Tag: power sector

  • Power sector will boom, says Minister

    Power sector will boom, says Minister

    The  Minister of State for Power, Hajiya Zainab Ibrahim Kuchi  yesterday urged prospective investors to take advantage of the impending boom in the nation’s power sector.

    Hajiya Kuchi, who spoke while receiving a delegation from Bharat Heavy Electricals Limited, led by the Secretary to the Government of India’s Department of Heavy Industry, Dr. Sunatu Behuria, said there are opportunities in all the three chains of electricity in Nigeria, such as the renewable like small hydros, solar, wind, waste to fuel and coal to power.

    In a statement, the Deputy Director, Press, Timothy Oyedeji quoted the Minister of assuring the would-be investors of bumper returns on their investment, saying Nigeria is known for high returns on investment. The electricity market will not be an exemption, as what Nigerians want is adequate and uninterrupted power supply, she added. She urged the group to cash-in on the conducive environment created by the government and invest as Independent Power Producers.

    She said there are vast opportunities available for the production of small megawatts of electricity in short term outside the national grid system. She reiterated the commitment of President Goodluck Jonathan to the realisation of the lofty ideas contained in the power sector Road Map.

    Regarding the proposal on capacity building, Hajiya Kuchi, said that government would be interested in signing a long term agreement with the company, adding that such a move would be mutually beneficial to the parties.

    Earlier Dr. Behuria, said the Indian firm is ready to invest in the Nigerian Power Sector, especially in the areas of hydro power (small and medium) and other renewables, saying the company has a record of being the highest producer of electricity in India with business interests in Asia and Africa.

  • Skye Bank to inject $150m into power sector

    Skye Bank to inject $150m into power sector

    Skye Bank on Monday said that it had concluded arrangements to inject about $150 million (N24 billion) in the power sector in 2013.

    Its Group Managing Director, Mr. Kehinde Durosinmi-Etti, disclosed this at the bank’s pre-Annual General Meeting media briefing in Lagos.

    Durosinmi-Etti said the bank would invest between $100 million to $150 million in the power sector, while 17 per cent of its loan portfolio would be invested in the upstream sector.

    He also said the bank was planning to raise N50 billion tier one capital for long-term investment purpose.

    The group managing director, according to the News Agency of Nigeria said the bank had commenced upgrading of its hardware and software which would be concluded in 2013 to ensure efficient service delivery to all its customers.

    He said the bank would open 12 new branches and 12 new cash centres across the country to improve its operational efficiency.

    The group managing director also said the bank had divested from all its non-bank subsidiaries in line with the directive of the Central Bank of Nigeria (CBN).

    Speaking on the bank’s performance for the 2012 financial year, he said that gross earnings grew by 25 per cent to N127.78 billion from N102.48 billion recorded in 2011.

    According to him, the bank’s profit before tax rose by 481 per cent to N16.52 billion from N2.84 billion recorded in 2011.

     

  • Power sector gas debt reduces to N20b

    Power sector gas debt reduces to N20b

    PHCN: Govt to ensure adherence to labour law

    The power sector’s gas debt has reduced from its estimated  N30 billion in 2012 to about N20 billion, the Minister of Power, Prof  Chinedu Nebo has said.

    Speaking at the Nigeria Economic  Summit Group forum in Abuja, yesterday, Nebo explained that “as at the second half of last year, the debt was about N30 billion and now it has been reduced to just above N20 billion.”

    He said the “market operator commenced the payment of 100 per cent of NGC (Nigerian Gas Company) invoice in August 2012, and we expect the trend to continue. In other words, we know about this debt and we are working to ensure the right things are done.”

    Meanwhile, the Minister of Petroleum Resources, Mrs. Diezani Alison -Madueke, said the Federal Government will bridge the gas to power demand gap by 2015.

    Mrs. Alison -Madueke, who was represented by the Group Executive Director (GED), Gas and Power of the Nigerian National Petroleum Corporation (NNPC), Dr. David Ige, said it was estimated that by year end, gas demand by National Integrated Power Projects ( NIPP) will soar by an estimated 340mmcf/day coming notably from Geregu and Ihovor.

    Her words:  “Several efforts are being taken to enssure gas supply grows in line with this demand. In the short term to end 2013, about 130 mmcf/d is expected in the west. However, between 2014/2015 almost 1000mmcf/d is forecast to be added. This will bridge the gap in demand by NIPP.

    “In the East, the short term objective will be to utilize already available gas for which either delays in completion of the power plants, or other infrastructural projects prevent gas usage. These are expected to be addressed through 2014/2015, thereby bridging shortfalls in the East. In essence, with our current supply plans, there is confidence that NIPP demand can be met by 2015.”

