Development Bank to finance renewable power plants

The African Development Bank (ADB) has affirmed its commitment to the Nigerian Electricity Regulatory Commission (NERC). This is in line with the funding of the renewable energy power plants being planned for the country.

The funding support, NEXT gathered on Monday in Abuja, will be on behalf of prospective investors wishing to undertake the construction of small hydro, wind, solar, bio-fuel, land fill gas, geo-thermal and biomass power plants.

This assurance was secured when four senior ADB officials, led by Solomane Kone, the Chief Economist, met with senior electricity commission officials, led by Imamuddeen Talba, the Administrator, to assess the progress recorded so far on the Federal Government's power sector reform.

Terms of funding support

The Development Bank, which said it was favourably disposed to funding facilities for any investor interested in undertaking the construction of renewable energy plants in the country, said proposals for such support must not only be realistic, but their sponsors must demonstrate adequate capacity to meet all conditions for good investment decisions.

The bank said the facility was part of its commitment to assist Nigeria's efforts to improve its power generation capacity through its non-concessionary windows for the public-private sectors initiatives, adding that it is also determined to offer assistance in the areas of capacity building, particularly on how to approach international finance organisations on infrastructure projects financing.

Thrust of meeting

The fulcrum of the meeting was on the pricing regime of electricity under the Multi-Year Tariff Order (MYTO) scheme, as it affects private sector investments, security of returns on investments, and improvement in the power generation in the country.

The tariff scheme was introduced on July 1, 2008 to replace the then opaque and unplanned approach to the pricing of electricity in the country.

While commending the regulatory commission for introducing the tariff scheme, the Development Bank called for the adjustment of certain components of the electricity pricing template to guarantee the confidence of investors and financiers in the system.