UKEF commits £1.5bn credit facility to support bankable projects in Nigeria
Solomon Ezeme
The United Kingdom Department of International Trade (UKDIT), on Thursday announced the provision of a £1.5billion UK Export Finance (UKEF) credit facility in support of projects in Nigeria including those from the renewable or clean energy industry.
Chim Chalemera, Country Director, Nigeria UKDIT, who made this disclosure while delivering a keynote address at the 2021 Energy Sustainability Conference in Lagos, said the UK is providing this facility for private and public sector projects through the UK Export Finance (UKEF).
Chalemera said the fund is also available to support bankable projects in the clean energy space in Nigeria.
She charged interested investors to take advantage of the offer to grow the sector.
Addressing participants at the event with the theme, ” Accelerating Sustainable Energy Solutions through policy Implementation: Prospects and Limitation”, Chalemera said the facility can help Nigeria in reducing its Energy Poverty level, by providing finance for the sector’s growth, especially its renewable energy industry.
She explained that projects that will qualify to benefit from the facility must have more than 20% of its content derived from the UK. This content may include goods, services and other intangible assets provided under the contract.
She said, “Our commitment to this partnership is further demonstrated by UK Export Finance, the UK government’s export credit agency, who have allocated £2bn of direct lending to support clean growth projects.
“UKEF is focussed on 30 countries in Africa with a combined market risk appetite of £58bn and in Nigeria, UKEF have set aside £1.5bn which remains largely untouched – I should point out that local currency financing is available even in Naira
“UKEF financing is provided either via a bank guarantee, where UKEF acts as a credit enhancer, or in limited circumstances via direct lending.
“We are keen to see how UKEF can support projects in the clean energy space here in Nigeria and if you feel you have bankable projects and want to explore UKEF financing, please do get in touch with me or the team and we can introduce you to the UKEF team,” she said.
In his welcome address, the chairman, Energy Institute Nigeria, Mr. Osten Olorunsola, said the conference is aimed at generating discussions among key players and experts in the power sector for a sustainable energy future of the economy.
He added that the annual forum is organized to design pathway for a sustainable energy future in Nigeria and the African Energy space,
The two-day conference put together by the Energy Institute Nigeria started on Thursday through Friday, takes place at the Oriental Hotel, Lagos.
Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC), Mallam Kyari who was represented by Bala Wunti (Group General Manager, National Petroleum Investment Management Services), emphasized that, though Nigeria recognizes the global call for a transition from oil and gas to renewable energy, the country is yet to attain enough capacity needed to fit into the picture at the moment.
“The need to make energy cleaner presents a major challenge for policy makers.
“We know energy demand will surpass supply on the short run, but we need to first develop our storage capacity before we can fully transition to a complete dependence on renewables,” Wunti said.
He further said that oil demand will keep rising and Nigeria is focused on creating a balance between gas and oil production and consumption.
“Fossil fuel will continue to be relevant and I don’t think the world is ready to exit its use, anytime soon.
“By 2030, oil demand will surpass Pre-COVID demand.
“Malam Kyari is focused on creating the needed balance for Nigeria in both the production and consumption of our oil and gas,” he said.
