Monica Maduekwe, founder and CEO, PUTTRU Technologies Limited, an Africa’s leading digital platform for the facilitation of investments in energy companies in Africa, in this interface with selected journalists, speaks on the takeaway from the just concluded COP28, climate financing and issues around industrialization in Nigeria and in Africa. Group Business Editor, MOTOLANI OSENI was there to bring the excerpt.
Speaking on the importance of the COP28 to the Nigerian economy, Madueke, explained that it is an opportunity for the largest economy in Africa to be a part of the discussion about climate change, climate finance and also how Nigeria can really start benefiting from the whole global discussions on climate finance.
She recalled that climate change topics during the last year’s edition of the COP, had a very big launch of the White Paper, which was done with three ministries in Nigeria, which are Ministry of Power, Ministry of the Environment, then the Ministry of Industry, Trade and Investment.
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On why it’s important to have an interface with the media following the successful participation of Nigeria at the COP28, the PUTTRU founder, noted that the press conference is a platform to discuss what really happened in COP28 in Dubai.
According to her, I was fortunate to be in Dubai. I was also fortunate to attend a lot of the meetings, negotiation meetings, although I was quiet, but it was interesting to get, you to know, a feel of the debates. For instance, questions that concerns developing countries such as Nigeria, and many other African countries. The concerns of the developed countries, not just the background but the whole debate of climate change.
“Because Industrialized countries cause the issues, but the developing countries now have to step up. It was the whole conversation that well developed countries can provide some funding to support developing countries to transition, and this is where PUTTRU comes in, just as it goes in mentioned, our concern is facilitating funds for Africa, Nigeria specifically we need funds, the government own fund is not enough to do everything.
“In fact, in the study we did last year, the White Paper, we saw that government fund is just growing very, very minimal compared to the population growth. So, government funds cannot do everything. And that, you know, debt borrowing from developed countries is not the best because the more borrowing, the more issues we go into.
‘So, the question now is, how can Nigeria position herself to receive the most of climate finance that is available? We have a number of countries like Kenya, South Africa, and Egypt competing for those same funds.
“Not many is coming to our own region, Africa, talk less of Nigeria. So, the question is, how can we do that for Nigeria and that’s why we are having this press conference.”
She pointed out that there is a lot of pledges that have been made throughout the different COPS that has been going on since 1995.
“There’s always new pledges, new support for developing countries for the number of these does not translate into real transformational projects are talking about large investment, not this small you know hundred thousand, $1,000,000 projects here and there.’
She added: “Africa and Nigeria specifically needs huge amounts of investment. One of the key things that came out during the high level ministerial dialogue on climate finance, and this was from a Southeast Asian minister, is that billions is not what developing countries need.
“We need trillions, so, there is a need to really step up and see that money begin to unlock. The question is who is going to get it when it does come out?
“What are the conditions that will make Nigeria be the preferred investment zone and how can Nigeria prepare herself to receive it? And this is what PUTTRU is interested as the facilitation investment service provider in Nigeria”.
Speaking on the collaboration with the National Action Committee (NAC) on the Africa Continental Free Trade Area, Monica, stated: “Why are we doing this collaboration and how do we see this collaboration addressing the issues between the pledged size and the actual inflow and why we’re doing it for Nigeria and what expectations you know we can have?
“So, as I mentioned, there’s a lot of discussions on the new quantitative collective group for climate finance, and this goal is still being discussed while expecting that from next year there will be now the negotiation.
“And from 2020-2025 they should be new targets in terms of the fund should start materializing, so, there’s a lot of dialogue back and forth on what the new climate finance framework should look like.
She, therefore, noted that there was a high level Minister at dialogue physically on this climate finance and also other, you know, negotiations with the main focal persons from the different countries.
“It was very interesting listening to the ministers from the developing countries, what they wanted and one of the key things that came out is that it’s very interesting even for Nigeria as we continue to participate in negotiating not just at the COP, but also with investors.
“What people are saying is that there is a need to be a clear definition of work.
Climate finance is because why not? Is it technical assistance? Is it when developed countries bring their experts and spend millions and they says climate finance or climate finance is when we just develop new roads.
“So, they are saying it needs to be clear what climate finance is. What is going into, and another key comment was that it needs to be based on data. Not just coming up again with $100 billion per annum goal, it needs to be clear why is this number and why are we choosing this number? What is the data and science behind that number? And as you know, these are usually like a global number, but you know different countries get it more than other countries.”
On other area that concerns developing countries, she pointed out that emerging economies were saying that it must be grant based, because they don’t want debt.
Speaking further she said that Africa needs trillions of dollars, not billions. You know per annum and the last comment that I noted was that the financial support must be easily available for developing countries.
“We all know that you know concerns about the current GCF. That is the global climate bond, which is the green climate bond, which is that it has been very difficult for entities to become accredited.
The big pledges are available, but for you to see the money is really hard. So, having participated in these events from Nigeria side because it discussions are still ongoing, negotiations are still ongoing. But we are PUTTRU, we are saying that the “new framework should be equity based, not just grant is important.
“Debt is important, but Nigeria needs to position herself to negotiate that the developed countries are pouring in. Equity investments in infrastructure and I’m going to go into why best grant base is limited. We know how it is. You have a few $1,000,000 for grants, but we need trillions. Although, getting that trillions per grant is very competitive. You need to write several proposals and plan frankly”, she explained further.
There are many good proposals. But what assurances do you have that your good proposal that gets the funding? It’s sometimes it’s very complicated and another key part is that private capital won’t return on their capital.
But we must understand that they also wanted to make money, and don’t want to just support them, because the global goal of energy transition, they want money. “Unfortunately, private capital has most of the funds, and not the public sector, so we need to attract private capital, meaning that we need to have projects that show that this good return on investment.
So, some of the issues why based capital for climate was pushed back during the COP was that most of the developed economies are the ones who caused the climate issues, and as they are learning, as they’re lending funds to developing countries, developing countries are now transferring payments back to developed economies, so there’s just something that is not sitting right because the more that you collect, the more issues you have with borrowing more.
And we’ve seen what happened during the pandemic. Many of our economies entered into debts on sustainability issues. In fact, some had to do their restructuring, like Zambia had to restructure. I’ve heard in the newspaper that there have been conversations on why Nigeria needs to go for restructuring. Restructuring is never good for any country because that immediately makes you like a red flag.
“So, we don’t want to put our developing countries in more debt, we want them to definitely meet the climate goal in a sustainable way in a way that is also just, in terms of the climate conversations. And we are putting forward that Nigeria and developing countries need to pursue equity capital. And the reason is because, the more equity you have, for example, if you have a big portfolio of projects and a big percentage of that is investors money, that’s equity capital, then the need for debt is minimized.
“So, you do not owe anybody. There’s nobody coming back to say, this is the interest, there is a stick ownership in that investment by the investor and we know that equity capital is usually very large. It’s not the $1,000,000, 000 they put here. We are looking for huge trillions of investments. That’s why Nigeria needs to attract the private sector.
“I think one of the good things about having that COP at the Dubai was to see how money comes, where you know where money can be made. I mean the place is spectacular and you can see there’s more construction. There’s more interesting things in Dubai. And these are investors’ money, so, we need to see that kind of dynamics playing for climate finance and also for Nigeria.
“And the last point we noted here was that when we have more investors coming in, whether they’re private or institutional investors, because of that, their track record, more investment capital will come because people want to know why this investor is coming here. There’s something interesting, so let them also do the same.”
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