2060 Net-zero Target : World Bank, US Exim Bank Pledge $3bn To Power Reform in Nigeria

By Augustine Aminu with agency reports

The World Bank and US Export-Import Bank (EximBank) have plans to inject over $3 billion into Nigeria’s energy transition plan. 

The global financial institutions announced this Wednesday at the official global launching of the Energy Transition Plan by the Vice President, Professor Yemi Osinbajo. 

Shubham Chaudhuri, Nigeria Country Director, World Bank, said the international bank planned to commit over $1.5 billion towards the country’s energy transition plan. 

“We plan to commit over $1.5 billion towards the Energy Transition Plan on renewable energy, on power sector reforms, and potentially hydropower, on clean cooking, and wherever opportunities arise,” he said. 

“The policy and institutional reforms that will be necessary are also part of the agenda and we hope to be able to provide support for the fundamentally imperative of energy access but in a way that is consistent with the energy transition, what I think of as the NEAT imperative. 

“The Nigerian Energy Access and Transition (NEAT) imperative is what we here at the World Bank are absolutely committed to supporting.” 

Vice President Osinbajo while speaking at the launch said that the transition will gulp a cumulative of about $10 billion per year, totaling $410 billion, for the entire transition plan billed to be completed in 2060.

Osinbajo disclosed that the energy transition plan will lift 100 million Nigerians out of poverty over a decade.

On the need to have a peculiar transition plan, the Vice President said “for Africa, the problem of energy poverty is as important as our climate ambitions. Energy use is crucial for almost every conceivable aspect of development. Wealth, health, nutrition, water, infrastructure, education, and life expectancy are significantly related to the consumption of energy per capita.”

He highlighted the significant scale of resources required to attain both development and climate ambitions adding that Nigeria would need to spend $410 billion above business-as-usual spending- to deliver the Transition Plan by 2060. This, he noted would translate into spending about $10 billion annually. 

The Vice President explained that “the average $3billion per year investments in renewable energy recorded for the whole of Africa between 2000 and 2020 will certainly not suffice.”

Osinbajo said that the inter-ministerial Energy Transition Implementation Working Group he chaired was engaging with partners to secure an initial $10 billion support package ahead of COP27 along the lines of the South African Just Energy Transition Partnership announced at COP26 in Glasgow.

Commenting on the effects of Climate Change in Africa, Osinbajo explained that “climate change threatens crop productivity in regions that are already food insecure, and since agriculture provides the largest number of jobs, reduced crop productivity will worsen unemployment.”

Noting that African nations were rising to the challenge of climate change by signing the Paris Agreement, the Vice President said the current lack of power hurt livelihoods and destroy the dreams of hundreds of millions of young people.

He added that though Africa’s current unmet energy needs were huge, future demand would be even greater due to expanding populations, urbanization, and movement into the middle class. 

Maintaining the the nation’s energy plan was to engage the world, Osinbajo insisted that there was a need for African countries to engage critically on the challenge of climate change.

One of the aspirations of the plan, according to Osinbajo, was the creation of about 340,000 jobs by 2030, and 840,000 by 2060 adding that it also presented a unique opportunity to deliver a true low-carbon and rapid development model in Africa’s largest economy.

Aside the transition plan, the Vice President also announced the launch of the Universal Energy Facility “an innovative, results-based, finance programme that focuses specifically on scaling up electricity access for productive uses.”

Speakers at the event commended Nigeria’s leadership and pioneering role in the region, emphasizing the need for data-driven country-level.