biogas energy development in nigeria and potential partners
TRANSCRIPT
Microfinancing Bioenergy Project in
Nigeria and Potential Partners
Case study: Awka city, Anambra state
Presented by Alex Dubem Tagbo (M.Sc)
2014
M I C R O E N E R G Y
I N T E R N A T I O N A L
M I C R O E N E R G Y
I N T E R N A T I O N A L
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for
Table of contents
1) Introduction
2) MFIs in Nigeria
3) Business model approach for the MFIs
4) Relevance of micro-credit on SMEs in Anambra state
5) Financing biogas energy access
6) Potential energy partners
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1. Introduction
The energy situation in Nigeria The energy resources in Nigeria include: crude oil, natural gas, coal, tar
sand and renewables (biomass, hydro, wind, solar etc.)
Current estimated oil reserve in Nigeria is 35.9 billion barrels with daily
production capacity of 2.4 million barrels of crude oil.
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This will be depleted by 30-36 years period
Renewable energy resources will increase supply and reduce the
demand on oil reserve.
Source from oil and gas journal, 2007
Nigeria`s renewable energy
resources
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Energy source Capacity
Hydropower 3,500 MW
Fuelwood 13,071,464 hectares
Animal waste 61 Million tonnes/yr
Crop residue 83 Million tonnes/yr
Solar radiation 3.5 – 7.0 KWh/M2- day
Wind 2 – 4 m/s (annual average)
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Anambra state
(75)
2. MFIs in Nigeria
CBN
Nigeria
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CBN ranks Anambra 2nd in microfinance banking Source from the sun newspaper, business article, 14th november 2014
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MFI ID MFI name
Current
legal
status
Currency Fiscal Year Period Gross Loan
Portfolio Equity Deposits Borrowings
Capital
/asset
ratio
Return
on assets
Return
on
equity
Write-
off ratio
Operational
self sufficiency
Portfolio
at risk
> 90
days
101928 AMfB Bank USD 2010 ANN 6.835.159 8.440.753 1.939.094 996.475 69,31% 7,13% 11,49% 5,41% 129,89% 3,72%
101928 AMfB Bank USD 2011 ANN 9.805.111 9.074.716 2.661.958 933.812 63,91% 11,58% 17,44% 2,53% 147,93% 2,01%
101928 AMfB Bank USD 2012 ANN 12.124.656 10.886.391 3.479.411 969.990 64,32% 11,42% 17,80% 3,02% 145,42% 2,74%
115221 Hasal
MFB Bank USD 2010 ANN 3.536.697 2.642.382 13.205.632 0 16,27% 105,85%
115221 Hasal
MFB Bank USD 2011 ANN 4.570.407 3.265.234 11.624.309 0 21,36% 3,89% 20,76% 0,11% 120,24% 6,97%
115221 Hasal
MFB Bank USD 2012 ANN 6.191.201 4.368.902 10.789.452 1.280.820 25,05% 3,91% 16,74% 0,77% 121,58% 5,89%
100541 LAPO-
NGR Bank USD 2010 ANN 48.808.947 11.336.039 33.802.000 ######### 17,34% 4,81% 24,54% 0,00% 133,34% 1,12%
100541 LAPO-
NGR Bank USD 2011 ANN 70.247.885 13.760.968 43.239.531 ######### 15,90% 5,19% 31,43% 0,19% 133,84% 0,77%
100541 LAPO-
NGR Bank USD 2012 ANN 108.410.676 24.955.287 62.715.664 ######### 18,88% 9,53% 53,82% 0,34% 140,20%
100336 SEAP NGO USD 2010 ANN 26.231.534 7.791.045 19.239.969 211.999 27,31% 13,75% 74,41% 0,05% 163,93%
100336 SEAP NGO USD 2011 ANN 40.709.757 11.874.092 30.021.544 6.165 27,62% 13,32% 48,44% 165,54% 0,05%
100336 SEAP NGO USD 2012 ANN 59.419.085 19.587.861 42.264.282 0 31,12% 13,51% 45,50% 0,00% 185,81%
KEY INDICATORS
ROE > 0%
ROA > 0 %
Write off-ratio < 6%
OSS > 100%
MIX MARKET ANALYSIS
3. Business model approach for the MFIs (Grameen Shakti)
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MFI/ Technology
company
MFI/ Technology
company
CONSUMERS / MICROENTREPRENEURS CONSUMERS / MICROENTREPRENEURS
MICROFINANCING
Down payment
Collection of
installments
Recovery in case of
failure
MICROFINANCING
Down payment
Collection of
installments
Recovery in case of
failure
INSTALLATION/
CONSTRUCTION
Marketing
Biogas plant / anaerobic
digester construction
Customer training
INSTALLATION/
CONSTRUCTION
Marketing
Biogas plant / anaerobic
digester construction
Customer training
AFTER-SALES
Service guarantee
Maintenance
Spares
System up-grade
AFTER-SALES
Service guarantee
Maintenance
Spares
System up-grade
establish
BIOGAS CONSTRUCTOR
End-user Energy Service
company Supplier
Credit Provider
The O
ne-H
and m
odel
The O
ne-H
and m
odel
Fee fo
r
Service
4. Relevance of Micro-Credit on
SMEs in Anambra State
Micro credit institutions have impact on setting up new business
Micro credit institutions do not have significant effect on survival of
SMEs
They do have significant effect on growth of SMEs in Anambra state
Collateral requirements on SMEs do not have significant effect on
obtaining credit facilities from micro credit institutions.
