Contacts: Obadiah Tohomdet 234-9-314-5269 Otohomdet@worldbank.org Anita Gordon 1-202-473-1799 Agordon@worldbank.org Abuja, NIGERIA, July 14, 2006¾The people of the city of Aba, in the delta region of southern Nigeria, are not only making local history today by hosting Nigeria’s first Clean Development Mechanism (CDM)* project to reduce greenhouse gases (GHG) but they are getting development benefits as well. The 120 megawatt, Aba Clean Energy Carbon Project will construct an efficient, gas-fired power plant, which will displace the electricity and steam currently being generated by industrial and large commercial enterprises in the City of Aba. Residents and business enterprises say that the current grid is over-stretched and unreliable and many of them have their own on-site diesel generators to supply their energy needs. These generators are often inefficient and burn diesel that is expensive and releases carbon dioxide and other gases into the atmosphere. This new initiative will introduce an efficient co-generation unit that will reduce GHG emissions that are responsible for climate change—the power plant will have dual-fuel turbines that will primarily use natural gas backed-up by diesel facilities in case of gas pipeline interruption. The project is being developed by Geometric Power Limited (GPL) a Nigerian private-sector power provider. “The goal of Geometric Power Limited as the main developer and sponsor of the project is to deliver electricity to consumers with the same availability and reliability as in developed countries,” said Bart O. Nnaji, Chairman and CEO of Geometric Power Limited. “We plan to achieve this through first class engineering design of the power plant and distribution networks, and through world class management.” The benefits of the project are, in part, the result of the sale of 1.2 million tons of carbon dioxide equivalent (tCO2e) emission reductions to the Community Development Carbon Fund (CDCF), a private-public partnership of nine governments and 16 companies and organizations, managed by the World Bank. These “carbon credits” are expected to be generated by the project as it replaces the higher GHG emissions from less efficient diesel generators. The CDCF participants would expect to utilize these credits to count toward meeting their obligations to reduce emissions under various mandatory and voluntary commitments in industrialized countries. “The sale of carbon emission reductions combined with community and development benefits, is a transaction that benefits both the local communities and the global environment,” said Hafez Ghanem, World Bank Country Director for Nigeria. “This is a significant investment under Nigeria’s new power Act. We hope that the Aba project will be a prototype of how to stimulate growth and opportunities for Nigerians while protecting the local and global environment”. Aba, located northeast of Port Harcourt, is an important regional market, a road and rail hub, and a manufacturing center for cement, textiles, pharmaceuticals, processed palm oil, shoes, plastics, soap, and beer. The project will deliver a multitude of development benefits to the local community near the plant. GPL will provide electricity to the adjoining rural community that sold land to the company. It will also provide water, and equip the primary and secondary schools in the town. It will work with the Aba local governments on providing street lights. GPL will initiate the setting up of sustainable Internet Service Provider for Aba. There will also be other training/education associated with the introduction of new processes, technologies and products and/or the effects of a project on other industries. In addition the company will construct a clinic that can carry out basic tests and have out patient facilities and fund a doctor and nurse. The company will also build a nursery and primary school with at least eight classrooms for up to 200 students, with the head and a science teacher funded by GPL. The International Finance Corporation (IFC), the private sector arm of the World Bank Group, along with a wide range of other institutions including the European Investment Bank (EIB), and Emerging Africa Infrastructure Fund are potential investors in the project. The IFC which has been involved with Geometric Power Limited from its inception, providing grants to fund feasibility studies, is considering an investment of up to US30 million. “The Aba Clean Energy Carbon Project is a good example of how the World Bank Group proactively supports project development in key sectors such as infrastructure, and seeks to broaden support of local and national enterprises. The GPL project is indicative of the socially responsible partnerships we seek to support”, said Solomon Adegbie-Quaynor, the IFC's Country Manager for Nigeria. “The carbon agreement makes it more likely for this clean energy project to be financed and to ultimately benefit the people of Nigeria.” The Aba independent power project is a significant privately financed power project under Nigeria’s new Electric Power Reform Act. The electricity system has been plagued with capacity shortages, poor service, frequent black-outs and significant voltage fluctuations (often damaging equipment in businesses and industries). “The Aba project is important for Nigeria and it demonstrates how the Clean Development Mechanism can promote projects being developed by Independent Power Producers (IPPs) such as Geometric Power”, said Dr. Collins Gardner, Chief Executive of the Presidential Implementation Committee for the Clean Development Mechanism (PIC-CDM). The PIC-CDM is functioning as the Designated National Authority (DNA) for Nigeria and formally approves proposed CDM projects. By providing reliable electric supply to this cluster and its industrial customers, the Aba project would make industrial production cheaper, with related benefits to the Nigerian economy. Residential customers would also benefit from the project as reliable power supply would make day-to-day life easier for local residents.
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