Business

Afreximbank and African oil producers sign historic agreement to float Energy Bank.

Published

3 years ago

May 18, 2022

By Derrick Bangura

Africa’s multilateral trade finance institution, the African Export-Import Bank (Afreximbank), has signed a deal with the African Petroleum Producers Organisation (APPO) for the creation of an energy bank.

The deal followed pressure from Nigeria and other oil-producing African countries to float a bank that will cater to the energy needs of the continent as a result of declining global investment in the oil and gas sector.
Recently, the Minister of State, Petroleum Resources, Chief Timipre Sylva, while marshalling reasons for the urgent need to establish the bank, stated that it will help boost business activities in the sector on the continent.

The Organisation of Petroleum Exporting Countries (OPEC) had recently projected that the global oil industry will require about $12.6 trillion investments in the downstream, midstream as well as upstream to sustain its innovative and production efficiency in the next 25 years.

It warned that Nigeria’s economy as well as those of other resource-dependent countries may be badly affected, especially if the current push against fossil fuels continues to gain ground.

Sylva said since western nations were scaling down funding for hydrocarbon exploration across the world and focusing on renewable energies, setting up an African energy bank remains a viable way to neutralise the threat.

According to the minister, the call for the establishment of the bank is heightened by the passage of the Petroleum Industry Act (PIA), stressing that the Act will open up the oil and gas sector for huge investments, going forward.

“If we insist on the exploration of our oil and gas reserves when the world is cutting down on investments in the sector, we must set a financial institution, an African energy bank, to develop the oil and gas sector,” he insisted.

But during the signing ceremony at the ongoing 8th African Petroleum Congress and Exhibition tagged “CAPE VIII” in Luanda, Angola, the parties explained that the deal was aimed at scaling up private sector investment in African oil and gas projects.

The bank is expected to provide critical financing for new and existing oil and gas projects as well as energy developments across the entire value chain.

While the Director and Global Head, Client Relations, Afreximbank, Mr. Rene Awambeng signed on behalf of the bank, Nigeria’s Omar Farouk, Secretary General of APPO, appended his signature on behalf of African oil producers.

A communiqué by the parties stated that the deal was made possible having regard to the long, mutually beneficial relationship and cooperation between APPO and Afreximbank.

They noted that they were concerned about the threat posed to the African oil and gas industry and Africa’s economic development by the coordinated withdrawal of international trade and project financing from Africa’s oil and gas industry.

According to the signatories , having acknowledged the impact of climate change on Africa and aware that poverty fosters accelerated environmental degradation, there was the need for an orderly and just transition that protects the environment and enhances living standards.

“The two African institutions have resolved to work together to find an Africa-led solution to the threat posed to the African oil and gas industry and an orderly energy transition in Africa by the withdrawal of funding by its traditional financiers.

“The two institutions have committed to taking necessary actions to promote a sustainable and balanced solution to the challenge of financing the oil and gas industry in Africa during the energy transition.

“This will be done through, among others, the establishment of an African energy transition bank dedicated to supporting an Africa-led energy transition strategy that is consistent with the goal of preserving the environment and livelihoods,” the African institutions said.

While the developed world calls for the end of fossil fuels due to climate change, Africa continues to face the crisis of energy poverty.

According to available data, over 600 million lack access to electricity and 900 million lack access to clean cooking solutions, leading to stakeholders calling for the rapid expansion of the oil and gas sector.

Despite these calls, global investors are shying away from hydrocarbons, leaving the continent without the investment it needs if it is to capitalise on its resources.

The African Energy Chamber, (AEC) Q1 2022 report on the state of African energy, says that from the peak in 2014 at $60 billion, capital expenditure in Africa declined to $22.5 billion in 2020.

Despite projected increases to $30 billion, significant levels of investment are still required, and thus, the role of African financial institutions has been emphasised, it said.

Organisations such as the Afreximbank have already made notable progress to drive oil and gas project developments. At the end of 2020, the Afreximbank’s total assets and guarantees stood at $21.5 billion, with shareholder funds amounting to $3.4 billion.

The Afreximbank-APPO MoU, the deal said, is aimed at alleviating these challenges and ensuring the provision of capital for Africa’s upcoming oil and gas projects.

