The President of the African Development Bank, Akinwumi Adesina, has listed good cost reflective tariff structure to attract investors, addressing liquidity constraints in the power sector as well as diversifying to other renewable energy sources as key to ending the energy crisis in the country.
Adesina spoke to State House Correspondents after a closed door meeting with President Muhammadu Buhari at the State House, Abuja.
“I think there is no doubt that Nigeria continues to work a lot of power, without power you can’t do anything, industries can’t develop without power. So I commend the efforts that are being made. There are three components, one, I think we need to get the tariff structure because if you don’t have good cost reflective tariff structure, investments from private sector becomes very difficult in the energy sector.
“The second is that liquidity constraints in the power sector gets addressed. We in the bank have invested over $400 million in the Transmission Company of Nigeria to support it, we have also provided risks guarantees to Embet to be able to guarantee the risk of non-repayment to free up the liquidity constraints. But at the end of the day, it’s to diversify the energy subsets that we have. We have gas here, we should use a lot of those gas, we also have hydro and solar. The African Development Bank is investing heavily right now in the north, in the Jigawa area in solar projects. You know, God is good to Africa and He gave us tremendous amount of sunshine, water, everything is good for Africa, all we need to do is take a cable and connect to the sun and we will be fine. So we just have to optimize the renewable energy potential that we have.”
The ADB President who disclosed that the bank has invested over $400 million in the Transmission Company of Nigeria to support the nation’s power transmission said, without a good cost reflective tariff structure, investors will continue to shun the sector.
Adesina added, “I’m pleased with the role the African Development Bank has played and Mr. President was very appreciative in the role we played in terms of the general budget support of the government. Look, Nigeria is a big country, Nigeria has to be a power house and I am sure it will be.”
On why he visited the Presidential Villa, the ADB President said, “First and foremost, I came to see Mr President to thank him for all his leadership that he is providing both on the continent and the region. As you know the continent faces quite a number of challenges in terms of security and he has put security as very important thing. Obviously, trade and investments is not going to happen unless you have security within the region.
“Secondly, to congratulate him on his re-election and to brief him about what the Bank is doing in Nigeria. As you know I was elected president of African Development Bank with strong support of President Buhari, president Jonathan, president Obasanjo, all the heads of state but most importantly President Buhari played a very critical role in my elections. So I came to say thank you and also came to give an account of what is happening at the bank. And quite a lot has happened at the bank in the last three years. We have 60 operations in Nigeria for a total of $4.5 billion and about $2.8 billion of that is in the private sector in the banking industry, financial sector, in particular about $1.7 billion in the public sector.
“We have very exciting projects here, one is the transmission of power. Mr. President mentioned it to me that power continues to be a problem. We have invested over $4 billion in the Transmission Company of Nigeria to continue to improve the power transmission.
“We have also invested heavily in the northeast of Nigeria, we have put in almost $258 million to support the rehabilitation both in terms of health, education, sanitation and water. And also skills as a way of reviving areas that have been battered. I told Mr President that that is very important.
“We have also invested in mobilizing financing for the country. I briefed Mr President that Nigeria continues to be investment frontier and that the African Investment Forum which the African Development Bank held last year, we were able to mobilize about $38.7 billion of investments to Africa in less than 72 hours, about $7.1 billion of that actually came to Nigeria.