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.
Nigeria’s Struggles in the Energy Sector Highlighted as Ghana Nears Universal Access
Nigeria, the most populous nation in Africa, continues to grapple with challenges in its electricity sector, resulting in a significant lag behind its West African neighbor, Ghana, in achieving universal access to electricity.
Ghana, with its population of 34 million, has made remarkable strides in expanding its power sector, attaining an impressive electrification rate of 88.54% with ambitions to reach 100% by 2024.
Ghana’s success story is characterized by its deliberate policy formulation and swift implementation to bolster its power sector, facilitating increased investment and widespread electricity access for its citizens.
Speaking at the Nigeria Energy Conference and Exhibition 2023 in Lagos, Ghana’s Minister of Energy, Andrew Mercer, underscored his country’s commitment to achieving universal access to electricity by the end of 2024.
Mercer stated, “The president of Ghana emphasized the aggressive target of the government to achieve universal access by the end of 2024 from the current rate of 88.54%. This is consistent with the UN Sustainable Development Goal 7 (SDG7), which aims to ensure access to affordable, reliable, and modern energy for all by 2030.”
In Ghana, the total installed energy capacity stands at 5,454 megawatts (MW) with dependable capacity at 4,843 MW, and peak demand reached 3,561 MW in May 2023.
Meanwhile, Nigeria boasts a significantly higher total installed generation capacity of 13,000 MW but only a fraction, between 3,500 and 4,500 MW, is effectively transmitted and distributed to Nigerian homes and businesses.
Tragically, this disparity means that over 80% of Nigerians still lack access to the electricity grid with only around 11.27 million Nigerians recorded as electricity customers as of Q1 2023, according to the National Bureau of Statistics (NBS).
Ghana’s sustained electricity grid stability has resulted from consistent efforts by the government and stakeholders to enhance the nation’s electricity industry, ultimately improving the quality of life for Ghanaians and supporting economic activities.
Both Ghana and Nigeria have increased their reliance on thermal power generation, reducing the share of hydro power generation in favor of thermal sources. However, while Ghana boasts a record of grid stability and minimal outages, Nigeria has struggled with frequent grid collapses.
In September 2023, Nigeria experienced grid collapses on two occasions, disrupting power supply nationwide.
This disparity in grid reliability highlights the challenges faced by Nigeria’s electricity sector. According to data from the Nigerian Electricity Regulatory Commission (NERC), Nigeria recorded a high number of grid collapses in recent years, with 2018, 2019, 2020, and 2021 witnessing 13, 11, 4, and 4 collapses, respectively.
In 2022, there were seven recorded grid collapses, with the most recent occurring on September 25, 2022, when power generation plummeted from over 3,700 MW to as low as 38 MW.
As Nigeria grapples with these electricity challenges, Ghana’s steady progress in its power sector serves as a reminder of the critical importance of comprehensive policies, infrastructure development, and stability in ensuring universal access to electricity for citizens, a goal that remains elusive for millions of Nigerians.
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.
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.
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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