Nigeria wants to invest USD50 billion in biofuel

biofuel

Nigeria is working on a policy that would set aside USD50 billion to fund and stimulate investment in production of biofuel.

The plan is in bid to diversify the economy and reduce its reliance on fossil fuels.According to the government, the project will not only be sponsored by the federal government but by parastatals of development banks, including the Bank of Industry, Bank of Agriculture and Development Bank of Nigeria.

A biofuel is a fuel that is produced through contemporary biological processes, such as agriculture and anaerobic digestion, rather than a fuel produced by geological processes such as those involved in the formation of fossil fuels, such as coal and petroleum, from prehistoric biological matter.

It has been discovered that fits derivable from domestic production of biofuels, ranging from the expected increase in agricultural activities, which would in turn translate to enormous job creation, thereby, contributing to the growth of the country’s Gross Domestic production, GDP.

Petrol BIEF was proposed to stimulate investment in the bio-fuel industry, with a proposal that its investment shall be up to a minimum of five per cent and a maximum of 10 per cent in bio-fuel related projects. He said:  “As part of incentives, the draft Nigerian Bio-Fuel Policy and Incentives document, provides for grant of pioneer status, tax holidays to private sector entities involved in any activity related to the production of crops for biofuels production. “They are also exempted from other taxes, such as withholding and capital gains tax.

Other incentives include exemption from payment of import duties for the first five years, subject to review; exemptions from import duties, taxes, all other taxes and charges relating to plants, machinery, growers, chemicals, fertilizers, pesticides and materials for use in biofuels production.” Speaking in the same vein, Acting Executive Secretary of the PPPRA, Mr. Victor Shidok, said the agency was aware of the immense socio-economic benefits derivable from domestic production of biofuels, ranging from the expected increase in agricultural activities, which would in turn translate to enormous job creation, thereby, contributing to the growth of the country’s Gross Domestic production, GDP.

Also speaking, an energy expert and keynote speaker at the event, Mr. Mohammed Ibrahim, lamented that the cavalier attitude of regulatory agencies in Nigeria was playing a major role in the de-industrialisation of the country, while he warned that if care is not taken, Nigeria would soon start importing biofuels from Niger Republic. On his part, Minister of State for Petroleum Resources, Mr. Ibe Kachikwu, called for greater urgency in diversifying the economy and reducing dependence on fossil fuel and imported petroleum products, especially following the dwindling price of crude oil and vandalisation in the Niger Delta.

Kachikwu, who was represented by Mr. Tim Okon, Special Adviser on Fiscal Strategy to the Minister of State for Petroleum Resources, expressed optimism that biofuels would soon become a major foreign exchange earner for the country, if we apply our mind and might into it. He said, “We can produce crude and fire gas, but ultimately, the only way to sustainably reach every nook and cranny and every citizen of our country with some level of energy supply, is to look towards natural resources, such as solar, wind, water resources and biofuel.”

He explained that the Renewable Energy Development Initiative was designed to leverage on the country’s immense agricultural potentials, in order to create a synergy with the petroleum sector, by developing a biomass-based fuel economy for Nigeria. Kachikwu argued that biofuels is bound to enable the country develop a low carbon economy and gradually reduce environmental pollution associated with fossil fuels.

He added that biofuels would also help create a commercially viable and sustainable agro-industrial cluster across the country, noting that it would equally provide the enabling environment for biomass co-generation of electric power. He urged vehicle owners and generators operators to explore the possible utilization of E-10 Bioethanol, B-20 Biodiesel which are the two specifications of biofuels currently endorsed by the stakeholders. “Industrialised countries like USA, Brazil and other countries across Europe have been producing and utilizing biofuels. I believe we should look in that direction, knowing that the biofuels industry has huge investment potentials likely to create opportunity for large, medium and small scale investors,” Kachikwu explained.