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The impact of MCI on the development of SMEs
and its percentages (Cont.)
IMPACTS PERCENTAGES (%)
Business start-up 18.08
SMEs survival 22.38
SMEs growth 16.69
Collateral requirement 34.35
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Source from Ndife C. F., the impact of micro credit institutions on the development of SMEs IN Anambra state, Vol. 14,
Issue 5 (Nov.-Dec. 2013), PP 75-81, www.iosrjournals.org
5. Financing biogas energy access
Electricty (off grid and
mini grid)
Cooking and lighting
(biogas, advanced
cookstoves and anaerobic
digesters)
Grants
Equity
Loans
Return on investment
(ROI)
International agencies
Government at all
levels
State ministry of
science & Technology
Commercial banks &
MFIs
NGOs
Public and private
sectors
Financing sources Financing sources Financing
instruments
Financing
instruments
Technology
solutions
Technology
solutions
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6. Potential energy partners
Funding sources Examples
1. International agencies
GIZ Nigeria
UNDP
EU
AFD Nigeria
2. Government agencies Federal Ministry of power and energy
State ministry of science and technology
State ministry of environment
Local government Area
3. National agencies Nigeria Energy Support Programme (NESP)
Energy Commission of Nigeria (ECN)
4. Commercial Banks & MFIs Fidelity bank, Access bank, Unity bank, Zenith bank,
Microfinance banks and African Development bank
5. Public and private investment Energy investors and Entrepreneurs
6. Research Institute National center for energy research and development in
Enugu state
7. NGOs Heinrich Böll Foundation Nigeria and Leadership for
Environment and Development (LEAD) Nigeria
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GIZ in Nigeria GIZ supports MSMEs and it is co-financed by EU and the Bill & Melinda gates foundation on behalf
of BMZ.
Most project works in Nigeria are commissioned by the German Federal Ministry for
Economic Cooperation and development (BMZ).
They act as implementing agencies for delegated cooperations of EU
GIZ engage in the field of renewable energy (RE) and energy efficiency (EE) contributing to a
bilateral Nigerian-German Energy relationship
It receives grants for project initiatives and business start ups
Areas of implementation:
1. Financial system development
2. Improve the environment for business and investment
3. Promotion of value chains in renewable energy
4. Trade facilitation
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UNDP energy program
Access to renewable energy
Promoting energy efficiency in
residential and public sector in
Nigeria
Federal climate change and
environmental governance
Provides viable solution in
economic and technical aspects
Supports replication of projects
through out the country
Grant donor
Photo (UNDP Nigeria): Energy cooking
stove
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3 outcome areas towards access to renewable
energy programme
It facilitates an expansion of renewable energy services accessible to
MSMEs
Support renewable energy investments by building up capacity within the
financial sector as well as among users and providers of energy services
Promote policies and institutional frameworks for an inclusive renewable
energy market
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Accomplishments of UNDP in
various states
Development of
renewable energy
policies in: Anambra*
Lagos
Niger
Sokoto
Pilot renewable
energy projects on
commercial basis: Sokoto
Ogun
Anambra*
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*the only state in the South eastern Nigeria supported by UNDP for providing banking solutions for renewable
energy projects
Nigeria and European Union
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Renewable Energy: In 2014, the European Union (EU) supported the Nigerian government with a 3.4 billion naira
grant (16.2 million Euros) to boost its renewable energy development programme and its
committment to getting electricity to a greater number of Nigerians.
