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International agencies invest N187bn in Nigeria’s energy

By on June 27, 2013

NIgeria’s development partners have invested about N187.44 billion ($1.17 billion) in the country’s energy sector as at December 2012, under the Country Assistance Framework, CAF.

The partners, according to the CAF draft document for May 2013, are the African Development Bank, Agence Francaise de Development, Canadian International Development Agency, Department for International Development, Embassy of Japan, Japan International Cooperation Agency, and Embassy of the Republic of China.

Others are the European Union, High Commission of India, International Monetary Fund, United States Agency for International Development, United Nations System and the World.

The report, which was obtained by Vanguard, put the total commitment of the development partners as at the end 2012 at US$13.018 billion, with the Nigeria’s energy and power sector accounting for nine per cent of the total.

According to the report, CAF is the common strategic approach of Nigeria’s development partners in support of the government’s development plans.

It noted further that CAF is derived from the programme priorities articulated in Vision 20:2020 and its implementation strategy, the Transformation Agenda (TA) 2011 – 2015.

In the power sector, the report said the partners will provide analytical and advisory activities in support of prioritizing sector investment in a context of limited financial resources.

The document further noted that the partners under the CAF programme will also assist the government in covering the payment risk of the Nigerian Bulk Electricity Trading Company, especially as it enters into a Power Purchase Agreements with Independent Power Producers, IPPs.

The partners will also support the Nigerian Bulk Electricity Trading Company, NBETC, to establish a culture of excellence and transparency, to give investors the confidence to develop cost-efficient electricity generation projects, the document stated.

The document noted further that “To improve the capacity and reliability of its generation, transmission and distribution systems, Nigeria needs to: ensure that the policy and reform agenda continues to move forward; institute cost-reflective tariffs and appropriate commercial practices.

“Nigeria should increase transparency in government investment decisions, sector subsidies and award of power purchase agreements; improve accountability by private operators and develop the Sustainable Energy for all (SE4all) agenda for rapid expansion of electricity access and related analytical data and reports.”

The report listed internal violence, insecurity, and uncertainty ahead of the 2015 general elections, economic volatility and fluctuation in the prices of oil in the international market as major risk factors that will hamper the implementation of the CAF programmes.

 

 

 

[Vanguard]