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A Third NNPC Equity Stake in Dangote Refinery To Be Paid In cash



Dangote refinery

Africa’s richest man and the President of the Dangote Group, Alhaji Aliko Dangote, yesterday disclosed that the 20 percent equity taken by the Nigerian National Petroleum Corporation (NNPC) in his much-awaited refinery will not be paid in a single cash transaction.

Speaking during a documentary aired on Arise News Channel, the renowned philanthropist noted that while a third of the $2.7 billion deal would be paid in cash, the second would be through crude sales and the third would be through profits made by the corporation.

He noted that there’s a lot of misconceptions around the planned 20 percent equity holding by the national oil company, explaining that the deal also involves all the products to be churned out by the $19 billion facilities, including petrochemicals.

Revealing that he got the inspiration to build the refinery from India, given what he described as the painful situation whereby Nigeria, a country of over 200 million people importing all petroleum products needed for consumption.

He pointed out that the project currently employs 29,000 Nigerians and 11, 000 foreigners with plans to ramp up the number to 57,000 in the coming months.

The 650,000 barrels per day refinery, located in Lagos is expected to start operation in the first half of next year, with the NNPC in the process of buying 20 percent of the refinery.

Stressing that the refinery is capable of meeting the country’s entire petrol, diesel and jet fuel needs, Dangote posited that as it stands, the country expends about 25 percent of all its import bills on bringing in petrol products into the country.

The businessmen lamented that Nigeria lost between $50 billion to $60 in investments to the delayed passage of the Petroleum Industry Act (PIA), but explained that with the recent presidential assent, investors who had been sitting on the fence are now expected to move into the country.

“So, these are the things that people don’t really understand and I want to really clarify it. When they talk about the $2.7 billion, you know, they (NNPC) are paying one third of the money.

“Another one-third of the money, again, will actually be paid through supply of crude, with the deduction of maximum of about $2 and some cents. And then one-third of it, which is another $850 to $900 million will be paid from the profit they are going to make from the business.

“So it’s not a cash transaction where they are paying all cash. You can see that if we don’t have confidence in what we are doing, we would have asked them to pay all cash,” he stated.

Dangote mentioned that one of the benefits of the refinery to Nigeria would be to stabilize the country’s currency because as of today, about 25 percent of the country’s foreign exchange goes to the importation of petroleum products.

He noted that if the country was to spend $8 billion to $9 billion for imports, for instance, that money would be saved because the refinery has the full capacity to meet every energy need of the country, whether petrol, diesel, or aviation fuel, with a lot left to export, thereby generating a lot of foreign exchange for the country.

“So you can see the difference, even our own balance of trade will change, it will strengthen also the naira because we’re not going to have this massive avalanche of dollars going out for importing finished products of our own raw material.

“This refinery that we built is very important and is going to help transform not only the oil sector in Nigeria, no, but it will also transform the entire economy of Nigeria, it will put millions of people directly or indirectly at work.

“This will massively transform the economy and by transforming the economy, the government will have more money to devote in terms of education, in terms of health and in terms of infrastructure,” he opined.

Dangote added: “It makes me feel terrible to see a country as big as Nigeria, as resourceful as Nigeria and with this sort of population that we have 200 million-plus, we’re importing all our petroleum products. I mean, it is very painful.

“So with that, I thought in my mind, and I said that somebody has to address this issue. We tried before, in 2007 like what I said earlier on, but the government of that day changed their minds, and then we jettisoned the idea and returned them.

“But right now, we came back with the support of the government to make sure that yes, we help in addressing this issue of not only Nigeria. Because I’m a Nigerian and I’ve benefited quite a lot from Nigeria and if there are issues to be sorted out, I should be one of those who will bring solutions to our national problems.”

According to Dangote, the refinery project remains the biggest in Africa today and one of the biggest in the world, adding that a lot of Nigerians were getting massive training as a way to build in-country capacity.

With the expected operationalization of the Petroleum Industry Act (PIA), Dangote expressed confidence that investors would be attracted to the country because before now, there was no incentive.

“Before there was no clarity, people were not really very ready and willing to put in their money. If you look at it, in the last couple of years, there has not been an investment. We have lost more than $50 billion to $60 billion worth of investment,” he noted.

On reasons for accepting NNPC’s 20 percent equity, he explained that it wasn’t possible for the government to sit back when a massive project like the refinery is ongoing because of the need for energy security, assuring that in three or maximum of four years, NNPC will recoup its investment.

“People keep talking about the refinery, they didn’t buy only the refinery, they bought refinery with petrochemicals. I could have actually decided to do like some of my mates here in Nigeria and just keep my money in the bank or keep the money abroad.

