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Energy Transition: Osinbajo Proposes Debt-for-climate Swap Deal

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Vice President Yemi Osinbajo has proposed a Debt-For-Climate (DFC) Swap deal in order to ensure a just energy transition for African countries.

Laolu Akande, Senior Special Assistant to the President on Media and Publicity, Office of the Vice President, disclosed this in a statement on Friday in Abuja.

Osinbajo is in Washington, U.

S.  to seek global partnerships and support for Nigeria’s recently inaugurated Energy Transition Plan(ETP).

The vice president delivered a lecture on Thursday, explaining the DFC concept on a just and equitable energy transition for Africa at the Center for Global Development in Washington D.

C, U.S.

“Debt for climate swaps is a type of debt swap where bilateral or multilateral debt is forgiven by creditors in exchange for a commitment by the debtor to use the outstanding debt service payments for national climate action programmes.

“Typically, the creditor country or institution agrees to forgive part of a debt, if the debtor country would pay the avoided debt service payment in a local currency into an escrow or any other transparent fund and the funds must then be used for agreed climate projects in the debtor country.

“Increase the fiscal space for climate-related investments and reduce the debt burden for participating developing countries.

“For the creditor the swap can be made to count as a component of their Nationally Determined Contributions (NDC).”

According to Osinbajo, there are significant policy actions necessary to make the deal acceptable and sustainable.

The vice president also proposed the greater participation of African countries in the Global Carbon Market while exploring financing options for energy transition.

He said there was a need to take a comprehensive approach in working jointly towards common goals, including the market and environmental opportunities presented by the financing of clean energy assets in growing energy markets.

“In addition to conventional capital flows both from public and private sources, it is also essential that Africa can participate more fully in the global carbon finance market.

“Currently, direct carbon pricing systems through carbon taxes have largely been concentrated in high and middle-income countries.

“However, carbon markets can play a significant role in catalysing sustainable energy deployment by directing private capital into climate action, improving global energy security, providing diversified incentive structures, especially in developing countries, and providing an impetus for clean energy markets when the price economics looks less compelling – as is the case today.”

Osinbajo encouraged developed countries to support Africa to develop into a global supplier of carbon credits, ranging from bio-diversity to energy-based credits.

The vice president said that the central thinking for most developing countries was the issue of a just transition with two, not one, existential crises, the climate crisis and extreme poverty.

“The clear implication of this reality is that our plans and commitments to carbon neutrality must include clear plans on energy access if we are to confront poverty.

“This includes access to energy for consumptive and productive use and spanning across electricity, heating, cooking, and other end-use sectors.

“Nearly 90 million people in Asia and Africa who had previously gained access to electricity can no longer afford to pay for their basic energy needs; the inflationary pressures caused by the COVID-19 pandemic and other macroeconomic trends have been further exacerbated by the ongoing war in Ukraine.’’

He cautioned that limiting financing of gas projects for domestic use would pose a severe challenge to economic development, delivery of electricity access and clean cooking solutions, and the scale-up and integration of renewable energy into the energy mix.

The vice president said that ETP was designed to tackle the dual crises of energy poverty and climate change and deliver SDG-7 by 2030 and net-zero by 2060 while concentrating on the provision of energy for development, industrialization, and economic growth.

Osinbajo identified some double standards evident in the response to the current energy crisis by many countries in the global North.

“Today excluding South Africa, the remaining one billion people in Sub-Saharan Africa are serviced by an installed capacity of just 81 gigawatts. Sub-Saharan Africa has contributed, based on information that is already out there, less than one per cent of cumulative CO.2 2 emissions.

“By comparison, the U.S.  has an installed capacity of 1,200 gigawatts to power a population of 331 million people, while the UK has 76 gigawatts of installed capacity for its 67 million people.

“The per capita energy capacity in the UK is almost fifteen times than in Sub-Saharan Africa,” he said.

The vice president then took questions around the theme of a just energy transition and the recently launched Nigerian Energy Transition Plan.

Members of the Energy Transition Implementation Working Group (ETWG) present at the lecture included the Minister of Works and Housing, Babatunde Fashola, Minister of Finance, Budget and National Planning, Zainab Ahmed and Minister of Environment, Mohammed Abdullahi.

Others were Director-General of the National Council on Climate Change, Salisu Dahiru, Nigeria’s Ambassador to the U.S., Uzoma Emenike, Special Representative of the UN Secretary-General for Sustainable Energy for All (SEforALL), Ms Damilola Ogunbiyi.

The Managing Director of Niger Delta Power Holding Company Limited, Chiedu Ugbo and other senior government officials were also at the lecture.(NAN)

Business News

FG Targets 350GW Electricity Generating Capacity by 2043

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By Tony Obiechina, Abuja 

The Minister of Budget and Economic Planning Sen. Abubakar Atiku Bagudu has reaffirmed the commitment of the Federal Government towards achieving the desired target of 350GW electricity generating capacity by the year 2043.     

