BREAKING NEWS, Business
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| By Anayo Ezugwu |
THE Consulate General of the Federal Republic of Germany in collaboration with the Delegation of German Industry and Commerce in Nigeria are working to finance renewable energy in Nigeria. The consulate on August 23, organised a seminar in Lagos on ‘Financing Renewable Energy III’.
The seminar focused not only on financing opportunities of renewable energies and the challenges and advantages involved but also advised businesses and bankers on best practices and pitfalls when preparing and assessing proposals.
In their jointpresentation, Barbel Freyer, head of Energy and Environment Desk, Delegation of German Industry and Commerce in Nigeria and Michael Neulinger, head of Energy Desk, Delegation of German Industry and Commerce in Ghana, gave an overview of financing options for renewable energy projects in West Africa as part of a study financed by the Federal Office of Economics and Export Control.
They said while compiling information on the different funding institutions it became obvious that project financing still constitutes the highest hurdle in realising renewable energy projects. They said that large size projects are mostly favoured in getting credit facilities, adding that lack of knowledge on how to structure a project and how to prepare feasible business plans hamper access to such facilities.
According to Neulinger, renewable energy is now better received in Ghana than Nigeria with more than 200,000 homes currently using it in the country. He said Ghana is working to develop meters that will regulate renewable energy in the country.
In his presentation, Udo Wolter, head of Thermal Power Plants Transmission and Distribution of GAUFF Power International, said Nigeria needed to embrace clean energy. He said his company is working to develop a clean energy project in Nigeria with financing provided by a German Financial Institution, which envisages leading to the completion of 125 megawatts Power Plant in the south-eastern region of the country within 22 months.
But he lamented that non-approval of the $100 million financing deal which is being provided Commerzbank through Zenith Bank Plc by the Central Bank of Nigeria, CBN, is threatening the commencement of the project. Wolter told Realnews that if nothing is done in the next few months, the company will have no other option than to close the project.
Also, Ikenna Mbaekwe, DEG Investment manager, spoke on the positive developmental impact of foreign direct investment to the country, using his $80 million co-investment in Beloxxi, Nigerian biscuit manufacturer as a case study. As part of Germany’s development cooperation, he said German government is providing long-term investment capital and technical expertise in developing and emerging market.
Mbaekwe said the funding is supporting the expansion of private sector, which drives sustainable economic growth; creates jobs and income, thereby improving the country’s foreign-exchange balance by producing competitive products which can be exported.
In his contribution, Olaf Schmuser, manager, Commerzbank, Lagos, said oil production in Nigeria has dropped drastically. “The production has dropped from 2 million bpd to 1.4 million bpd. With this figure, a percentage goes to China to services loans Nigeria took from the country. Presently, Nigeria has about 800 thousand bpd.
“The issue in Nigeria now is not the drop in price of oil at the international market but the problem of production. The country needs to increase its oil production to enable it come out of recession,” he said.
— Sep 5, 2016 @ 01:00 GMT
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