Objectives:
Improving the conditions of investment in renewable energy, energy efficiency and rural
electrification
Making youths and communities to be stakeholders in the ownership of RE projects
Enabling policy, institutional and regulatory framework conditions from the federal level
Source from online: premium times, 17th July 2014
AFD Nigeria
AFD contributes to economic and social development in its geographical areas of
operation
Committment in Public-Private Partnerships development
AFD receives public resources (grants and interest subsidies) to implement the
projects it supports and raises funds on international markets, as well as on its own
resources
AFDs financial engineering support:
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Class of country Financing instrument
Poor countries grants
Middle income countries Loans & technical assistance
Nigeria Energy Support Programme (NESP)
It is aimed at supporting the Nigerian Federal Ministry of Power (FMP)
and other public and private partners to improve access to sustainable
energy.
NESP’s activities are focused in the following:
policy reform and on grid policy renewable energy
Energy efficiency
Rural electrification and sustainable energy access
Capacity development
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Energy Commission of Nigeria
The commission has been undertaking the following activities:
Energy and rural development
Energy policy and planning
Energy supply and demand projections
Energy research and development
Energy information activities
National and international cooperation in energy
These activities of the Energy Commission of Nigeria are carried out by the
Departments at the Headquarters and the Energy Research Centres located at
Nsukka*, Sokoto, Lagos, Bauchi, Ilorin and Benin
*Nsukka is a University town in Enugu state (South eastern region) where the renowned energy research center
is located.
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National center for energy research and
development Nsukka-Campus
Photos showing some pilot biogas
projects carried out by the institute
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NCERD Nsukka (Cont.)
The national center for energy research and development institute is located at the
University of Nigeria, Nsukka campus in Enugu state.
As earlier mentioned, Nsukka is one of the energy research centers where the
Energy commission of Nigeria (ECN) carry out their activities such as energy data
collection, statistics etc.
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DESCRIPTION OF PILOT BIOGAS PROJECT
Name of project Fixed dome biogas digester
Purpose of project Women cooperative garri processing
Feedstock
Droppings of domestic animals, cassava peels,
waste from the milling of cowpea and
bambara nut
Total cost 700,000 Naira (3,500 Euros)
Executed by NCERD/UNN
Selected Banks
African
development
Bank
Fidelity Bank
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African Development Bank
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Headquarter Tunisia
Area of interest 1. Low carbon development
2. Cleaner energy technologies
3. Increased use of renewable energy and
energy efficiency
CDM Projects 1. Domestic biogas-digesters project in
Zambia
2. Lagos cable propelled transit project in
Nigeria
3. Concentrated Solar Power plant project
in Morocco
4. CODER hydropower project in Gabon
etc.
Financing instrument Concessional loans
idelity Bank
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Location Nationwide
Bank type Commercial
Partnership Shareholders, associations,
business institutions and
international business community
Projects Not specified
Financial instrument ROI, surplus fund (excess loan)
with interest rate of 4 to 5%,
especially for the private sector
NGOs:
Office location Abuja
Motto Green Deal Nigeria
Area of interest Renewable energy (solar, wind &
biomass), ecology, climate change and
environment
Published papers 1. Solar powered water in Edo state
2. Corruption in Nigerias oil sector
3. Clean energy for all Nigerians
4. Papaya power
Partnership Grammer solar
Type of finance Grant and loans
Financed by Federal ministry of education and
research Germany
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LEAD Anglophone West Africa
Branch location Nigeria
Mission Sustainable development
Capacity building
Issue-oriented action projects
Area of interest Renewable energy Technology
Environment
Workshops Clean energy efficiency
Energy policy decision making
RETScreen tool utilization
Finance instrument Not specified
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LEAD is a non-profit organisation that stands for Leadership for
Environment and Development
Recommendation
Linking biogas initiative with MFIs, stakeholders
and government at all levels.
Involvement of international donors to
intervene (action-oriented).
Government should assist MFIs in developing a
concessional loan to ease project.
Creating a national/state biogas program
scheme to promote bioenergy projects e.g. in
Senegal and Burkina faso
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