The Minister, who spoke during a briefing session Thursday, in his office in Abuja, by top management staff of the Nigerian Electricity Management Service Agency (NEMSA)  said that it would only be possible if all hands were on deck towards realizing the targets.

He informed that ‘’the present administration of President Bola Tinubu,  has prioritized the Power Sector as the topmost priority of all the National Integrated Infrastructure Master Plan (NIIMP) assets classes” 

He added that over the years, the government had also embarked on several reforms to turn around the power sector, the latest  being the new Electricity Bill.

Bagudu pointed out that ‘’the electricity law repeals the Electricity and Power Sector Reform Act of 2005 and consolidates the law relating to the Nigerian Electricity Supply Industry (NESI).

 The Minister noted that the Nigeria Electricity Act 2023 prioritized the implementation of tariffs that accurately reflected the cost and service provided as well as promoted competition in the electricity sector through the use of contracts and rules’’. 

He further stated that the main objective of the law was to enhance the efficiency and effectiveness of the Nigeria electricity industry, adding that NEMSA was one of the key players in the Nigerian Electricity Supply Industry (NESI) charged with the responsibility of carrying out the enforcement of technical standards and regulations, technical inspection, testing, and certification of all categories of electrical installations across the country to ensure stable, safe and reliable electricity networks.

Bagudu added that the agency strived to ensure zero incidences of electrical accidents, energy accountability, eliminate substandard electrical equipment and material and rid the system of quack electrical installation personnel contractors. 

Bagudu explained that the agency had embarked on some of the activities, which included: an inspection of over 15,931 electricity projects across the country, out of which 10,692 had been certified fit for use by NEMSA, monitoring of 12,114 existing networks and power systems nationwide; Inspection of 3,255 electrical installations at factories across the country, among others.

In his brief, the MD/CEO of NEMSA & Chief Electrical Inspector of the Federation, Engr. Aliyu Tukur Tahir said that their priority was to have a steady light electricity network that was stable, safe, and reliable. “We also strive to ensure zero incidences in the electricity networks, energy accountability, and eliminate substantial electrical material and equipment across our network in the country”.

He pointed out that “electricity has become part of our everyday life, it is a great benefit to all of us but the electricity we use is associated with a lot of hazards and these hazards are so real that they can even affect professionals themselves; so to mitigate these hazards, number of technical standards and revelations are now developed and that was why this agency was established to carry out enforcement of technical inspection, testing and certification before they are allowed to be used”.

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Business News

BPP, AfDB Partner to Strengthen Energy Sector Reforms

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 The Breau of Public Procurement (BPP) and African Development Bank (AfDB) have entered into partnership to strengthen on-going reforms in the energy sector to improve productivity and add value to the economy.

According to a statement by Janet McDickson, Head,  Media, BPP, the Director General of BPP, Mamman Ahmadu, made this known on Tuesday, while welcoming the AfDB team to his office.

The AfDB team was led by Dr Patrick Owuori, the Regional Procurement Coordinator.

Mamman said that emphasis should be placed on quality, while implementing the much needed energy sector reform, adding that  government projects needed to be long-lasting and sustainable.

He said that sufficient rules should be made on how the money the organisation was putting on the table for the project was to be expended.

The director general said that BPP was working assiduously to achieve the Public Procurement Act, 2007.

“Procedures and strategies are put in place for spending government funds that will give value for money,” he said.

According to him, BPP  was also in collaboration with the World Bank to put in place an e- procurement mechanism for transparency in all procurement processes.

“We are designing a capacity building sector to design customises areas to train procurement officers in skills and knowledge that will match global best practices,’’ he said.

Mamman said that the BPP needed more funding to design procurement capacity that could work with the energy sector and  all procurements across board.

He, however, said that BPP’s partnership with AfDB would go a long way in enhancing the procurement sector engagement.

The leader of the delegation and Regional Procurement Coordinator, AfDB, Dr Patrick Owuori said, the new government of President Bola Tinubu, in the bid to get the power sector improve its services, had requested AfDB to develop and redesign a template to improve the energy sector.

Owuori said that the task would take them between six and nine months to redesign.

He said that the entire project would cost $1billion, with the timeline between 2023-2024.(NAN)

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Energy and Power

Nationwide Blackout As Power Grid Collapses Again

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Nigeria has witnessed yet another collapse of the power grid resulting in nationwide blackout.

Electricity supply plummeted from a high of 3,594.60 megawatts (MW) around 1:00 a.m. to an alarming 42.7MW on Tuesday, 19th September, 2023.

As of mid-day today, the only operational power plant on the grid was the Delta Power plant, generating 41.

00MW, while Afam contributed a mere 1.
7MW.

This occurrence follows closely on the heels of two recent grid collapses in just over a 12-hour period, plunging the nation into complete darkness.

Last week Wednesday, Nairametrics reported the collapse of the nation’s electricity grid throwing the country into a blackout.

The Minister of Power attributed the collapse of the grid to a fire outbreak at the Kainji/Jebba station.

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