HomeIndustry SectorsGenerationCoal to power: AfDB commits $200m to Nigeria's 'dirty fuel'

Coal to power: AfDB commits $200m to Nigeria’s ‘dirty fuel’

coal to power
The AfDB supports coal-to-power in Nigeria as part of efforts to improve the electricity industry

In Nigeria, the African Development Bank (AfDB) has put up $200 million (ZAR2 billion) as a partial risk guarantee for the Nigerian power sector.

The federal government will use the funds for expansion of coal-fired power plants.

Managing director of the Nigeria Bulk Electricity Trading (NBET) Rumundaka Wonodi welcomed the AfDB’s commitment saying that it is “an African solution to an African challenge”, The Guardian reported.

“We are working with the World Bank for [a] partial risk guarantee to support the projects that we undertake; unfortunately, the World Bank is very reticent and they are not quite committed to giving support to coal, because they deem it to be dirty fuel and not very good for the environment. However, the AfDB, which is African and understands that Africa needs power from every source that it can, is supporting coal,” Wonodi explained.

Wonodi continued: “We welcome that and they offered to provide it in support of some of the projects that we are working on like the Zuma energy if they feel that it is necessary and some of the other coal projects that we see around the country.”

Nigerian coal to power

Three coal-fired power plants supported by the Nigerian government include the 500MW One Nation Energy Platform, 1000MW Atlas Petroleum and 1200MW Zuma Power.

Commenting on NBET’s statutory request for bank guarantees from electricity distribution companies for the supply of electricity in the Transitional Electricity Market (TEM), Wonodi added that out of 11 distribution companies, eight have submitted Letters of Credit to NBET.

“Currently, we have about eight of the distribution companies that have posted their LCs which shows that they are comfortable and confident that this market can take off the way it was designed to be,” Wonodi concluded.

Nicolette Pombo-van Zyl
As the Editor of ESI Africa, my passion is on sustainability and placing African countries on the international stage. I take a keen interest in the trends shaping the power & water utility market along with the projects and local innovations making headline news. Watch my short weekly video on our YouTube channel ESIAfricaTV and speak with me on what has your attention.