The World Bank Failing Nigeria on Climate Goals and Energy Access
The world is faced with an accelerating climate crisis and is already experiencing unprecedented extreme weather events. In Nigeria, 24 percent of the population or about 41 million people live in areas of high climate risks from storm surges, coastal and inland flooding, wildfires and drought. These climate risks further exacerbate the severe fragility and natural resource-based conflicts in Nigeria. Moreover, people living in poverty are the most vulnerable to climate change impacts.
A rapid transformation of the energy sector, from fossil fuels to renewable energy, is needed to combat climate change.
At the same time, the energy transformation must address the energy needs of the poor. Nigeria’s rate of electrification is only 55 percent, leaving more than 85 million people without electricity (the vast majority live in rural areas)
In recognition of these facts,the World Bank Group (WBG) and the government of Nigeria have committed to achieve the objectives of both the United Nations’ Sustainable Development Goal 7 (SDG7) of reaching universal energy access by 2030 and to the Paris Climate Agreement of limiting global average temperature rise to 1.5°C and making financial flows consistent with low greenhouse gas (GHG) development.
A recent review of WBG´s operations in Nigeria detailed in a new report by Recourse, the Swedish Society for Nature Conservation and the African Coalition for Sustainable Energy and Access (ACSEA) found that overall the WBG’s energy sector assistance in Nigeria undermines the Paris Climate Agreement goals and falls short in what is necessary to meet Nigeria’s energy access goals.
Despite Nigeria’s vast potential for renewable energy,the WBG prioritizes fossil fuels over renewable energy. It has provided over five times more funding to fossil fuels than to renewable energy in Nigeria. From 2014 to 2019, the WBG provided $1.8 billion or 69 percent of total energy sector finance to oil and gas projects, including for multiple oil and gas exploration operations and one of the world’s largest oil refineries. [In May, after the report was finalized, the WBG approved more public funding for another oil refinery.] Nigeria is already a top producer and exporter of oil in the world. Using the WBG’s public assistance to expand oil and gas reserves and production is clearly counter to “making financial flows consistent with a low-GHG development path” and therefore, the WBG’s energy portfolio in Nigeria is not in alignment with the Paris Climate Agreement.
In 2018, Nigeria had the most people in the world living without electricity and if the current pace of electrification continues, Nigeria will significantly fall short of universal access by 2030. It is positive that the WBG has ramped up energy access assistance to Nigeria with $350 million. This assistance rightly focuses on increasing rural electrification mainly with mini- and off-grid solar solutions. However, only 13% of WBG energy sector project finance in Nigeria ($350 million out of $2.7 billion) is targeting new energy connections. Further, there is no indication how funding will be sustained or scaled up by either the government or donors to implement Nigeria’s electrification strategy.
Recourse, SSNC and ACSEA call on the World Bank to:
· End all public assistance for fossil fuels and scale up funding for renewable energy, including mini- and off-grid solutions. The WBG need to redirect funding from fossil fuels towards development of Nigeria´s renewable resources. Even the substantial WBG funding for mini- and off-grid solutions in Nigeria needs to be significantly increased and sustained for Nigeria to reach universal access by 2030.
· Provide more and sustained funding for new household connections.Given the WBG’s finance directed at new household connections represents only 13% of its overall energy sector finance in Nigeria, the WBG can and should direct more finance to connections. To reduce uncertainty in funding for Nigeria’s electrification strategy, the WBG should commit to long-term, sustained funding for new household electricity connections.
· Perform a gap analysis on universal access by 2030. Given that the electrification rate is inadequate, the WBG should assist the government to identify where gaps exist and how the gaps will be addressed in order for them to achieve annual electrification targets necessary to reach universal access by 2030.
Co-published with Anna Östergren of Swedish Society for Nature Conservation