ABUJA- THE European Union announced on Friday that it has budgeted about 2.87 million Euros for a major project to reduce gas flaring in the Niger Delta, especially in Rivers and Bayelsa states, over a period of 39 months.

The EU’s position was contained in a pre-feasibility study for the EU-Nigeria Dialogue on Energy, released on Thursday, during a workshop in Abuja , by the Delegation of European Communities to Nigeria .

According to the document, the Nigerian energy sector has been in crisis for many, a situation that has been worsened by the unrest and militancy in the Niger Delta.

“The objective is to catalyse the development of natural gas and renewable energy markets and sustainable community-based energy facilities within and beyond target communities and target states, through policy reform and by demonstrating that alternative community-based energy facilities can provide sufficient power for meeting rural and urban community needs.”

According to the EU, “In terms of energy issues, Nigeria could be said to be in a series of downward spirals. There are a number of loops with each activity negatively impacting on the next.

“Areas of concern include oil (refining, fuel subsidies, bunkering); gas (flaring, the implementation of the Gas Master Plan); electricity (6000MW, widespread use of generators); coal (little coal mining, partial privatization, large numbers of redundancies); uncompleted reforms and employee concerns and poor quality of power sector data.”

The EU noted other challenges in the industry to include corruption, weak nuclear aspirations, renewable energy, environmental challenges, poor transmission and distribution infrastructure, erratic pricing policy for electricity and petrol, lack of maintenance and open door policy, as well as tensions between private and public participants and state and federal governments.

Delivering a paper at the workshop, the representative of the European Commission Delegation to Nigeria and EU Charge de’Affairs, Mr. Augustine Oyome, explained that the purpose of the workshop was to discuss how best EC’s support could add value to energy development in Nigeria , in the light of the report of a study, which was funded by the European Commission.

He said, “Energy is one area that is in the mutual interest of both Nigeria and the European Union, as clearly set forth in the EU-Nigeria way forward. It is the subject of the on-going political dialogue between the two sides.
“This is appropriate given the government’s current plan to boost electricity generation to 6000MW by the end of the year and to 11,000MW by 2010.”

According to Oyome, stable and reliable energy supply is “absolutely necessary if Nigeria is to have a sustainable economic growth in the coming years, and the EU, as a development partner, wants to play a role in that.”
The EU has also recommended the establishment of a Niger Delta Development Trust Fund/Bank to help with the reconstruction and development of the area, in the aftermath of the amnesty by the Federal government.

It recommended as part of on-going efforts to develop the region, and ultimately the nation’s energy sector, the creation of Niger Delta Develoment Trust Bank Fund or Bank in the mould of the European Bank for Reconstruction and Development.

It said, “We believe that the problems facing the energy sector in Nigeria are systemic, meaning that solutions have to cover the whole system and not isolated parts of it. Systemic failure needs systemic solutions.

“Key areas of recommendation to revamp the sector including support to domestic gas development, integrated package of local content and capacity building, development of clusters, and a Niger Delta Development Trust Fund or Bank (as with the successful example of the European Bank for Reconstruction and Development.”

He noted in September last year, the former EU Commissioner for Development, Louis Michel, and the EU Commissioner for Energy, Adris Pielbalgs, paid a visit to the country and had discussions with government officials.
“The visit was an expression of EC’s commitment to assist Nigeria in this area. That visit gave a boost to the political dialogue process and provided a platform for the inclusion of energy in the EC-Nigeria Country Strategy Paper for the 10th EDF,” he added.

Oyome, however, cautioned that strategies on energy development should not only revolve around energy and gas. “We must focus more and more on new energy sources and green technologies. We have the opportunity to follow a new path,” he said.

These new energy sources, he said, could contribute to a Nigerian economy that is based on energy efficiency as well as contribute to lifting millions out of poverty.

“Think of the boost the realization of the government’s plan on power generation and distribution could have on private sector, particularly on small and medium enterprises, on job creation, poverty reduction and achievement of the MDGS,” he said.