BREAKING NEWS, Energy Briefs
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NIGERIAN banks have invested more than N115.73 billion in the funding of 36 power projects across the country in the last four years, under the Power and Airline Intervention Fund, PAIF. According to the report of activities of the Development Finance Department of the Central Bank of Nigeria, CBN, out of the total sum of N300 billion approved for the financing of power and airline projects, N233.16 billion was released to the Bank of Industry, BoI, and disbursed through the banks with the 36 power projects getting N115.73 billion.
The report compiled by the Board and Publication office of the Development Finance Department, explained that the PAIF was designed as part of the quantitative easing measure to address the paucity of long-term credit and acute power shortage in the country. Giving a breakdown of the amount, the report noted that total net amount released stood at N233.161 billion while the total amount disbursed to banks stood at N233.161 billion. The amount approved for release to the BoI was N237.23 billion while the balance of unutilised PAIF fund stood at N62.77 billion.
The report further disclosed that the total repayment stood at N32.363 billion, noting, however, that no repayment was remitted by the BoI to the CBN under the PAIF in the month of May, 2014. For the first quarter of 2014, the CBN said a total of N508.00 million was disbursed under PAIF from January to March, 2014. The CBN stated that total repayments from 10 power projects stood at N3.199 billion as at the first quarter of 2014.
In the revised guidelines for the N300 billion intervention fund, the CBN said the objective of the fund is to fast-track the development of electric power projects, especially in the identified industrial clusters in the country. It further stated that the fund was aimed at serving as a credit enhancement instrument to improve the financial position of the Deposit Money Banks, DMBs. “Other objectives are to improve power supply, generate employment, and enhance the living standard of the citizens through consistent power supply and also provide leverage for additional private sector investments in the power and aviation sectors.”
The Bank of Industry is the managing agent of the fund and is responsible for the day-to-day administration of the fund, while Africa Finance Corporation, AFC, is the technical adviser to the fund. For power projects to qualify, the CBN said the fund is for “any corporate entity, duly registered in Nigeria, involved in electricity power supply value chain that includes power generation, transmission, distribution, gas-to-power projects and associated services.
“Eligible projects can be promoted by private or public sector sponsors (or a combination of both) but must be structured either as profit-oriented business or a public service, provided that contracted cash-flows or financing support exist to ensure repayment of principal and interest, as well as long term viability. The project company may also offer appropriate credit enhancement options to support its financial obligations. The project could be already existing and in operation, in design/development, under construction, or existing but operationally inactive.
“The refinancing of existing loans for captive power projects for corporate entities that are not power companies will only be eligible if the investments are not older than two years from the date of the application. For the avoidance of doubt, this restriction will not be applicable to captive power projects implemented and managed by power companies. Gas-to-power promoters must tender verifiable evidence of off-taker purchase agreements for their projects to be eligible.”
Coastal Communities and Rising Sea Level
ENVIRONMENTAL Rights Action/Friends of the Earth Nigeria, ERA/FoEN, has attributed the continued rise in sea level to the inability of the federal government to wean itself off its fossil fuels dependence. As a result, some coastal communities and oil-ravaged communities in the Niger Delta are being swallowed.
ERA/FoEN’s observation was premised on the theme of the 2014 World Environment Day commemoration which focused on Small Island Developing States with the slogan “Raise Your Voices Not the Sea Level.” In a statement, ERA/FoEN said the 2014 event reiterated the ominous catastrophic impact of climate change and the need for collective action to stem the threats of sea level rise on coastal communities, especially in developing nations of the global South.
Godwin Ojo, executive director, ERA/FoEN, said: “The 2014 World Environment Day commemoration is a wake-up call to governments across the globe and particularly the Nigerian government to go beyond mere talk and artificial measures to critically addressing the impact of climate change on coastal communities already ravaged by extractive activities. Rising sea level is one of the most serious threats to coastal communities. At the global level concrete actions should include a legally binding mechanism to ensure appropriate measures in mitigation and adaptation measures to curb climate change.
“In Nigeria the impact of sea level rise is particularly noticeable in communities like Aiyetoro in Ondo State, parts of Lekki and Epe in Lagos, and across the Niger Delta that are now being swallowed by the Atlantic Ocean. These developments are instigated by unrelenting and reckless extraction promoted by transnational oil corporations that feed the voracious appetite of countries of the global North. In spite of its evident documented impact on the environment and global climate, the Nigerian government is yet to stamp its feet by insisting that oil trans-nationals like Shell stop gas flaring n the Niger Delta. We have said it time and again that the burning of fossil fuels in the Niger Delta heats up the skies, pollutes the immediate environment and causes acid rain even as it plays a key role in intensifying the downward match of deserts in the north.
“The Nigerian government must as a matter of utmost priority, detach itself from its unholy matrimony with oil corporations that promote fossil fuels. It must embark, instead, on a sustained energy transition to alternative sources in renewables as the way forward to the energy future that is clean and sustainable while guaranteeing community livelihoods,” he said.
Compiled by Anayo Ezugwu
— Jun. 23, 2014 @ 01:00 GMT
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