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Business News

AfDB invests $600 million in Africa’s renewable energy, discloses de-risk plan 

About $600 million has been invested by the African Development Bank (AfDB) in Africa for the development of renewable energy in the continent.

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AfDB partners DFID to unveil $80m infrastructure financing for Africa, ADB launches $3 billion “Fight COVID-19” Social Bond, US calls for an independent probe of AfDB president, Akinwumi Adesina, AfDB board denies asking Adesina to step down as Obasanjo says the bank risks being hijacked

African Development Bank (AfDB) has invested $600 million for the development of renewable energy in Africa. The President of AfDB, Akinwumi Adesina, disclosed during his keynote speech at the UK-Africa Investment Summit.

The investment into the renewable energy market had been encouraged by the opportunities, which Adesina says are available in Sub-Saharan Africa.

AfDB invests $600 million in Africa’s renewable energy, discloses de-risk plan 

“Huge opportunities exist for investment in renewable energy, especially for hydropower, wind, solar, thermal and geothermal.

“But many of these opportunities can’t be realised unless we invest a lot more in project preparation to make the projects bankable. The African Development Bank through its NEPAD infrastructure project preparation facility has helped to mobilise financing for $8.5bn of infrastructure projects.”

Supporting largest power project: AfDB also played a vital role in the construction of the largest wind power generation project in Africa, which is located in Kenya. It is expected to produce 300 megawatts of electricity.

[READ MORE: Nigeria, others secure AfDB’s $20m to improve renewable energy)

“The African Development Bank’s €20m Partial Risk Guarantee essentially backstopped the government of Kenya’s obligations to developers against delays in the construction of transmission lines,” Adesina said.

How AfDB avoids market risk: According to Adesina, the bank has been able to transfer risks on its private sector portfolio assets to the private sector by initiating a $1 billion synthetic securitisation.

AfDB invests $600 million in Africa’s renewable energy, discloses de-risk plan 

“We are currently exploring with the DFID on the use of synthetic securitisation for the sovereign portfolio of the African Development Bank.

“This will be used to transfer sovereign risk to the market, working with insurers and reinsurers in the United Kingdom. This could be a huge game-changer for how governments can transfer their sovereign risks on infrastructure to the market.

“Because the bulk of infrastructure is financed through foreign loans, and the revenue streams are in local currency, it introduces high financial and forex risks to investors.

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“Using swaps and hedging are effective, no doubt, but more can be achieved by focusing on local currency financing. This will also help with debt sustainability as the bulk of Africa’s external debt is on infrastructure.”

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Nairametrics reported recently that AfDB had partnered with the United Kingdom’s development agency, DFID, to unveil its $80 million infrastructure financing initiative for Africa.

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Olalekan is a certified media practitioner from the Nigerian Institute of Journalism (NIJ). In the era of media convergence, Olalekan is a valuable asset, with ability to curate and broadcast news. His zeal to write was developed out of passion to shape people’s thought and opinion; serving as a guideline for their daily lives. Contact for tips: [email protected]

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Macro-Economic News

Transport fare watch: Motorcycle “Okada” commuters paid less in January 2021

Commuters on motorcycle per drop (Okada) paid less in January 2021 than they did in December 2020.

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Transport fare for motorcycle "Okada" more than doubled in 2020, Lagos State bans Gokada, ORide, MaxNG, others from 15 local governments 

The average fare paid by commuters for journey by motorcycle per drop decreased by 11.60% month-on-month and increased by 95.22% year-on-year to N259.33 in January 2021 from N293.36 in December 2020, according to the National Bureau of Statistics (NBS) report for the month of January 2021.

According to the report, commuters in  Taraba (N400.80), Yobe (N400.15) and Rivers (N400.00) paid the highest journey fare by motorcycle per drop while commuters in Adamawa (N84.22), Katsina (N134.90) and Kebbi (N152.05) paid the lowest journey fare by motorcycle per drop.

Other key highlights

  • The average fare paid by commuters for bus journey intercity decreased by 0.25% month-on-month and increased by 39.55% year-on-year to N2,346.41 in January 2021 from N2,352.19 in December 2020.
  • Commuters in Abuja FCT (N4,482.24), Lagos (N3,300.23) and Sokoto (N3,300.00) paid the highest bus journey fare intercity while commuters in Bayelsa (N1,600.45), Bauchi (N1,640.20) and Enugu (N1,687.45) paid the lowest bus journey fare within city.
  • The average fare paid by commuters for bus journey within the city decreased by 0.66% month-on-month and increased by 74.75% year-on-year to N352.15 in January 2021 from N354.49 in December 2020.
  • Commuters in Zamfara (N600.00), Bauchi (N522.75) and Ekiti (N458.77) paid the highest bus journey fare within city while commuters in Oyo (N189.46), Abia (N205.22) and Borno (N240.79) paid the lowest bus journey fare within city.
  • The average fare paid by air passengers for specified routes single journey increased by 0.02% month-on-month and by 18.27% year-on-year to N36,463.65 in January 2021 from N36,454.59 in December 2020.
  • Passengers in Anambra (N38,600.00), Cross River/Jigawa/Lagos (N38,500.00), Bauchi (N38,400.00) paid the highest airfare while States with lowest airfare were Akwa Ibom (N32,450.00), Sokoto (N33,700.00), and Gombe (N35,000.00).
  • The average fare paid by passengers for water way passenger transport increased by 3.68% month-on-month and by 38.58% year-on-year to N786.19 in January 2021 from N758.27 in December 2020.
  • Passengers in Rivers (N2,280.00), Delta (N2,250.45) and Bayelsa (N2,200.10) paid the highest fare by water while states with lowest fare by waterway passenger transport were Borno (N245.10), Gombe (N290.77) and Kebbi (N340.00).

Why this matters

Transportation cost takes a huge portion of budget for most lower/middle-class Nigerians and as well takes not less than 20% of their take-home pay packages.

The drop in fares paid by the commuters on motorcycle per drop (Okada) is a welcome development.

Transport by motorcycle (Okada) has been popularly adopted in most cities by businessmen, government workers, and students to overcome traffic congestion, and for the advantage that it can navigate roads that are inaccessible to automobiles and buses, particularly in villages and urban slums.

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Companies

Arvind Pathak, Deputy GMD of Dangote Cement resigns

The Deputy Group Managing Director of Dangote Cement has resigned his role on the Board of the company.

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Arvind Pathak, Deputy GMD of Dangote Cement resigns

Dangote Cement Plc has announced the resignation of its Deputy Group Managing Director, Arvind Pathak.

In line with the disclosure issued by the company, the Board of Directors of Dangote Cement after accepting Pathak’s request disclosed that his resignation will take effect from the 25th of February 2021.

The Board of Dangote Cement appreciates him for his commitment and contributions to the Board, and also wishes him well in his future endeavours.

What you should know

  • Pathak was appointed to the Board of Dangote Cement Plc on October 29, 2019, as Deputy Group Managing Director.
  • Prior to his appointment as Deputy GMD, he was the Chief Operating Officer of Dangote Cement, a position he held between 2018 and 2019.
  • Prior to joining DCP, he has worked in various leadership roles in the cement industry, he has 30 years of experience in the cement industry.

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