    She said the pipelines to Geregu, Olorunshogo, Alaoji and Omotosho have all been completed and providing permanent supply arteries to the plants enough to meet “both current and future demand requirements.”

    Mrs. Alison-Madueke noted that given the scale of the ongoing infrastructure projects, the sector is vulnerable to the usual challenges of project slippages and contractor related issues, adding that these were being addressed to ensure minimal impact on the supply agenda.

    She said that a key dis-incentive to supply growth is the payment performance of the power sector,  adding that for 2013, the overriding  issue is less about gas supply sufficiency, but more about dealing with electricity transmission problems.

    Meanwhile, the Minister of Power, Prof Chinedu Nebo yesterday said in the emerging new scheme of things, the Federal  Government will ensure that private sector operators adhere strictly to the nation’s labour laws, and treat Nigerian electricity workers with the dignity they deserve.

    He stated that  the nation’s electricity workers are a most valuable asset, whose experience and competencies are indispensable, even in the new dispensation of privatisation.

  • Power sector reform to boost Nigeria’s growth, says IMF

    Power sector reform to boost Nigeria’s growth, says IMF

    Implementation of the power sector reform and rebound from floods would boost Nigeria’s growth this year, the International Monetary Fund (IMF) has said.

    The Fund, which said this in the latest edition of its World Economic Outlook (WEO), also projected a Gross Domestic Product (GDP) growth of 6.7 per cent and 6.9 per cent for the country in 2013 and 2014.

    Nigeria’s GDP is projected to be seven per cent this year. The country had recorded a GDP growth of 10.3 per cent, 10.6 per cent, 5.4 per cent, 6.2 per cent, 7 per cent, six per cent, 7 per cent, 7.4 per cent, 7.4 per cent and 6.5 per cent in 2003, 2004, 2005, 2006, 2007, 2008, 2009, 2010, 2011 and 2012.

    Historically, from 2005 until 2012, Nigeria’s GDP growth rate averaged 6.8 per cent reaching an all-time high of 8.6 per cent in December of 2010 and a record low of 4.5 per cent in March of 2009. The GDP growth rate provides an aggregated measure of changes in value of the goods and services produced by an economy.

    About $2.23 billion revenue is expected by the Federal Government from the sale of the 15 Power Holding Company of Nigeria (PHCN) assets. The funds are expected to be pumped into major infrastructure in the country, including the power sector. Once the power issue is resolved, more economic activities will spring up and this will translate to an increase in the county’s GDP.

    Meanwhile, the Fund also forecast a GDP growth of 5.5 per cent and six per cent for sub-Saharan Africa (SSA) in 2013 and 2014. Specifically, it expects SSA to continue growing at a strong pace during 2013–14, with both resource-rich and lower-income economies benefiting from robust domestic demand.

    The IMF, however, noted: “The external environment is the main source of risks to growth, particularly for middle income and mineral-exporting economies. Given the still-uncertain global environment, countries whose policy buffers are thin and where growth is strong should seek to rebuild fiscal positions without undermining productive investment.

    “Driven largely by domestic momentum in private consumption and investment, as well as exports, sub-

    Saharan Africa experienced robust growth in 2012, continuing a long trend of expansion only briefly interrupted in 2009. At 4¾ per cent, regional GDP growth was slightly lower than forecast in the

    “October 2012 WEO, reflecting mainly the impact of floods on oil and non-oil output in Nigeria and labour stoppages in South Africa.”

    Besides, it observed that headline growth in SSA in 2012 was visibly affected by the interruption of oil exports from South Sudan. The Fund added: “Activity in Mali and Guinea-Bissau was adversely affected by civil conflict; in Mali, 400,000 people have been displaced, half of whom fled to neighbouring countries. On the positive side, Angolanoil production strengthened, and Côte d’Ivoire experienced a sharp rebound in economic activity after the election-related disruptions of 2011.

    “Growth is projected to reach 5½ per cent in 2013, only marginally lower than forecast in the October2012 WEO. The generally strong performance is based on a significant extent on ongoing investment in infrastructure and productive capacity, continuing robust consumption, and the activation of new capacity in extractive sectors.

    The IMF noted that inflation in the region moderated from 10 per cent at the end of 2011 to less than eight per cent at the end of 2012, a trend expected to continue, absent new fuel and food price shocks. It said: ”The improvement in 2012 was particularly marked in eastern Africa, owing to monetary policy tightening and lower food prices associated with a recovery in local food production.

