NIES: AfDB Pledges to Invest in Nigeria’s $410bn Energy Transition Plan
…Searches for Investors
The African Development Bank has vowed to support Nigeria’s gas transition project amidst calls to defund oil and gas projects by major foreign stakeholders.
AfDB’s president Akinwumi Adesina, represented by Mr. Lamin Barrow made the pledge at the 2023 Nigerian International Energy Summit, amidst demand for a just energy transition to net zero.
He said, “We recognize the bold reforms ongoing in the oil and gas sectors, as well as in the Nigeria Energy Transition Plan. If fully implemented, these would provide viable solutions for meeting the country’s energy needs and ensure the achievement of Net Zero by 2060.
“The African Development Bank is strongly committed to working with the FGN, other Development partners and the private sector to support the implementation of the Plan, whose total investment financing requirements, up to 2060, are estimated at $1.9 trillion.”
African countries suffer from huge energy poverty and seek to rely on their gas deposits as a transition fuel.
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Last year, Nigeria launched an energy transition plan which is projected to gulp at least $410bn to reach net zero by 2060 with annual spending of $10bn.
Nigeria also began to scout for partners to get an initial $10bn support package last year.
Shubham Chaudhuri, the Nigeria country director for the World Bank had said the lender plans “to commit over $1.5bn towards the energy transition plan on renewable energy, on power sector reforms, clean cooking, and wherever opportunities arise.”
The US Exim Bank will double the amount to $3bn.
Africa’s energy transition will require $100 billion annually in investments between 2020 and 2040.
The AfDB boss said, “From Africa’s perspective, the transition to clean energy involves not only decarbonization in line with the Paris Climate Agreement but also ensuring increased access to reliable, affordable and sustainable energy, to drive socio-economic development. Hence the emphasis on ‘Just Energy Transition’ without compromising energy security.
“Currently, the Bank is supporting African countries to implement their Intended Nationally Determined Contributions and the Bank will consider support for Paris-aligned gas projects that are embedded in the Energy Transition Plans of African countries.”
The AfDB said transitioning from diesel/heavy fuel oil and coal to gas generation would reduce emissions in Africa by about 20 per cent and 40 per cent, respectively.
“Estimates show that if Sub-Saharan Africa (excluding South Africa) were to triple its electricity consumption overnight using only natural gas, the additional carbon dioxide emission would constitute only 0.6 per cent to global emissions.
“Shifting from fuelwood, charcoal and kerosene to liquified petroleum gas (LPG) and natural gas for cooking will lower emissions while saving forests, biodiversity loss, and millions of lives, especially women and children.”