“But you know I’m very, very passionate about Nigeria and making Nigeria great. If it’s just the Dangote group making money, I would have just kept that money and participate in capital markets abroad where my money is in dollars and I am making money, but no.

“We know as a country we have challenges, how do we address these issues. The only way for me is not to sit and be criticizing, no, I should be part of the problem solvers and part of the change. My prayer is that I will give most of my wealth when I am alive,” he said.

Also, the Governor of the Central Bank of Nigeria (CBN) Mr. Godwin Emefiele, who spoke in the documentary explained that with the coming of the refinery, Nigeria would save a lot of its foreign exchange that’s currently being used in importing refined products.

He said: “Ordinarily, setting up a 650, 000 barrels per day refinery, is usually a project that is set up by sovereign countries, not by individuals, no matter how big you are, no matter how big the company is.

“Our own selfish interest is that this will help to achieve our import substitution objectives and on this, you’re talking about goods that are currently being imported into the country with scarce foreign exchange, that we will now begin to produce them locally, thereby saving foreign exchange that the central bank would have spent importing or funding the importation of these items.

“At every opportunity that I have visited that project site, I get encouraged and I seize the opportunity of those visits to encourage even other Nigerians or other businesses, whether local or foreign, that Nigeria has a lot of potentials and as long as people can contemplate this kind of projects, they will receive the needed support from the CBN for the importation of plants and equipment.”

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UAE Commits $4.5 Billion for African Clean Energy Initiatives at UN Climate Summit




The United Arab Emirates, as the host of this year’s United Nations climate summit, has made a significant pledge of $4.5 billion to support clean-energy projects in African nations.

This substantial commitment is a collaborative effort involving key entities such as Abu Dhabi’s clean-energy producer Masdar, Abu Dhabi Fund for Development, Etihad Credit Insurance, the nation’s export credit agency, and AMEA Power, a Dubai-based renewable-energy company.

The announcement was made by the COP28 Presidency in an official statement.

Africa faces a critical need for nearly a tenfold increase in climate adaptation funding, amounting to $100 billion annually, as emphasized by the Global Center on Adaptation. This financial boost is essential for enhancing infrastructure and protecting agriculture from the adverse impacts of climate change.

Although the continent contributes only about 4% of global greenhouse gas emissions, its nations are disproportionately affected by climate change.

“The initiative will prioritize investments in countries across Africa with clear transition strategies, enhanced regulatory frameworks, and a master plan for developing grid infrastructure,” stated COP28 President-Designate Sultan Al Jaber at the inaugural Africa Climate Summit on Tuesday.

Al Jaber’s commitment to invest in the African continent precedes the UN climate summit that he is overseeing. As the chief executive officer of Abu Dhabi National Oil Co., one of the world’s largest oil and gas producers, his involvement has sparked criticism from climate activists.

Over 400 environmental groups have voiced concerns in a letter to the UN secretary-general, expressing reservations about how Al Jaber’s work may affect the legitimacy and effectiveness of the summit.

The African Development Bank’s Africa50 investment platform will serve as a strategic partner in identifying initial projects, according to the statement.

Here are the funding details:

  • The Abu Dhabi Fund for Development will provide $1 billion in financial assistance.
  • Etihad Credit Insurance will offer $500 million in credit insurance to mitigate risk and attract private capital.
  • Masdar commits $2 billion in equity and will facilitate an additional $8 billion in project finance, aimed at delivering 10 gigawatts of clean energy capacity in Africa by 2030.
  • AMEA Power will contribute to funding 5 gigawatts of renewable energy capacity in the continent by 2030, mobilizing $5 billion, with $1 billion in equity investments and $4 billion from project finance.

This generous funding initiative reflects the United Arab Emirates’ dedication to addressing climate change and supporting sustainable development in Africa, marking a significant step toward a greener and more resilient future for the continent.

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MAN Raises Alarm Over Potential Displacement of Local Meter Manufacturers in Power Sector

The association explained that the stiff financial requirements and technical specifications listed in the advertised material of the Transmission Company of Nigeria (TCN) are heavily biased against domestic manufacturers



Following the implementation of the NMMP Phase IIT, a World Bank-funded initiative launched to supply 1.2 million smart meters, the Manufacturers Association of Nigeria (MAN) has cautioned the government on excluding local meter manufacturers and assemblers within the downstream power sector from the initiative.

This was disclosed in a statement made available to the media by MAN on Sunday.

The association explained that the stiff financial requirements and technical specifications listed in the advertised material of the Transmission Company of Nigeria (TCN) are heavily biased against domestic manufacturers as local manufacturers would struggle to meet those stated requirements.