Based in Africa, the bank will operate as an independent entity, regulated and led by experienced professionals that know and understand Africa’s energy needs.

The proposed bank, it said, will not be a substitute for private investment, however, but rather, will serve as a catalyst for Africa-directed investment.

“The African Energy Chamber has been pushing for the creation of an African Energy Bank, one that is African-based and Africa-focused, and I am proud to announce that the Afreximbank and APPO have taken the first steps towards its creation.

“ The bank will be critical for Africa’s energy sector, serving as a catalyst – not a substitute – for private investment in African energy.

“This is a practical strategy for prosperity and a pragmatic vision that must be embraced by all who want to make energy poverty history and fight climate change,” the Executive Chairman of the AEC, N.J Ayuk, said.

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Business

Businesses count losses amid power outage in Bauchi, Gombe, and Jigawa

Published

4 weeks ago

October 28, 2024

Matthew Eloyi

Business owners in Bauchi, Gombe and Jigawa are recording losses due to week-long blackout ocassioned by vandalism of the power transmission line in parts of northern Nigeria.

The sudden disruption in electricity supply in the past days, also affected essential services such as water, sanitation, street lighting and healthcare delivery as most hospitals have been operating without light.

Some of the affected businesses including shop keepers, millers and artisans, who spoke while reacting to a survey by the News Agency of Nigeria (NAN), described the situation as “pathetic”.

The survey examined the perennial collapse of national grid and the need for alternative power supply in the country.

Rice millers in Gombe had decried the impact of the erratic power supply on their businesses.

A Miller, Musa Arab, at Nassarawo Industrial Layout in Gombe, said the trend was crippling their operations as they relied on electricity supply from the grid to process paddy.

He said the mills were not operational power outage as they could not afford exorbitant pump prices of petrol or diesel to run their machines.

This, he said, reduced the volume of rice supply to the market and posed serious challenge to food security.

“We must invest in power because it is the biggest determining factor for industries to thrive.

“I have over 20 workers in my mill, and we have 100 mini rice mills here, so you can imagine those who have no jobs for the past 10 days.

“Government must go tough on those responsible for the perennial grid collapse because some persons may be benefitting from it,” he said.

Also, Yusuf Ibrahim said the situation might trigger the already fragile inflation, as prices of local varieties would shot up ocassioned by the diminish supply.

He said that some had jerked up their charges to cover the expenses on diesel thereby affecting rice prices.

A check by NAN at the Gombe Main market showed that a 100 kilogramme of rice was sold for between N120,000 and N160,000, as against N110,000 and N150,000, before the blackout.

Mr Usman Sani, a rice dealer, attributed the hike in price to low supply of the produce to the market in spite of the number harvest recorded this cropping season.

He said the prices had decreased slightly at the onset of the harvest, however, it showed sprawling increase due to power outage.

“The price of rice is already dropping as a result of harvest but the trend reverse since the blackout in the past days “ he said.

Ugochukwu Daniel, a bartender in Bauchi, decried the epileptic power supply in the country, adding that lack of durable energy supply would retard Nigeria’s quest to attain social and economic greatness.

Daniel said that she spent much on fuel to run power generator for refrigrator and lightening the beer parlour, to enable her to keep the business running.

He said that businesses could only thrive in an enabling environment with stable electricity supply, to enhance wealth creation and reduce poverty among Nigerians.

“My trade is about chill drinks and it survives on electricity to operate otherwise you will out of bussiness.

“Without electricity there is nothing you can do, and not only business but about everything. We depend on it,” he said.

Similarly, Samuel Adamu, said the persistent power outage had forced him to patronised charcoal for ironing clothes in spite of its high cost and cumbersome processes.

He said that most cleaners in the area had resorted to fabricated iron charcoal in spite of hike in its prices which suddenly jumped from N5,000 to N15,000.

Adamu said the situation also encouraged division of labour in laundry to cut cost and make some gains.

“Presently, I do wash the cloth, and engage someone for ironing. The charge is N300 per set as against N150”.

While advocated development of renewable energies to enhance power supply in the country, Adamu urged security agencies to entensify efforts towards electrical installations in the country.

In the same vein; Mr Muhammad Adamu, Chairman, Jigawa State House Assembly Commitee on Power and Energy, said the Jigawa Electricity Law 2024, made sound provisions to improve power generation and distribution in the state.

