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Global funding shifting from oil to clean energy – Experts

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FUNDING from international organisations such as World Bank and International Finance Corporation (IFC) are shifting away from oil to clean energy, finance and energy experts have said.

Findings by The ICIR show that some lenders to International oil companies (IOCs) are seriously emphasising clean energy investments in line with global energy transition. This development, energy analysts say, could threaten Nigeria’s reliance on oil since IOCs own as much as 45 percent stake in the country’s oil blocs.

“International lenders, comprising mainly of World Bank and IFC, are now very attentive where they invest their money. They want to see green-friendly companies investing in clean energy,” executive director and the chief finance officer of  Total E&P Nigeria Tai Oshinaya told The ICIR on the sidelines of the just-concluded Oloibiri Lecture Series and Energy Forum in Abuja.

She said Total E&P Nigeria had devoted efforts towards transition to cleaner, affordable energy, being a member of the Paris Climate Change.

“Lenders have put stringent measures on environmental issues, and safety guides must be urgently passed to have better fiscal framework to drive investments in place. We still need oil and gas to fund the clean energy space, which is why the Petroleum industry Bill (PIB) is needed to drive this.”

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Clean energy is energy from renewable or zero omission sources, according to PWI Global, a group that offers expert advice on engineering and science. The World Bank and other funders have been criticised for funding fossil fuel, including oil, gas and coal, thereby supporting emissions. Consequently, the World Bank is pumping money into clean energy, approving $6.9 million in September 2020 in additional financing for the Haiti: Renewable Energy for All Project.  The IFC is also supporting many clean-energy projects in Africa and beyond.

Managing director of AITEO E&P Limited Victor Okoronkwo said leveraging the country’s natural gas potential would drive the electricity sector in the country, stressing that global energy shift equalled energy transition. Okoronkwo urged the government to use revenue from gas to electricity in driving clean energy initiatives.

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Energy analyst and managing director of Anoh Gas Processing Company Okey Mbah told The ICIR  that there was a need for Nigeria’s gas revolution to be done in a cost-efficient manner in line with global climate change realities.

“We should begin by emphasising gas-fired generators instead of diesel fired generators. It is a lot cheaper to generate electricity through gas-fired stations, but it requires lots of funding for us to deliver that energy transition, ” Mbah said.

“For us today in Nigeria, the way out is to look at the gas portfolio and begin to develop them, creating positive impact by displacing diesel with gas and LPG and gradually prioritising energy transition direction,” he further said.

SPECIAL REPORT: In Nigeria, citizens pay more for darkness than electricity

Nigeria is currently banking on its National Gas Expansion Programme,  which seeks to provide alternative source of energy from oil, but energy analysts say the country needs to attract greater funding options through enabling policies in clean energy.

Industry analysts say passage of the Petroleum Industry Bill will provide a better framework to enable funding partners invest in the country’s vast gas resources.

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