This, MAN said is against contradicted the Central Bank of Nigeria’s guidelines for the National Mass Metering Programme.

MAN emphasizes that local manufacturers have made substantial investments in expanding their manufacturing capacities, as per the Federal Government’s backward integration policy and the introduction of the NMMP intervention.

They have also made efforts to train and nurture a highly skilled workforce capable of meeting the power sector’s demands, as envisioned in the Nigeria Electricity Supply Industry.

In the statement MAN warns that this situation could potentially lead to a replication of the distressing scenario witnessed in 2012 when local manufacturers were sidelined during the meter supply, resulting in the delivery of substandard meters by foreign companies awarded the contract, which were subsequently removed from the network.

Speaking on employment opportunity, MAN said “The position of the TCN that installation will provide employment opportunities to Nigerians will completely pale into insignificance when compared with a ratio of 1 to 10 jobs that will be created if local manufacturers are included in the scheme.”

Similarly, MAN argues that the intentional denial of opportunities for local manufacturers fails to acknowledge their impressive performance in the sector, including the successful deployment and installation of a total of 611,231 energy meters across the country between January 2019 and January 31, 2021.

The potential displacement of local meter manufacturers and assemblers in Nigeria’s power sector raises serious concerns about the future of the industry.

MAN calls on the government to reconsider the advertised financial requirements and technical specifications, ensuring that they align with the Central Bank of Nigeria’s guidelines.

By including local manufacturers in the supply of smart energy meters, the power sector can benefit from high-quality products while stimulating economic growth and generating a substantial number of job opportunities for the Nigerian workforce.

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Power Consumers Protest Export of Electricity Worth N23.13bn Amidst Widespread Darkness in Nigeria

Power Consumers Demand Prioritization of Domestic Needs as Nigeria Exports Electricity Worth N23.13bn to Neighboring Countries Despite Widespread Darkness.



Electricity - Investors King

Power consumers in Nigeria have voiced their strong opposition to the export of approximately N23.13 billion worth of electricity to neighboring countries in 2022.

This development comes at a time when many Nigerian communities are grappling with persistent power outages and widespread darkness.

According to data obtained from the Nigerian Electricity Regulatory Commission (NERC) in Abuja, Nigeria continued its export of electricity to the Republics of Benin and Niger as well as certain special categories of consumers.

The total value of electricity exported from Nigeria in 2022 amounted to $50.98 million (equivalent to N23.5 billion at the official exchange rate of N461/$). However, international customers only remitted $32.69 million, approximately N15.1 billion, indicating a shortfall of $18.29 million or N8.4 billion during the period.

Also, special customers failed to remit N792.6 million in the same period, as revealed by figures from the power sector regulator.

The export of electricity despite the dire situation of power supply within the country has drawn significant criticism from electricity consumers.

The Nigeria Electricity Consumer Advocacy Network’s National Secretary, Uket Obonga, expressed dismay at the decision, stating that Nigeria has one of the highest numbers of citizens without access to electricity in the world.

He compared Nigeria’s situation to that of China, highlighting that while China has approximately 68 million citizens without electricity out of a population of 1.4 to 1.5 billion, Nigeria has a staggering 90 million people without access to electricity.

Obonga questioned the economic rationale behind exporting such a scarce commodity that the Nigerian people desperately need. He criticized the decision-makers behind this move and their apparent disregard for the plight of their own citizens.

The export of electricity, in the face of widespread darkness and a lack of access to electricity, has left many perplexed and wondering about the reasoning behind such a decision.

The NERC provided updates on the remittances made by special/cross-border customers in the fourth quarter of 2022.

Obonga argued that the export of electricity was unjustified, particularly considering the ability of Nigerians to pay for the commodity.

He pointed out that the joint monthly revenues from two or three power distribution companies exceeded the N23 billion earned from international customers throughout the entire year. Obonga suggested that corruption might be at play and urged the incoming government of President Bola Tinubu to thoroughly investigate this issue.

While officials at the NERC defended the export of electricity, citing obligations and agreements, the discontent among Nigerian power consumers remains palpable.

Critics argue that the export of electricity should not take precedence over meeting the domestic energy needs of the Nigerian people, especially when millions still lack access to reliable power supply.

It is imperative for the government and relevant stakeholders to address the concerns raised by power consumers and find a balance between fulfilling international commitments and ensuring adequate and reliable power supply within Nigeria.

The future of the country’s energy sector hinges on striking the right equilibrium that prioritizes the needs and well-being of the Nigerian people while fulfilling international obligations in a responsible and sustainable manner.

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