This, he said, was an offshoot of the devaluation brought about by the 5th alteration of the constitution, where removed power from the executive legislative list and to the concurrent list.

“It empowered the state houses of assembly to enact laws on power.

“The committee has also carefully pursued the bill and reviewed its structure and the promise it holds for the state power sector, infrastructure and the overall economy of the state.

“The new law will pave way for the establishment of Jigawa Electricity Commission, to regulate the state’s electricity market,” he said.

According to Adamu, the law will protect residents and investors in the energy sector through ensuring prepaid meter installation and possibility of recouping investor’s funds as well as address vandalism.

“The law will lead to provision of reliable, affordable and sustainable power, essential for development of all sectors of the economy, particularly in rural areas,” Adamu said.

“Vandalism will be over because we pay Kano Electricity Distribution Company (KEDCO) money for powered supplies, but whenever there is problem of damages or broken down transformers, it is either the communities or individuals that pay for the repairs”.

Business

Mercedes urges delay of EU tariffs on Chinese electric vehicles

Published

1 month ago

October 21, 2024

Matthew Eloyi

Mercedes urges delay of EU tariffs on Chinese electric vehicles

The head of German luxury carmaker Mercedes-Benz, has called for the European Union to de-escalate the dispute with China over tariffs on electric cars.

“We need more free trade instead of new trade barriers.

“That is why it is important to find a solution that suits both the EU and China,” chief executive Ola Källenius told the Monday edition of Bild newspaper.

“The negotiations for this take time. In order not to jeopardise them, the EU should postpone the enforcement of the planned tariffs,’’ he said.

At the start of the month, a majority of EU countries paved the way for additional tariffs of up to 35.3 per cent on battery-powered electric vehicles imported from China.

Germany, however, voted against the measure amid concerns over retaliatory actions which could hurt the country’s giant car industry.

The European Commission had pressed for extra tariffs after an investigation accused Beijing of subsidising domestic electric car manufacturers, and thus distorting the market in the EU.

But whether the import tariffs would actually come into force at the beginning of November is still up to the commission.

The plans can still be dismissed if Brussels reaches a solution with China at the negotiating table.

Business

ACCI moves to promote business connections, balance work-life

Published

1 month ago

October 16, 2024

Matthew Eloyi

ACCI moves to promote business connections, balance work-life

The Abuja Chamber of Commerce and Industry (ACCI), is taking innovative steps to enhance professional relationships and promote a healthy work-life balance.

The President of ACCI, Dr Emeka Obegolu, said this in a statement on Tuesday in Abuja.

Obegolu said ACCI was committed to creating environments where professionals could connect beyond the confines of traditional boardrooms.

He said the upcoming “Business Meets Golf’’ Tournament epitomises this vision.

“Scheduled for Oct. 18 to Oct 19 at the IBB Golf Club, the tournament will gather industry leaders, top executives, and key decision-makers for a unique networking experience.

“This two-day event aims not only to strengthen business ties but also to foster partnerships that can drive economic growth.

“The ACCI’s initiative reistates the importance of maintaining a balance between professional achievement and personal well-being.

“By encouraging corporate cultures that prioritise relaxation and self-care, the Chamber acknowledges that such balance is vital for productivity and overall success,” he said.

According to Obegolu, the event will feature a range of activities designed to facilitate both business engagement and relaxation.

“Highlights include a Business-to-Business (B2B) cocktail on the first day, followed by the golf tournament and additional networking opportunities on the second day.

“The tournament will culminate in an awards ceremony recognising outstanding golfers among the participants.

“‘Business Meets Golf’ exemplifies our dedication to fostering innovative networking opportunities.

“We aim to create spaces for meaningful discussions that can lead to impactful collaborations,” Obegolu said.

The ACCI boss said in addition to promoting business connectivity, the council aimed to restate the importance of relaxation and a balanced lifestyle.

Obegolu said through events like this, the Chamber continued to play a pivotal role in supporting trade and industry in Nigeria while driving sustainable growth within the private sector.

He said to raise awareness about this landmark event, ACCI was partnering with the News Agency of Nigeria (NAN) and Media Trust Limited, to ensure broad visibility and engagement from leading brands.