.
“Nigeria is part of our flagship USD 20 Billion Desert to Power Initiative, which aims to generate 10,000 MW of solar power across 11 countries in the Sahel region to provide power to 250 million Africans. This portends great promise for increasing the proportion of renewable energy in Nigeria’s energy mix.
“Through this multi-prong approach of supporting policy development, financing critical power sector infrastructure, and providing technical assistance and capacity building, we strongly believe that our partnership with the Federal Government will ensure a viable and sustainable power sector will yield the desired result,” he said.
Meanwhile, the chairman of the Nigerian Electricity Regulatory Commission, Sanusi Garba said that the bankrupt state of Nigeria’s electricity distribution companies was a big problem for the Nigerian energy sector.
He said that a strong political will and decisions that have an impact on the wider public are needed for the implementation of the Electricity Sector Policy Act.
