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W’Bank Gives Nigeria N107.4bn Loan for Rural Electrification

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  • W’Bank Gives Nigeria N107.4bn Loan for Rural Electrification

The World Bank on Tuesday announced the provision of a $350m loan (N107.4bn at the official exchange rate of N307 to a dollar) for the development of rural electrification projects in Nigeria.

It also announced Nigeria’s Rural Electrification Agency as the implementing organisation of the Federal Government that would be in charge of the loan.

The bank stated that 80 million people in Nigeria were without access to electricity, while about 600 million people in sub-Saharan Africa did not have power supply in their various communities.

The global financial institution disclosed this at a press conference that was held during the ongoing ‘Action Learning Event on Upscaling Mini Grids for Low-cost and Timely Access to Electricity’ in Abuja.

The Country Director for Nigeria, World Bank, Rachid Benmessaoud, said the $350m loan was given to the government, but noted that a lot of the fund would go to the private sector.

Responding to enquiries about the loan, Benmessaoud, who was represented by the World Bank Global Lead, Energy Access, Mr. Mac Cosgrove-Davies, stated, “With regards to the question on the loan, yes indeed, this is a loan to the government.

“That said, the Rural Electrification Agency will be the implementing agency for the loan and much of the funds will actually be going to the private sector. A lot of the funds that go from the World Bank to the government will be provided to the private sector.”

Earlier in his speech during the opening session of the conference proper, Cosgrove-Davies noted that globally, more than one billion people lacked access to electricity.

“Sub-Saharan Africa is home to about 600 million of these. In Nigeria, 80 million people are without access and millions more suffer from poor service. The REA expects mini grids to fill a substantial portion of that gap, covering up to 8,000 villages nationwide,” he said.

Explaining how the $350m loan will be managed, the Managing Director, REA, Mrs. Damilola Ogunbiyi, said $100m out of the total sum would be dedicated to mini grid development.

She stated that 10,000 mini grids were being targeted by the agency, adding that when completed, the grids would generate about 3,000 megawatts of off-grid electricity.

Ogunbiyi stated, “The total loan amount for the electrification programme is $350m, of which $100m of that is going to be dedicated to mini grid development. As for the total quantum of electricity being targeted with the 10,000 mini grids, we are trying to achieve 3,000MW.

“Some sites could be 150 kilowatts, some others 20KW, but 10,000 (mini grids) is just a guide because people always need figures when we need to drive something home. So it could be less than that, but if we can achieve 3,000MW on off-grid, which will be close to the power generated on-grid, we will be very happy.”

She noted that the rural electrification programme was open to other investors, adding that the World Bank was basically “a very key catalyst to allow us do this project on a big scale. Anybody who wants to invest can come and invest in the market, it is not just for the World Bank.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Economy

Dangote Fertiliser Plant to Commence Shipment of Urea in March 2021

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Dangote to Sells Petrol in Naira, Plans to Commence Urea Shipment in March 2021

The Governor of the Central Bank of Nigeria, Mr. Godwin Emefiele, has said Dangote Fertiliser Plant will commence shipment of Urea in March 2021.

The CBN governor disclosed this during an inspection tour of the sites of Dangote Refinery, Petrochemicals Complex Fertiliser Plant and Subsea Gas Pipeline at Ibeju Lekki, Lagos on Saturday.

Emefiele further stated that Dangote Refinery would sell refined petroleum products in Naira when it starts production.

This he said would save the country from spending 41 percent of the nation’s foreign exchange on importation of petroleum products yearly.

Based on agreement and discussions with the Nigerian National Petroleum Corporation and the oil companies, the Dangote Refinery can buy its crude in naira, refine it, and produce it for Nigerians’ use in naira,” Mr Emefiele said.

That is the element where foreign exchange is saved for the country becomes very clear. We are also very optimistic that by refining this product here in Nigeria, all those costs associated with either demurrage from import, costs associated with freight will be totally eliminated.

Emefiele explained that this will make the price of Nigeria’s petroleum products affordable and cheaper in naira.

If we are lucky that what the refinery produces is more than we need locally you will see Nigerian businessmen buying small vessels to take them to our West African neighbours to sell to them in naira.

“This will increase our volume in naira and help to push it into the Economic Community of West African States as a currency,” Mr Emefiele said.

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UK Budget 2021: Will Sunak’s Budget Run Into Unintended Consequences?

