Nigeria seeks $50b biofuel equity fund

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The Central Bank of Nigeria (CBN) has revealed the content of a draft document of Nigerian bio fuel policy and incentive which is said to envisage that equity funding arrangement to be known as Bio Fuel Industry Equity Fund (BIEF) of $50 billion will be purely funded by parastatals and development banks,  including the bank of industry, bank of agriculture, Development Bank of Nigeria

CBN Governor, Mr. Godwin Emiefele represented by the Director of Research, Mr. Lawrence Odeh on Tuesday in Abuja at the National Capacity Building & Sensitization Workshop on Biofuels, organized by the Petroleum Products Pricing Regulatory Agency (PPPRA) said that the scope of scope of funding sources include development partners- the United Nations development program (UNDP), United Nations environmental program and the UN habitat.

For this model to be effective, he said there had to be a vibrant private and institutional equity investment outlets alongside relevant source of regulations guiding their operations.

Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachukwu, represented by  Dr. Timothy Okon of the Nigerian National Petroleum Corporation (NNPC) advised that the formulation of a new policy for biofuel should not impose policies that would make the states government lose their shares of monies in the federation account.

He doubted whether the current policy on biofuel has comprehended the fiscal federalism issues in the country, stressing that the federal government should consider funding, food insecurity, energy sustainability and fiscal instability in the proposed policy.

In order to avoid having recourse to the federation account, Kachikwu advised that there must be a prioritization that will not create an uneconomic basis.

The PPPRA Executive Secretary, Dr. Mr. Victor Zamani Shidok said that he was hopeful that should the policy scale through all its processes, its implementation would commence in about three years.

He noted that some crops yield within a year for production but in a maximum of the next three years if the policy is gazette, it should be able to see physical production of ethanol by then.

According to him once the government is done with the ongoing sensitization on biofuel, the next level would be to get experts in the area to come up with clear strategies on how to develop the biofuel for the benefit of Nigerians.

He said that the policy is still at the draft stage, adding that “what we have done at our level coordinated by the PPPRA is to make sure that we bring in stakeholders that are interested in the development of the biofuel to articulate their interest and concerns and send it to the Ministry of Petroleum Resources.”

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