Improving power distribution in Nigeria

Nigeria

Olubusola Oyebadejo, CEO of Powergen Engineering, talks to The Energy Year about how the company facilitates access to power in Nigeria and ways to resolve the country’s unstable power supply. Powergen Engineering is a Nigerian company specialising in the sales of diesel generators, gas generators, transformers and low-voltage electrical products.

How do you evaluate the Nigerian market’s opportunities for international investors?
The international reputation Nigeria has is negative and often inaccurate. Information in the news doesn’t always reflect the reality of the situation. People are doing quite well, and we see many companies entering the market with serious intentions of doing business.
We have a huge population and, especially in the power sector, the opportunities to fill in the gaps are substantial. A number of investors have entered the market in recent years and by finding their niche and getting to know the market, they have done well for themselves.
Over the years, we have been able to work with partners that were able to build a good reputation and show integrity. Players entering the market need to become acquainted with these companies, and once the relationships are settled, business can be conducted without any issues.

What actions can be taken in order to resolve the unstable power supply in Nigeria?
We see the government struggling to accommodate everybody in terms of power distribution; many rural areas don’t even have access to electricity. Some estates have cut themselves out of the national grid and use alternatives such as power generators and hybrid solutions, or people end up with IPPs. All of these solutions take a lot of pressure off the grid and contribute to better access to power. These are the solutions that we have been working on with real estate developers in order to deploy alternatives.
I am sceptical about the kind of progress that we can expect in Nigeria by 2030 regarding electrification targets. The government needs to put in the effort to upgrade the national grid and revamp the obsolete infrastructure we have here. It will require considerable investments and that is also why the government should create facilitating policies that will allow private investors to come into the sector and establish businesses that will help improve the situation.

How do you contribute to facilitating access to power in Nigeria?
The power sector, and, more specifically, access to electricity, has always been a problem in Nigeria. The government has been engaging continuously to resolve these challenges, but it is a lengthy process, and we don’t see major results happening in the short term.
This is the gap we have identified as Powergen, and our operations intend to provide alternative off-grid solutions to help businesses maintain stable access to electricity, whether the grid is functional or not.
We thus procure cost-effective solutions from our OEM partners, such as ABB, Schneider Electric, Cummins, Perkins and MTU, among others. Our solutions include generators, inverters and transformers which we provide to our customers and for which we are also able to provide maintenance services. We have a partnership with a company called OneWattSolar that allows us to deploy solar system power solutions as well.

What is your growth strategy?
Over time, we’ve made ourselves gradually available in hubs all over the country in order to gain exposure without spending too much. We are currently in Lagos, Abuja, Ibadan and Asaba. Covid-19 has taught us to minimise costs by working remotely and reducing office space.
We are increasing our partnerships and leveraging the synergies we have developed with people to learn and grow. In terms of market share, we currently find ourselves at around 5% and are aiming towards 10% in the coming years.
We are looking for new projects to work on and for hotels, warehouses and factories that wish to cut down their costs and install alternative power generation systems such as solar panels.
To achieve our ambitions, the challenges lie in the human resources we employ. We need the right people that share our vision and understand that globalisation will change the way we work and who we work with.

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