Experts Stress Bankability for Nigeria's Energy Projects

Energy experts assert that Nigeria's future energy investments hinge on the bankability of projects rather than mere capital availability. Dr Lekan Aluko, CEO of Petrovision, cited the Dangote Refinery as a successful example of privately financed large-scale energy infrastructure in Nigeria, which operates without sovereign guarantees due to its robust project structure.

The refinery, with a capacity of 650,000 barrels per day, was developed alongside essential infrastructure like a port and power plant, addressing potential constraints. Aluko noted that the challenges differ for Nigeria's existing refineries in Port Harcourt, Warri, and Kaduna, which have uncertain technical and commercial liabilities.

Investors require clarity on the condition of these facilities and the costs associated with rehabilitation versus new construction. He warned against applying the Dangote financing model to state-owned refineries without considering their unique challenges.

The emergence of proposals like the African Refinery Port Harcourt Limited (ARPHL) highlights the need for a commercial assessment of whether to rehabilitate or build new refineries.