Banks’ branch managers perch on N25bn diesel consumption to hold back

For fear of losing their loot from diesel money, managers of bank branches may be pushing back on plans to replace generators with solar systems by banks across the country.
But experts in the solar energy sub-sector also blame the pushback on suppliers of fossil fuel for generators.
“I cannot say categorically that bank branch managers are the ones holding back. As a former banker I know such decisions are taken at the Executive Management level,” Segun Adaju, Chief Energizing Officer, Consistent Energy Limited, said.
“But my experience in deploying solar in organisations is that we face a bit of pushback from vested interests in fossil fuel supplies for generators. There is the perception that if solar displaces generators, some beneficiaries of diesel supplies will lose revenue,” Adaju said in an emailed response to BusinessDay.
Wema Bank (the only bank to disclose specific expenditure on diesel) spent N324.88 million as cost of diesel in the half year 2017 period, according to data from the bank’s financial statement for the period. The bank has 140 branches.
There were a total of 5470 bank branches in Nigeria as at 2015 according to the most recent National Bureau of Statistic (NBS) report on the sector, and extrapolating for the industry as a whole means about N25 billion may have been spent on diesel procurement by banks operating in the country last year, according to Businessday calculations.
Sources tell BusinessDay that banks branch managers are said to be benefiting from the money allocated for diesel purchase by the board.
This has spiralled to local banks not willing to assist solar energy investors to develop the country’s solar energy sub-sector.
Taiwo Oyedele, head, Tax and Regulatory Services, PWC, said If this development is true then there are three possible reasons, one of which he said that such bank managers are making money off their banks for running generators, or they are just resisting change due to uncertainties over reliability of solar energy.
“Another reason could be that saving energy cost is not a performance measurement for the branch managers hence they do not see any direct benefits accruing to them,” Oyedele said.
Analysts have blamed the banks inability to grant loans to investors for the slow pace of solar energy investment in the country.
Johnson Chukwu, managing director/CEO, Cowry Asset Management limited said pushback by bank branch managers to replace generators with solar systems in banks across the country could be put into perspective to mean that such branch managers are benefiting from the management cheque and would not want the bank to change to solar system.
He said some of the managers may also not believe the cost efficiency of solar systems or may have had no experience with solar panels and battery.
However, the Federal Government recently released N2 billion through the Bank of Industry (BOI) for access by investors in the solar sub-sector.
Ayodeji Ebo, managing director, Afrinvest Securities limited said, “In my view, I really don’t believe the bank managers can hold back the implementation of solar system to replace generators as directives to implement policies like this comes from the head office and contracts for this kind of projects will be awarded by the Board. Once the Board or Executive Management has done a proper feasibility study that shows the cost-benefit analysis, a final decision will be communicated to the branches.”

 

HOPE MOSES-ASHIKE