     

    “Some temporary headwinds to these trends have been observed in countries reforming energy subsidies, where the price level has shown one-time increases (Nigeria), and in Malawi, which has experienced some pass-through from depreciation. In sub-Saharan Africa as a whole, inflation is projected to fall further to 7 percent in 2013.”

    Noting that global economic prospects have improved again but the road to recovery in the

    advanced economies will remain bumpy, the IMF said world output growth is forecast to reach

    3¼ per cent in 2013 and 4 per cent in 2014. “In advanced economies, activity is expected to gradually

    accelerate, starting in the second half of 2013. Private demand appears increasingly robust in the United

    States but still very sluggish in the euro area. In emerging market and developing economies, activity has already picked up steam,” it added.

     

  • Revolution in power sector underway – Minister

    The Minister of Power, Prof. Chinedu Nebo, has assured that Nigerians would soon experience unprecedented revolution in the power sector.

    He also challenged the private sector to take advantage of the unfolding development in the industry by investing and taking position in the on-going privatization efforts of government.

    Speaking on Wednesday in his Abuja, when he received a trade delegation from United States of America led by Mimi Alemayehou, Vice President of Overseas Private Investment Corporation (OPIC), the minister assured the delegation of “incredible opportunities for investment in power as contained in the Transformation Agenda of the administration.

    He stressed that appropriate enabling environment would be provided for all genuine investors.”

    The Deputy Director/Head of Press, Timothy Oyedeji , revealed these in a statement on Wednesday.

    Drawing from the growth experienced in the telecommunication sector, Prof. Nebo said that it took time for Nigerians to realize the enormous opportunities in telecommunications “which at inception in 1999 has less than one million GSM lines, but today boasts of over 100 million GSM lines.”

    According to him, this development can only be said to be “astronomical, unbelievable but real.”

    Prof. Nebo said it is therefore imperative for the private sector to consider investments not only in power generation but also in transmission, renewable and solar energy.

     

     

  • How to tackle power sector challenges

    Apart from diversification of sources of power generation, the dearth of skilled manpower and use of technology are areas that should be given serious attention if the problems of the power sector should get sustainable solution, it was learnt.

    The Special Adviser to Bayelsa State Governor on Power, Olice Dickson Kemenanabo, who was the guest lecturer at the 12th Distinguished Electrical and Electronics Engineer Annual Lecture in Yenogoa, Bayelsa State, highlighted ways to surmount the problems in the power sector.

    In his paper entitled: Surmounting the obstacles to the development of a sustainable power system in Nigeria: the Techno-economic approach, he said renewable sources of energy in the country are grossly underutilised.

    He noted the importance of exploring alternative sources of power generation as against the undue dependence on conventional sources such as fossil fuels for thermal power stations. He said that long before we learnt how to manipulate and control ambient energy otherwise known as alternative energy, other countries had established ways to intervene in the use of the natural energies of the sun, moving air and water to deliver the basic comforts of life.

    He said: “Technologies such as sails, windmills and watermills are a few energy sources that were developed early for specific human purposes. Ambient energy, especially from the sun, is all over yet, has not been maximally developed to meet the demands of modern comfort. The obvious implication is that with the right physical infrastructure, solar energy may well suffice, with no resort to conventional energy.

    “Ironically, the world’s total electricity production for the year 2008 was 20,261TWh, which represents only 11 per cent of the energy received from the sun in an hour (174,000TWh); yet, solar energy contributed only about one per cent of this total in the following ratio 0.06 per cent for solar photovoltaic and 0.04 per cent for solar thermal. The extent of inconsistency between the amount of energy from the sun and that which is utilised further leaves a lot of questions unanswered. It calls for concerted global political and technical will in revolutionising research and development in solar power utilisation.

    “The other forms of ambient energy were 18 per cent, of which 92 per cent is from hydro, six per cent from wind and about two per cent from geothermal. Indeed Hydro remains one renewable energy source that has proven to be sustainable even in Nigeria. The Kainji, Shiroro and Jebba Hydro power plants are clear testimonies of the hydro-electricity success in Nigeria. However, it is instructive to note that, as long as the world has built and accumulated physical infrastructure whose performance with solar energy seems to be wilfully poor, conventional energy shall continue to be indispensable.”

    Conventional energy, he explained, is usable energy in a form that can be stockpiled, transported and released in a controllable fashion when and where it is needed. The first power plants ran on both conventional and ambient energy sources, and up till date on coal, natural gas, petroleum and nuclear. Fossil fuels account for 67 percent of the world’s conventional electricity generation sources, while 13 per cent is from nuclear power. Interestingly, Nigeria has huge untouched fossil fuel resources with potentials that are capable of exporting electricity to the entire sub-Saharan Africa. Yet, the nation has continued to struggle with a number of obstacles that prevented the realisation of these important opportunities to the fullest extent. It is therefore ironical to hear the untenable story of lack of gas or any other feedstock for that matter has been the issue. Perhaps a little bit of statistics will debunk that perspective, he added.

