Nigeria seeks initial $10bn for Energy Transition Plan

Vice President seeks funds to pursue balanced development and energy transition goals, recognizes ‘short term’ role for natural gas, and calls for clear African voice in climate talks

His Excellency Prof. Yemi Osinbajo, Vice President of Nigeria, laid out a broad agenda of power sector reforms and a new financing program at yesterday’s launch of his country’s Energy Transition Plan. He stated that Nigeria will need to spend $410 billion above business-as-usual spending to deliver on the plan by 2060, which translates to about $10 billion per year.

“Towards the implementation of the plan, we have an inter-ministerial Energy Transition Implementation Working Group, which I have the privilege of chairing,” said the vice president, speaking in a video address.

“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.”

Mr. Osinbajo reiterated long standing energy objectives and announced new initiatives, recognizing, he said, the role of natural gas in the short term for baseload energy capacity and to address a clean cooking deficit in the form of LPG.

“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,” he said.

“We are also launching an innovative, results-based, finance programme that focuses specifically on scaling up electricity access for productive uses,” he added.

“The Universal Energy Facility will provide grant payments to enable solar companies to expand their operations to small- and medium-sized enterprises across Nigeria while crowding in additional private capital.”

The vice president described the new finance facility as “an innovative, results-based, finance programme that focuses specifically on scaling up electricity access for productive uses.”

“I’d like to encourage solar companies in attendance today to engage with this innovative financing opportunity, which is being managed by Sustainable Energy for All,” he added, referring to the UN-founded organization.

Announcements amounting to some $3bn were made in support of the plan, according to a report from the African Media Agency.  

“We plan to commit over $1.5 billion towards the Energy Transition Plan on renewable energy, on power sector reforms, on clean cooking, and wherever opportunities arise,” said Shubham Chaudhuri, Nigeria Country Director, World Bank, in comments reported by the Vice President’s spokesman.

“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 final stages of discussion with US EXIM Bank on a $1.5 billion financing package,” said Adam Cortese, CEO, Sun Africa.

Energy & Utilities reported earlier this month that Nigeria had secured the $1.5 billion loan from the US Export-Import Bank (US-EXIM Bank) for the development of solar power infrastructure in the country.

In his remarks, Mr. Osinbajo listed key objectives in the new transition plan, including lifting 100 million people out of poverty in a decade, bringing modern energy services to the full population, and creating 840,000 jobs by 2060 while managing the expected long-term job loss in the oil sector due to global decarbonization.

He also alluded to the international context, anticipating the upcoming COP27 conference in Egypt.

“There is a clear need for African nations to engage more critically and vocally in conversations on our global climate future,” he said.

“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.”

It was at COP26 last year in Glasgow that His Excellency Muhammadu Buhari, President of Nigeria, announced his country’s ambition to achieve net-zero carbon emissions by 2060.