As part of the US-backed Power Africa initiative, the World Bank Group has disclosed plan to commit $5 billion in new technical and financial support for electricity projects in six African countries.
The countries are Nigeria, Ethiopia, Ghana, Kenya, Liberia and Tanzania. They are all partners in the President Barack Obama led Power Africa initiative which aims to increase access to electricity of citizens in African countries.
The World Bank's financial commitment which was announced at the inaugural United States-Africa Leaders Summit by the President of World Bank Group, Dr. Jim Yong Kim.
This however coincided with the resolution of the Nigerian Electricity Regulatory Commission (NERC) to get distribution companies in the country to compensate individuals, communities and resident associations that invest funds to support access to electricity in their respective neighborhoods.
In a statement from the World Bank in Abuja yesterday, Kim said the new financial commitment was urgently needed to generate more electricity for the people of Africa, 600 million of whom have no access to electricity, despite the fact that Africa possesses some of the world's largest hydropower, geothermal, wind and solar potential, as well as significant oil and natural gas reserves.
"We think that the US Power Africa initiative will play an extremely important role in achieving the goal of providing electricity for Africa. So today, I'm very pleased to announce that the World Bank Group, following President Obama's lead, will partner with Power Africa by committing $5 billion in direct financing, investment guarantees, and advisory services for project preparation in Power Africa's six initial partner countries, Ethiopia, Ghana, Kenya, Liberia, Nigeria, and Tanzania.
"The US government and the World Bank Group are working now on specific tasks and milestones which could help to achieve one quarter of Power Africa's goal of generating 10,000 megawatts of new power in sub-Saharan Africa," Kim said.
Africa's power crisis forces families and communities to spend significant amounts of their income on costly and unhealthy forms of energy, such as diesel generators or wood for indoor cooking fires.
Also, Africa with its vast hydropower potential uses just 8 per cent of its untapped water force in comparison with Western Europe which uses 85 per cent of its available hydropower potential and which has contributed to their economic development and industrialisation.
The statement also quoted the World Bank's Vice President for Africa, Makhtar Diop to have said: "Like Europe and the rest of the world, Africa deserves the same opportunity to exploit this green source of power to improve the lives and economic prospects of its people.
"Beyond building up power generators, they must be connected to the market, which calls for regional cooperation to build the transmission network. We are working with African leaders and their development partners to create power pools in Africa's East, West, Central, and Southern sub-regions."
Meanwhile, the Chairman of NERC, Dr. Sam Amadi said at a public consultation on its drafts of two new regulations on review of electricity rate and investments in electricity networks that the commission was seeking to get distribution companies compensate customers who make investments to support access to electricity in their neighborhoods.
Amadi explained that the regulation on investments in electricity networks was meant to protect the interests of customers such as community and resident associations who procure electricity equipment like transformers, poles and wires to provide access to electricity within their neighborhoods.
He further explained that the regulation as part of other expectations will also help the commission regulate extant propensity for people to commit funds into procuring electricity equipment without due consideration to standards.
"The regulation on investment is very important. Many communities are making investments in the network, they are saying we provide transformers, we pay fixed charge and at the same time we do not get the power.
Now, we are saying if people make investments in the network whether as individuals, community or government, the Disco in that jurisdiction has the responsibility to have to repay those people or find a way through energy credit to make them not have double payments.
Otherwise it will be very wrong for them to make investments and at the same time they cannot recover and they still pay the same amount of money," Amadi said. He noted that the regulation would be critical in addressing the concerns raised by operators in the market and consumers.