    He noted that flared gas from Nigeria is capable of producing 200 trillion hour (TW-Hr) of electricity that can meet power generation of the entire continent and more than twice that of Sub-Saharan Africa, excluding South Africa. Painfully, it is simply wasted. He called for more utilisation of gas for power and other domestics operations and for export.

    On post-privatisation power sector, he said: “In the present era, and going forward, the major challenge that may confront the energy sector is the technical management of the new regime emerging in consequence of the privatisation of the assets owned by the defunct Power Holding Company of Nigeria (PHCN) monopoly. In meeting these challenges there are several factors that must not be overlooked. Primary among these are the question whether there will be adequate local expertise.

    “In spite of what mishaps, misjudgements, bashing, blackmails and setbacks they have suffered individually, collectively or institutionally, one thing I know for sure is that the vacuum created by the exiting PHCN staff will not be easy to fill. Most of the questions they are asked sincerely are not supposed to be answered by them. There are obvious consequences that may arise in our march to infrastructural development with the exit of a workforce that though seems not to measure up with global best practices but, until the right values and competences are imbibed, will remain our best available technical corps in the power sector.

    He also urged electrical and electronics engineers to play professional politics to be part of policy-making. “When we contemplate the high profile occupants of sensitive engineering biased ministries, parastatals, and agencies, it seems that engineers in general have not played their political cards right. This appears to be particularly noticeable on the part of electrical engineering biased agencies. Given the importance of the electricity sector to the overall development and progress of our nation, we need to proactively integrate our professionalism with the political structures to enhance decision-making so that policies and plans for the sustainable growth of the sector will be initiated and guided accordingly,” he said.

    The Chairman, Nigerian Institution of Electrical and Electronics Engineers (NIEEE), Adekunle Sunday Makinde, in address, said: “Engineering, by virtue of its commitment to the wellbeing of the society, places a huge responsibility on engineers to ensure that the interest of the society is upheld in the execution of their projects.

    “In particular, electrical engineering, with its life-threatening dangers associated with it, carry serious risks for the safety and well being of electrical engineers in the practice of their profession. On daily basis, our professional colleagues place their lives on the line to deliver power, telecommunications and other utilities and services to users across the country. “

    He added that the Distinguished Electrical and Electronics Engineer Annual Lecture (DEEEAL) series dates back to the year 2000, when the first lecture was delivered.

    The President, Society of Engineers, Mustafa Balarabe Shehu, in his address, urged engineers to be professional to contribute meaningfully to national development.

    He said: “As change agents, professional engineers must undergo several years of formal and informal training. In addition to the rigorous training successful engineers must imbibe certain character traits in order to excel. At the state and local government levels where governance is closest to the people Nigerian engineers have displayed exemplary conduct and served beyond the call of duty in their quest to deliver the dividends of democracy to every nook and corner of the country.”

  • N1.89tr investments require for power sector – FG

    N1.89tr investments require for power sector – FG

    The Head of Service of the Federation, Alhaji Isa Bello Sali, on Monday said about N1.89 trillion worth of investments would be required to completely revamp the power sector.

    Sali spoke at the launch of the National Power Training Institute graduate skill development programmein Abuja

    According to him, the fund is expected to cover investments in four major areas of power- generation, transmission, distribution and alternative energy.

    He added that the expenditure aims at increasing generation, transmission and distribution capacity, in order to provide adequate and sustainable power for industrial growth and national development; intensifying rural electrification efforts in a more efficient manner and achieving optimal mix using the most appropriate technology.

    To achieve these objectives, the HOS said the Federal Government would create a deregulated and competitive electric power sector to attract foreign and local investments.

    He noted that with these objectives, only the best would be attracted to work in the sector.

    Sali submitted that the possession of practical skills and proven track record would be the requisite qualification for those expected to operate in the rejuvenated power sector.

     

  • Nnaji and the power sector jinx

    For watchers of the developments in the troubled power sector, something akin to a disaster befell the nation with the ouster of Professor Barth Nnaji as power minister Wednesday August 28. For a sector that has just begun to witness some modest improvements in service delivery across the board, it was a perhaps a case of the Nigerian gnome knowing when to strike for maximum effect. That it consumed the individual who in the last months – by the estimation of the generality of citizens – gave so much and added so much value to the hitherto moribund sector is perhaps best explained by the Nigerian jinx.

