Speech by State Secretary Steinlein at the 9th annual conference of the German-Nigerian energy partnership
Ladies and Gentlemen,
Thank you for your kind words, Your Excellency, and thank you once again for the generous hospitality your Government is affording us here in Nigeria. I have the honour of contributing a few closing remarks following this intense conference.
Since my other very important duty here is to accompany the German President during his current state visit to Nigeria, I was a little late in joining you. I am therefore very grateful to you, Permanent Secretary Edozien, for summing up the proceedings so well. What I have seen so far confirms my impression that our relations in the energy sector are in a remarkably intense phase.
And I am impressed by the developments that have taken place in Nigeria over the past 15 months.
Several of you remember our previous conference in Berlin in October 2014. A significant number of businessmen and businesswomen from the Nigerian energy sector travelled to Germany because they deemed it a good investment of time and money to engage with their German counterparts. Given the quantity and quality of German business leaders here today, I think it’s fair to say this conviction is mutual!
Ladies and gentlemen,
This energy dialogue is taking place against a difficult political, economic and security backdrop.
One imminent threat comes from terrorism, here notably the Boko Haram insurgency. We welcome the fact that Nigeria has decided to implement international standards to deal with this threat, including respect for human rights. Federal Chancellor Angela Merkel has offered President Buhari her full support in Nigeria’s fight against terrorism.
In a first step, we will cooperate on providing mobile medical care units and radar systems and assist with the reform of the security sector and the reduction of illegal small arms, as well as with a project supporting the reintegration of internally displaced persons.
And above all, I am confident, that Nigeria has excellent resources itself, to defy terrorism and violence.
Last year, Muslim and Christian dignitaries from Nigeria visited me in Berlin and I was impressed by their resolve to make head against terrorism and violence together. They described to me, how Christian security forces protect Muslim worshippers in the Mosques on Fridays and how Muslim security forces protect Christian worshippers in Churches on Sunday. As long as the people stand together like this, terrorism and violence will win no grounds.
However, the crises we face are not limited to the political arena. On the economic front seemingly rock-solid truths – such as the eternal rise of oil prices – are beginning to disintegrate. Prices of well below 40 US dollars a barrel were inconceivable only two years ago. Some analysts argue that this low price level is a serious impediment to a global transition to sustainable energy sources. I think it is first and foremost an opportunity!
An opportunity to get rid of subsidies in oil, coal and gas and their almost addictive effect on our societies. Allow me to commend you, Your Excellency, on the recent removal of the price subsidy on kerosene in Nigeria. And I understand that the subsidies on fuel will follow in due course. This will be a significant factor in establishing a level playing field for green energy technologies.
In Germany, we have decided to decarbonise our economy. The political framework in Germany is clear: all political parties and the people support the “Energiewende”. For over a decade the feed-in tariff has provided a stable investment framework for renewables in Germany. Now, 1/3 of our electricity derives from renewable sources!
At the same time, there is no doubt that fossil energy sources will still play a role in the short and medium term. Nigeria is eager to increase its power production in an emerging economy of more than 180 million people. And your country is endowed with vast gas reserves that are easily available for power production.
Yet, the outcome of the recent COP 21 conference in Paris, coupled with an increasing prevalence of extreme weather events all over the world, are stark reminders that climate change is real. We have to move our economies onto a low carbon path sooner rather than later. After all, African countries are among the most vulnerable to the effects of climate change. All of us need to work together to overcome the teething troubles associated with the necessary transition to this path.
We therefore want to learn from each other how to decarbonise our economies in the most efficient and cost-effective way. The German Government is organising a two-day conference, the Berlin Energy Transition Dialogue, on 17 and 18 March in Berlin. I would like to reiterate the invitation from Foreign Minister Steinmeier and would like to encourage all of you to engage with the international energy community in the discussion on the global Energiewende.
The shift towards renewables is no longer a luxury product of industrialised countries. On the contrary: due to rapid market growth the major hubs of renewable energy installations have shifted to other world regions in East Asia, South America and Africa.
Generation costs for all renewable energy sources are now at the same level as for fossil fuels – without additional external risks such as air pollution and disposal. And let us not forget that renewable energy plants do not require any kind of logistics for fuel supply. It is therefore not surprising that the global capacity in renewables has more than doubled since the beginning of the millennium.
Against this background, I am very pleased with the trustful and intense cooperation we have enjoyed with your Ministry, Your Excellency, over the past years. With the support of our colleagues from the German development agency GIZ, the Nigerian Government has developed a reliable framework for investment in renewables and in energy efficiency – and the member companies of the Nigerian German Energy Partnership have equally contributed: only last week, the very first official solar IPP licence was issued for the 125 MW Kankiya solar power plant in Katsina State, one of the flagship projects of our partnership, in which several German companies are involved. I understand the next logical step will be the finalisation of a power purchase agreement. After signature, this will serve as a blueprint for future solar plants. I am confident that this will greatly contribute to the increasing roll-out of renewables in Nigeria.
All this illustrates the great progress that we have made in our partnership. But it is certainly no reason to relax our efforts! One of the bottlenecks we continue to face is the lack of sources for financing energy projects. In an attempt to tackle this issue, the German Government has facilitated access to export financing for Africa. We have decided to introduce the “Hermes” tool – export credit guarantees – for public tenders to six sub-Saharan countries, including Nigeria. I would like to invite you all to consider this offer!
I can also assure you that we will continue to engage bilaterally on further steps to remove bottlenecks to investment and on other ways to facilitate Nigeria’s transition to a reliable, affordable and sustainable energy and electricity supply.
Ladies and gentlemen,
Over the last two years, the Nigerian Government has finalised its renewable energy and energy efficiency policies; it has developed a comprehensive finance mechanism for renewables and set up a rural electrification fund, capitalised with funds from the national budget; it has strengthened the National Power Training Institute of Nigeria and trained over 2000 Nigerians in the fields of renewable energy and energy efficiency. And these are just a few examples!
In all these areas, Nigerian policymakers have cooperated very closely with German experts and the Nigerian Energy Support Programme. Earlier I mentioned the efforts of the Nigerian Germany Energy Partnership to develop new free-field solar projects such as the Kankiya IPP. Moreover, a number of German industry stewards are pursuing a seminal waste-to-power plant project in Lagos.
In my opinion, this collaborative effort between government, development agencies and the private sector is an achievement that we should maintain and build on. A regular, working-level exchange between all stakeholders – both German and Nigerian – here in Abuja or Lagos could be a valuable addition to the higher-level annual Energy Partnership conferences.
For now, Excellency, I look forward to continuing the outstanding working relationship we have enjoyed with our Nigerian friends over the past eight years. And I am confident that our further discussions here will take us down a path on which, when we meet again in Berlin about a year from now, we will have even more milestones to celebrate than we do today.