A former Nigerian president, Chief Olusegun Obasanjo has asked the federal government to take seriously the growing pivot of the global energy production and supply to renewables which he said are proving to be cheaper and sustainable energy supply sources.
Obasanjo also said the concentration of the government on fossil fuel power generation and large hydro power projects could be uneconomical following the country’s economic slump.
Specifically mentioning the 3010MW Mambilla hydro power project, Obasanjo said it was good enough to do the project but that it (Mambilla) cannot become economical in the phase of the growing shift in global energy market.
He spoke in Lagos during a lecture for Akintola Williams, the first African to qualify as a chartered accountant, where he offered his views on the decision of the federal government to borrow $30 billion to finance the country’s infrastructure projects.
“The projects listed for borrowing are all necessary in the medium and long-term for our economy but we have to prioritize,” said Obasanjo.
According to him: “Railway is a necessary service but it is not profit-making anywhere in the world today. We need steady and continuous but manageable funding on the railway project.
“The Mambilla hydro project is the same; necessary but it cannot pay itself, especially with the global energy sector of shale revolution, hydrogen fuel and increasingly cheap renewable energy such as solar energy.
“OPEC itself has projected that the price of oil will be hovering in the region of $50 per barrel for the next 15 years or so. So, the argument of concessional mixed with commercial loans does not hold water.”
He further added on the planned borrowing: “When the concessional and the non-concessional borrowings are put together, interests alone will be in the region of 3% to 4%. The bunching of debt service will be a problem to confront other administrations in future.”