Transiting from fossil to green energy requires $10bn – Presidency

By Tunde Opalana

The Presidency has disclosed that Nigeria will be commiting not less than $10 billion in finance to an holistic transition from fossil energy to a cleaner green energy.

Vice President Kashim Shettima disclosed this Friday in Abuja at a one-day Energy Transition Symposium organized by the Development Agenda Magazine in conjunction with the Ford Foundation.

Represented by Sadiq Wanka, Special Adviser to the President on Power and Infrastructure, the Vice President said transiting from fossil to green energy will be a bold action to stem the deleterious impact of climate change and improve on rapid economic development that enhances the livelihood of Nigerians.

He lamented that 45% of Nigerians are lacking access to electricity, and her GDP per capita that is half that in Egypt and that Nigeria today has the highest rate of deforestation in the world as people depend primarily on biomass for energy generation.

However, he said, full implementation of the Nigeria Energy Transition would not be easy as it will require concerted effort locally and international collaboration to source financing and of prepare the nation’s workforce for a Net-zero economy.

He said ” It we take the issue of financing alone, funding the energy transition requires investments of over $10 billion per year up to 2060.”

Majority of this money, Shettima added, “would necessarily come from the private sector including through initiatives to access high-integrity carbon markets. But we are up to the challenge. The administration of President Bola Ahmed Tinubu is willing to take the difficult decisions and the rich resource base and depth of human capital in our dear country will ensure our success.”

Speaking further on the Nigeria energy transition plan , the Vice President said
the Energy Transition Plan in Nigeria balances the need for the country to rapidly industrialise and develop and the need to address critical environmental challenges that are not just a distant concept, but an immediate reality.

“The energy transition plan is very clear on the need for Nigeria to become a net-zero economy by 2060. But it does so with the critical realisation that we must maximise our petroleum resources in the short term to provide the base load energy for that would turbocharge the economy. In particular, there is a strong government drive to push hydrocarbon investments up to 2030 before a gradual phase-out post 2030.

“In 2021, Nigeria declared the 2020s the Decade of Gas. At the heart of the decade of gas, is improving fiscal terms and targeted incentives that would unlock up to 10 billion sef/ day of gas supply by 2030 to be channelled to serve the power sector, commercial sector and gas-based industries. Critical to this unlock is a focus on non-associated gas which constitutes the lion-share of the over 200 trillion cubic feet of proven gas reserves in the country.

“This Administration led by President Bola Ahmed Tinubu has already made a number of notable interventions within its first year in office. In February 2024, the President signed three executive orders as part of the Government’s commitment to make Nigeria a destination of choice for oil and gas investments.

“These included specific tax credit incentives for the development of greenfield Non-associated gas fields. Only projects that are developed by January 2029 are eligible for announced incentives, aligning with the country’s plan to rapidly develop gas assets before beginning to taper development.

“The other two executive orders pertain to ensuring that local content requirements do not hamper investments and that contracting costs and timelines are brought in line with global best practice (reducing contracting cycles by 4 to 6 times),” he added.

In his keynote address, a global energy expert and former minister of power in Nigeria, Prof. Barth Nnaji the symposium is timely because climate change which is one of the consequences of fossil energy is an essential issue that is not guided by time and logics.

He blamed international oil companies and their local counterparts as well as state actors as culprits in the retention of the fossil energy generation in the country.

Prof. Nnaji said campaign for cleaner energy is commendable but developing countries including Nigeria have not been sincere in running a transparent transition plan.

He also said most of the developing oil producing nations do not trust the transition campaign by the western world which are largely hypocritical.

Prof. Nnaji said Nigeria as an oil producing nation has the capacity to produce arrays of commodities but many industries are being hampered by unresolved in the energy sector.

Also, Professor.Chukwumerije Okereke presented a virtual keynote address while seasoned panelists discussed the two addresses.

The convener and publisher of Development Agenda Magazine, Paddy Ezeala said the symposium was put together to explore factors and opportunities in mitigating the expected negative effects of government’s energy transition programmed on Nigerians, including how to ensure that impacted communities are helped and how to secure justices for residents of those communities.

According to him, “as the world seeks to pivot away from fossil fuels less polluting cleaner energy sources, countries of the global south and their citizens are palpably disadvantaged – either as inheritors of the burden of extraction or of lack of resources and technology to compete”.

He said although Nigeria has adopted gas as it’s transition energy , it will have to deal with a future when fossil fuels are no longer marketable. There’s going to be profound social and economic implication.