    I describe Nnaji exit as unfortunate essentially because the affair is foreseeable. For a sector being primed for the most comprehensive overhaul in its history, it was perhaps expected that the entrenched forces of the ancien regime would not let go without a fight. In this, the government seems to have supplied the catalyst when it failed to anticipate the problem. Although it seems now convenient for the same government to play the Pontius Pilate, its feigning of innocence is to put it mildly, hypocritical. That the issue of conflict of interest which provided the ammo for Nnaji’s ouster did not come up earlier is only because there was no basis for conflict at the earlier stages. The matter only became hot button when the reform ship began to coast to the final, home stretch – the sale of the entities. This is where the stakes are at utmost and the government ought to have known better by ensuring that the chief midwife, like Caesar’s wife, stays above board!

    Blind Trust or not, the ex-minister’s interest in Geometric Power is certainly not hidden. This was after all where he was yanked off to become Special Adviser to the President and later Minister of Power. I personally thought that the ex-minister’s job was just about done at the point of the production of the milestone Power Sector Roadmap in August 2010. Solely on account of his interests in the sector, and given the potential landmines in the path of the privatisation process and the powerful interests at play, I believe that he ought to have been excused before the privatisation process kicked off at least to confer credibility on the exercise. That the minister and his boss, President Jonathan waited for things to get out of hand is no doubt revealing of the administration’s sloppiness.

    I must say however that Nnaji’s exit merely confirms that the gnome behind the power sector’s woes is alive and well. Today, the fear that the modest success would be imperilled by the changes is back. As one would imagine, the wild celebration by the electrical sector unions in the aftermath of the minister’s exit would merely represent the more comical dimension of the forces ranged against the reforms. But theirs is nothing compared to the dark forces that are far more powerful and sinister. These forces have the money, the muscle and the connection at the highest levels of government to guarantee that no initiatives work!
    That is to say that the fear of the sector’s relapse is not entirely unfounded. After all, the mere existence of the Electric Power Sector Reform Act 2005 – a legislation whose coming marked the turning point for the industry – could not guarantee that the reforms would move from the pages of the papers on which the law was written. Indeed, the late President Umaru Yar’Adua not only dithered in implementation – a clear violation of the Act – for nearly two years, he acted as if the law did not exist. Even his pledge to declare emergency in the power sector remained until his death – a wish.

    The lesson here is that it is one thing to have a fanciful piece of legislation; it is another to commit to its implementation.
    President Jonathan is no doubt entitled to his achievement which is modest by all standards given the resources that his administration has thrown into the sector. Of course, cash was never a problem. The administration after all began by warehousing $5 billion for the National Integrated Power Projects. That was after it secured the agreement of governors and their state assemblies to draw from the excess crude account. In spite of this, performance could hardly be said to have matched expectations. Note for instance the rather curious and confounding arithmetic of the power generation in which a country that did not start from Ground Zero currently celebrates 4000 MW as achievement. How about this for the record – that we blew nearly $20 million on the sector in the last decade alone to achieve an incremental 1,500 MW additional output! How does one explain the power sector’s arithmetic of reducing balances?

    The question is apt, considered in the background of the administration’s projections in the celebrated roadmap. By the projection, the sector ought to have delivered 7033MW by April 2011. By December this year, the generation capacity is supposed to hit 11,879 MW. Now, we are told by the Nigerian Electricity Regulatory Commission that the best the nation could hope for in 2012 – barely three months away – is 5,000MW! Meanwhile, the administration is in frenzy over achievements!

    Having said that, I personally believe that current fears about the reforms slipping into relapse mode are somewhat exaggerated. Clearly, much work has gone into grounding the institutional framework. There are also undeniable signs that progress is finally being made in the completion of the NIPP plants. Much also has been done to harmonise gas policies to ensure delivery of gas to the plants. However, it seems to me that the sustained interest of the ordinary Nigerian in the sector is what will make the possibility of a slip into the dark days very difficult. To be sure, the nation didn’t get to this point because those in charge suddenly became more committed. It did because Nigerians have gone beyond asking hard questions to demanding explanations on why in spite of the trillions of naira sunk, the government cannot deliver. One can only hope that President Jonathan and his Peoples Democratic Party read the signs of the times correctly.

    It is of course a long way ahead. The word however is vigilance – eternal vigilance. The next battle is the sale of the unbundled entities of the Power Holdings Company of Nigeria – perhaps the most critical in the entire process. Just as Nigerians cannot wait to see this phase happen, it must be seen as the beginning of the long, difficult road to improved service delivery – a step towards the so-called Eldorado of liberalised power sector.