Nigeria would invest about $50 billion to the development of a domestic biofuel industry, the Central Bank of Nigeria (CBN) said on Tuesday.
The CBN said the Federal Government was interested in developing the country’s domestic biofuel industry to enable it serve as an alternative energy source for Nigeria, hence, the planned funding scheme.
It also said the $50 billion biofuel fund would be contributed by different government agencies and development banks like the Bank of Industry (BOI), Bank of Agriculture (BOA) and Development Bank of Nigeria (DBN).
The contributing agencies, CBN said are relevant to the development of a vibrant domestic biofuel industry for Nigeria.
The Governor of CBN, Mr. Godwin Emefiele stated this at a workshop on biofuel development in Nigeria.
He was represented by Mr. Lawrence Odeh who works in CBN’s Research Department, and noted that the fund would provide credit facilities on favourable terms to the domestic biofuel industry.
The biofuel workshop was organised in Abuja by the Petroleum Products Pricing Regulatory Agency (PPPRA).
Emefiele explained that in addition to earning very good income from biofuel, Nigeria could also rely on it to provide alternative clean fuel to many communal homes, reduce her level of fuel importation, and conserve her foreign exchange.
“Fossil fuel have been and will continue to be the dominant source of energy for sometime, but these category of fuels are non-renewable and raise environmental concerns because they pollute the environment while others are renewable, non-polluting and therefore regarded as clean, thus, they present a viable alternative to fossil fuel and if properly harnessed can be very beneficial.”
“Nigeria potentially have global competitive advantage to be a major player in the industry. In the phase of growing global concerns for protecting the environment, funding biofuel development as a commercial venture is becoming a developmental agenda, to that extent, the scope of funding sources have become variable,” said Emefiele.
He added: “On the domestic front, it is important to note that the Nigerian biofuel policy and incentives draft document has outlined funding arrangements and incentives arrangements for firms involved in biofuel production.
“Government envisages equity funding arrangements to be known as biofuel industry equity fund of $50 billion and to be jointly funded by parastatals and development banks including the Bank of Industry, Bank of Agriculture, and Development Bank of Nigeria.
“When established, the fund is expected to provide credit on favourable terms to meet the peculiarities of the industry in Nigeria.”