March 24, 2015

AFDB commits $200m to coal-to-power

AFDB commits $200m to  coal-to-power

File Photo

By Chris Ochayi

ABUJA — In its determination to deepen the development of renewable energy, the African Development Bank, AFDB, has offered to provide a support to the tune of about $200 million towards the growth of coal-to-power projects in Nigeria.

File Photo

File Photo

The Managing Director and Chief Executive of Nigerian Bulk Electricity Trading PLC, NBET, Mr. Rumundaka Wonodi, who disclosed this while briefing journalists shortly after the Board’s meeting in Abuja, assured that other coal-to-power projects like the Zuma energy project will soon be completed.

According to Wonodi, “It is welcome news and you know that we are also working with the World Bank for Partial Risk Guarantee, PRG, to support the projects that we undertake. Unfortunately, the World Bank is very reticent and they are not quite committed to giving support to coal because they deem it to be dirty fuel and not very good for the environment.

“However, the AfDB which is African understands that Africa needs power from every source that it can, is supporting coal. We welcome that and they offered to provide it in support of some the projects that we are working on like the Zuma energy if they feel that it is necessary and some of the other coal projects that we see around the country. “It is very welcome news and we appreciate that. I know that the financial involvement is a number that is about $200 million,” he said.

With regard to tariff cuts, Wonodi said, “The tariff that we work with is the wholesale tariff which is between us and the generation companies. To some extent, I think the collection losses were in excess and the way the commission is addressing it is based on consultation with the distribution companies.”

On the level of response from distribution companies as regards posting Letters of Credit, LCs to NBET, Wonodi said, “Currently, we have about eight of the distribution companies that have posted their LCs which shows that they are comfortable and confident that this market can take off the way it was designed to be.”

Speaking on the activities of the agency, he said, “The bulk trader was established to be a broker, a go-between the generation companies and distribution companies.