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UK EConomy contracts

Rishi Sunak’s Budget will encourage higher earners to consider their “international financial options” and will drive businesses away from the UK, warns the CEO of one of the world’s largest independent financial advisory and fintech organizations.

The warning from Nigel Green, chief executive and founder of deVere Group, comes as the Chancellor delivered his 2021 Budget in the House of Commons, his second since he took on the role.

Mr Green says: “The Chancellor has got an extraordinarily difficult hand to play as he tries to stem the economic damage caused by the pandemic, support jobs and businesses and, crucially, rebuild the public finances.

“Whilst Mr Sunak is being hailed a hero for the continued and unprecedented levels of support, it should also be remembered that he is – in a stealth move – dragging more people firmly into the tax net.

“He is raising taxes under the radar.

“Yes, there is no income tax rise. However, he is freezing personal tax thresholds, meaning as incomes rise and thresholds don’t, he is able to raise money by fiscal drag.”

Earlier this week, the deVere CEO noted: “Those most impacted by this stealth move will be looking at the financial planning options available to them, including international options, in order to grow and protect their wealth.”

Rishi Sunak also confirmed that corporation tax will increase to 25% from 2023, up from the current level of 19%.

Of this tax hike, Mr Green goes on to say: “Lower corporation tax helps job and wealth-creating business to survive and thrive. It also helps attract business to move and invest in the country.

“Instead of increasing taxes, Mr Sunak should have relentlessly focussed on growth and stimulus policies for businesses.  This would have been of greater help to firms, the economy, jobs and, ultimately, the Treasury’s coffers.”

He adds: “Again, this corporation tax hike is likely to serve as a prompt for businesses to consider their overseas financial options.”

The deVere CEO concludes: “The Chancellor had to perform a tough juggling act.  But stealthily dragging more people into the tax net and raising corporation tax might have negative, unintended consequences for the Treasury’s bottom line.”

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Electricity Consumers Get 611,231 Meters Under MAP Scheme

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Electricity Consumers Get 611,231 Meters Under MAP Scheme

A total of 611,231 meters have been deployed as at January 31, 2021 under the Meter Asset Provider initiative since its full operation despite the COVID-19 pandemic and other extraneous factors, the Nigerian Electricity Regulatory Commission has said.

NERC disclosed this in a consultation paper on the review of the MAP Regulations.

The proposed review of the MAP scheme is coming nearly four months after the Federal Government launched a new initiative called National Mass Metering Programme aimed at distributing six million meters to consumers free of charge.

“The existence of a huge metering gap and the need to ensure successful implementation of the MYTO 2020 Service-Based Tariff resulted in the approval of the NMMP, a policy of the Federal Government anchored on the provision of long-term low interest financing to the Discos,” NERC said.

The commission had in March 2018 approved the MAP Regulations with the aim of fast-tracking the closure of the metering gap in the sector through the engagement of third-party investors (called meter asset providers) for the financing, procurement, supply, installation and maintenance of meters.

It set a target of providing meters to all customers within three years, and directed the Discos and the approved MAPs to commence the rollout of meters not later than May 1, 2019.

But in February 2020, NERC said several constraints, including changes in fiscal policy and the limited availability of long-term funding, had led to limited success in meter rollout.

NERC, in the consultation paper, highlighted three proposed options for metering implementation going forward.

The first option is to allow the implementation of both the NMMP and MAP metering frameworks to run concurrently; the second is to continue with the current MAP framework with meters procured under the NMMP supplied only through MAPs (by being off-takers from the local manufacturers/assemblers).

The third option is to wind down the MAP framework and allow the Discos to procure meters directly from local manufacturers/assemblers (or as procured by the World Bank), and enter into new contracts for the installation and maintenance of such meters.

“Customers who choose not to wait to receive meters based on the deployment schedule of the NMMP shall continue to have the option of making upfront payments for meters which will be installed within a maximum period of 10 working days,” NERC said.

The regulator said such customers would be refunded by the Discos through energy credits, adding that there would be no option for meter acquisition through the payment of a monthly meter service charge.

“Where meters have already been deployed under the meter service charge option, Discos shall make one-off repayment to affected customers and associated MAPs. Such meters shall be recognised in the rate base of the Discos,” it added.

NERC urged stakeholders to provide comments, objections, and representations on the proposed amendments within 21 days of the publication of the consultation paper.

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