March 2, 2024

World Bank, US EXIM Bank commit $3bn to take-off of Nigeria’s energy transition plan

…VP Osinbajo seeks $10B initial support package from global partners

Oredola Adeola

The Nigerian Government has launched the country’s Energy Transition Plan, a road map dedicated to achieving net-zero emissions by 2060 specifically meant to tackle the dual crises of energy poverty and climate change.

The roadmap which highlights Nigeria’s leadership role in enabling a just and equitable climate future for Africa was launched in a virtual conference by Professor Yemi Osinbajo, Vice President, with development partners on Wednesday.

According to Prof. Osinbajo, Africa’s increasing energy gaps require collaboration to take ownership of the continent’s transition pathways and the action should be decisive and urgent.

Speaking in his remark during the virtual launch, VP said that Nigeria needs to take decisive action on energy transition, added that the country  cannot afford to delay  in attracting the right partner and making informed business decisions in benefiting from the global call for cleaner energy.

He said the plan was designed to tackle the dual crises of energy poverty and climate change and deliver SDG7 by 2030 and net-zero by 2060, while centering the provision of energy for development, industrialization, and economic growth.

Osinbajo said, “For Africa, the problem of energy poverty is as important as our climate ambitions. Energy use is crucial for almost every conceivable aspect of development. Wealth, health, nutrition, water, infrastructure, education, and life expectancy are significantly related to the consumption of energy per capita.”

The VP  said that Nigeria would need to spend $410 billion above business-as-usual spending to deliver our Transition Plan by 2060, which translates to about $10 billion per year. This, according to him, is the significant scale of resources required to attain both development and climate ambitions.He further said, “The average $3 billion per year investments in renewable energy recorded for the whole of Africa between 2000 and 2020 will certainly not suffice.

“At the inter-ministerial Energy Transition Implementation Working Group, we are currently engaging with partners to secure an initial $10 billion support package ahead of COP27 along the lines of the South African Just Energy Transition Partnership announced at COP26 in Glasgow.”
Osinbajo in his remark on Africa’s energy poverty disclosed that the current lack of power hurts livelihoods and destroys the dreams of hundreds of millions of young people.
He said, “And although Africa’s current unmet energy needs are huge, future demand will be even greater due to expanding populations, urbanization, and movement into the middle class.

“It is clear that the continent must address its energy constraints and would require external support and policy flexibility to deliver this. Unfortunately, in the wider responses to the climate crisis, we are not seeing careful consideration and acknowledgment of Africa’s aspirations.”

Underscoring the importance of collaboration, the Vice President then noted that “we developed our Energy Transition Plan to engage with the rest of the world in a serious, thorough and data-backed manner.”
Prof. Osinbajo explained that “there is a clear need for African nations to engage more critically and vocally in conversations on our global climate future.
“More importantly, we need to take ownership of our transition pathways and design climate-sensitive strategies that address our growth objectives. This is what Nigeria has done with our Energy Transition Plan.”
“The plan was designed to tackle climate change and deliver SDG7 by 2030 and net-zero by 2060 while centering the provision of energy for development, industrialization, and economic growth.”
According to him, “we anchored the plan on key objectives including lifting 100 million people out of poverty in a decade, driving economic growth, bringing modern energy services to the full population, and managing the expected long-term job losses in the oil sector due to global decarbonization.
“Given those objectives, the plan recognizes the role natural gas must play in the short term to facilitate the establishment of baseload energy capacity and address the nation’s clean cooking deficit in the form of LPG.
“The plan envisions vibrant industries powered by low-carbon technologies; streets lined with electric vehicles and livelihoods enabled by sufficient and clean energy.”
On other aspirations of the roadmap, Prof. Osinbajo explained that “the plan has the potential to create about 340,000 jobs by 2030, and 840,000 by 2060. It also presents a unique opportunity to deliver a true low-carbon and rapid development model in Africa’s largest economy.”
“We are currently implementing power sector initiatives and reforms focused on expanding our grid, increasing generation capacity, and deploying renewable energy to rural and underserved populations.”

REMARKS BY PARTNERS

Participants who made remarks at the virtual launch commended the Federal Government for the pioneering role in the region. They however emphasized on  the need for data-driven country-level energy transition plans that recognise the unique pathways each country would need to take in order to achieve a just, inclusive and equitable energy transition for all.

Mr. Shubham Chaudhuri, Nigeria Country Director for World Bank said the bank plans “to commit over USD 1.5 billion towards the Energy Transition Plan on renewable energy, on power sector reforms, on clean cooking, and wherever opportunities arise.”
Mr. Adam Cortese, CEO, Sun Africa stated that “the launch of Nigeria’s Energy Transition Plan has further accelerated our efforts, proving Nigeria to be fertile grounds for investments in the sector. We are in the final stages of discussion with US EXIM Bank on a USD 1.5 billion financing package.”