President of the African Development Bank (AfDB), Dr. Akinwunmi Adesina, has made a case for Nigeria to evolve a more cost effective tariff structure in order to attract investors and achieve steady electricity supply.
The AfDB President hinted at the need for review of current electricity billing on Tuesday while speaking to State House Correspondents after his closed-door meeting with President Muhammadu Buhari at the Presidential Villa, Abuja.
According to him, ”there is no doubt that Nigeria continues to work a lot of power, without power you can’t do anything, industries can’t develop without power.
”There are three components, one I think we need to get the tariff structure because if you don’t have good cost reflective tariff structure, investments from private sector becomes very difficult in the energy sector. The second is liquidity constraints in the power sector gets addressed. ”
Adesina also disclosed that the AfDB had so far invested about $400million in the Transmission Comapny of Nigeria (TCN), as well as provided risks guarantees of non-repayment to free up the liquidity constraints although “at the end of the day it’s to diversify the energy subsets that we have.”
The AfDB President noted that Nigeria needs to use its gas deposit as well as hydro and solar energy to improve electricity supply, and that the AfDB was supporting this.
”The African Development Bank is investing heavily right now in the North, in the Jigawa area in solar projects. God is good to Africa and He gave us tremendous amount of sunshine, water, everything is good for Africa.
“All we need to do is take a cable and connect to the sun and we will be fine. So we just have to optimize the renewable energy potential that we have”, Adesina stated.
He said that he was at the Villa to inform President Buhari of the involvement of the AfDB regarding these investments and interventions in the country over the years; as well as thank him for the leadership he is providing to Nigeria and involvement in continental affairs.
His words: “I came to say thank you and also came to give him the account of what is happening at the bank. And quite a lot has happened at the bank in the last three years. We have 60 operations in Nigeria for a total of $4.5 billion and about $2.8 billion of that is in the private sector in the banking industry, financial sector, in particular about $1.7 billion in the public sector.
“We have very exciting projects here, one is the transmission of power. Mr. President mentioned it to me that power continues to be a problem. We have invested over $4 billion in the Transmission Company of Nigeria to continue to improve the power transmission.
”We have also invested heavily in the northeast of Nigeria, we have put in almost $258 million to support the rehabilitation both in terms of health, education, sanitation and water. And also skills as a way of reviving areas that have been battered. I told Mr President that that is very important.”
He added that ”we have also invested in mobilizing financing for the country. I briefed Mr President that Nigeria countries to be investment frontier and that the African Investment Forum which the African Development Bank held last year, we were able to mobilize about $38.7 billion of investments to African less than 72 hours, about $7.1 billion of that actually came to Nigeria.
”I also briefed about the future of what we are going to be doing here. I spoke to him about the support of the banking being crucial because as you know Nigeria is the largest shareholder of the African Development Bank and leaders have to lead.
”We are in the period of general capital increase for the bank and with that support, we believe you will see a different Africa completely under this new general capital increase of the bank.
“One of the things that we said was that Nigeria’s contribution under the last general capital increase of the bank was $360 million but we lend to Nigeria $4.5 billion, almost 15.5 percent. Every dollar that Nigeria gives to the bank, we lend $15 in return, so its a great investment.
”I assured Mr. President that under the new general capital increase of the bank, we are talking to our investors about this, so if we get enough money, hundred of people will be connected to electricity.”