NEITI: Sourcing $1.9tn Funding for Nigeria’s Energy Transition Programme Will Be Challenging

Emmanuel Addeh in Abuja

The Executive Secretary of the Nigeria Extractive Industries Transparency Initiative (NEITI), Dr Ogbonnaya Orji, yesterday said that sourcing the $1.9 trillion for Nigeria’s Energy Transition Programme remains a challenge.

Orji spoke at the a programme in Abuja themed: “Strengthening Methane Emission Reduction Strategies in Nigeria’s Gas Expansion Plans”, organised by the Natural Resource Governance Institute (NRGI).

However, Orji stated the recent constitution of a Presidential Committee on Climate Action and Green Economic Solutions and appointment of focal persons were fundamental steps taken by government to redefine the country’s necessary next steps going forward.

He explained that it was important that Nigeria incorporates methane emissions reduction/control as part of its key agenda in the country’s response to energy transition.

The global transition from fossil fuels to renewable energy sources, he said, poses significant risks to countries that depend heavily on hydrocarbon-based natural resource revenues for survival.

The fear of the known risks in most of the affected countries, Orji said, far outweighs the potential unknown opportunities, stressing that the reality, concerns and apprehension informed why most of the countries chose to approach the energy transition debate with measured steps.

According to Orji, the main trust of the plan is to cut carbon emissions including methane emissions reduction or total elimination and provide the infrastructure for renewable energy.

The other key objectives, he said, include economic growth through energy access, energy efficiency, energy security, environmental sustainability, economic diversification, job creation among others.

“To address these needs and more, the Nigeria Energy Transition Plan (NETP) estimates that $1.9 trillion would be required. This translates to spending about $10 billion annually and investment requirements of nearly $40 billion annually to achieve the country’s transition targets by 2060. The plan relies on private capital, mostly from foreign investments for sustenance.

“The challenge of implementing Nigeria’s energy transition plan and achieving net zero target by 2060 is reflected in the huge financial resources required to produce renewable energy to meet domestic industries demands and our large population of over 200 million which is even projected to exceed 400 million by 2050.

“This is why NEITI publicly welcomed the recent demonstration of commitment to address the climate change, energy transition and environmental sustainability challenges by President Bola Tinubu administration,” he explained.

However, NEITI, he said, has made a strong case to the president for a seat on that presidential council for several reasons.

“Besides, energy transition seeks a global shift from fossil fuels to renewable sources of energy. This global shift will certainly require sustaining the ongoing reforms of the extractive industries which is at the heart of the work of Nigeria Extractive Industries Transparency Initiative.

“In this respect NEITI’s legitimate interests in the Climate Change, Energy Transition and Green Economic Solutions discus are institutional, legitimate and multi – dimensional,” Orji said.

He reiterated that NEITI’s recent report on the oil and gas industry disclosed a total unremitted revenue of gas royalty payments of $559.8 million and another unremitted sum of $828.8 million from unpaid gas flare penalties.

 A close look at these figures, Orji explained, indicated that about 10 per cent of gas was flared during the period, thereby posing serious dangers to the country’s commitment for total gas flare out by 2025 which is just one year away and global commitment of 2030 which is less than six years away.

 “Apart from gas flare, another major source of dangerous emissions, massive environmental pollution and damage to the eco systems is oil theft, illegal refineries, pipeline vandalism.

“Data from NEITI Reports between 2009 and 2021 disclosed that Nigeria lost 619.7million barrels of crude, valued at $46.16billion or N16.25 trillion  between 2009 and 2020.

“In addition, Nigeria lost 4.2 billion litres of petroleum products from refineries, valued at $1.84 billion at the rate of 148,000 barrels per day, from 2009 to 2018,” he pointed out.

Thus, he stated that the total value of crude losses between 2009 and 2020 was higher than the size of the country’s foreign reserves and almost ten times of Nigeria’s oil savings in the Excess Crude Account.

“While the loss in revenues could be computed, the damage to the environment, community health, livelihoods through dangerous emissions is difficult to quantify,” he argued.