Nigeria’s current power tariffs structure is not only a disincentive to investors who are desirous of investing in the power sector, but also not cost effective.
The Africa Development Bank (AfDB), President, Akinwumi Adesina said this in Abuja while speaking with State House Correspondents after meeting with President Muhammadu Buhari at the Presidential Villa, Abuja.
Adesina, who disclosed that the bank is also mobilizing finances for the development of the country, added that the African Investment Forum which the ADB held last year, was able to mobilize about $38.7 billion of investments to African, while $7.1b of the fund came to Nigeria in less than 72 hours of the event.
“We have also invested heavily in the northeast of Nigeria, we have put in almost $258 million to support the rehabilitation both in terms of health, education, sanitation, and water. And also skills as a way of reviving areas that have been battered.
He disclosed that Nigeria’s contribution under the last general capital increase of the bank currently stands at $360 million.
“ But we lend to Nigeria $4.5 billion, almost 15.5 percent. Every dollar that Nigeria gives to the bank, we lend $15 in return, so its a great investment.
“I assured Mr. President that under the new general capital increase of the bank, we are talking to our investors about this, so if we get enough money, hundred of people will be connected to electricity.
He listed three basic areas that must be addressed if Nigeria must attain success in power supply to include amongst other, the development of a cost-effective tariff structure.
“I think we need to get the tariff structure because if you don’t have good cost-reflective tariff structure, investments from private sector become very difficult in the energy sector.
Adesina who explained that the ADB has invested $400m in the Transmission Company of Nigeria, TCN, also listed the challenges of liquidity in the power sector which he said “ must be addressed”
“We in the bank have invested over $400 million in the transmission company of Nigeria to support it, we have also provided risks guarantees to the Nigeria Bulk Electricity Trading NBET, to be able to guarantee the risk of non-repayment to free up the liquidity constraints”
“But at the end of the day, it’s to diversify the energy subsets that we have. We have gas here, we should use a lot of those gas, we also have hydro and solar.”
The ADB President said the bank has also is investing heavily right in the north, including the development of solar projects, in Jigawa state.
“So know, God is good to Africa and He gave us a tremendous amount of sunshine, water, everything is good for Africa, all we need to do is take a cable and connect to the sun and we will be fine. So we just have to optimize the renewable energy potential that we have.”
“ Quite a lot has happened at the bank in the last three years. We have 60 operations in Nigeria for a total of $4.5 billion and about $2.8 billion of that is in the private sector in the banking industry, financial sector, in particular about $1.7billion in the public sector.
