The market exists, and it is a very large market. Return on investments is really attractive, nothing like what you will find in many countries.

Babatunde FASHOLA Minister of Power, Works and Housing

in figures

Zungeru plant capacity:700 MW

Year Azura power plant construction to be completed:2018

Plan for power

July 11, 2016

TOGY talks to Babatunde Fashola, Nigeria's minister of power, works and housing, about the ministry’s strategy for increasing the country’s power generation capacity and access to electricity. The minister also discusses the government’s moves to improve the business environment in Nigeria and attract investors.

Could you shed any light on the long-term plan for the power sector?
The short-term plan is incremental power, the medium is stable power and the long-term plan is uninterrupted power. There are very different components and a mixture of activities in all of these phases.

 

How are you engaging with all the companies working in the power sector?
We are engaging with all service providers in terms of energy generation and production. Getting the Aba power plant out of the courts is part of a strategy for incremental power. If it is in court and they are fighting, we will not finish the plant and we will not get electricity. We solved court dispute over the Zungeru 700-MW plant. Activity is back on at the construction site and we expect by Q4 2018, it should come on stream as part of our incremental power strategy.
We have approved the Azura power plant, which was delayed in processing for a little more than one year. The president gave approval immediately after he came to office and construction then started. That should be done by  2018 as well.
The solar power plants are all part of the incremental power strategy. We are also, by direct action, completing some of our ongoing power plants. The 225-MW Gbarain power plant in Bayelsa is now finished, being tested and synchronised to the grid. We intend to finish the Kaduna power plant, which is 215 MW and the Kasimbilla power plant, which is 40 MW, this year. The Gurara Phase I 30-MW power plant has been completed. We are finishing the transmissions side of it this year.
The Katsina wind energy 10-MW plant has had some problems; they are doing inspections now for the final components. That is part of our incremental power strategy. Simultaneously, we are expanding our transmission capacity, because it is one thing to generate the power and another thing to wield the power. We are improving the transmission network simultaneously as we speak. All of these are consistent with our incremental power strategy.
We are also integrating our energy mix policy to guide investors in a more structured way so that access to fewer energy sources – solar, wind, coal and gas – is much more predictable and pre-defined. Planning, evacuation and transmission is more consistent. That is where we move from incremental power to steady power.
Part of the plan for steady power is hopefully to benefit from next generation census to get much more reliable data about how many people really need energy, how many do not have energy, how many have energy and the per capita energy demand as the basis to produce enough and also some excess capacity. That is when you can begin to talk about steady power.

How you are collaborating with Minister of State for Petroleum Resources Ibe Kachikwu in that regard and making sure that gas policies – fiscal policies, as well as infrastructural changes – are implemented complete the value chain?
That is the interesting thing about public service. No ministry can provide all of these services on its own. At the very minimum, you will need project planning and finance. At the more complicated levels, you will need other ministries.
To the extent that we want to do gas-fired plants, we depend on the Ministry of Petroleum, which is responsible for energy resources and extracting carbon assets, to provide fuel feedstock for gas power. We are collaborating. He knows that there is a gap in the supply of local gas consumption to fire the existing turbines that do not have gas access. This is an opportunity where we are working to accelerate access of investors to gasfields so we can immediately begin to take position, sign gas agreements, build processing plants and also sign gas supply contracts with the power plants.
If we want to develop any coal-fire power plants, we would have to work with [the minister of] solid minerals, who is responsible for mines. They control our feedstock for coal power. Similarly ministry of Water Resouces controls our feedstock for hydropower. Again, there is collaboration in all of these with the Ministry of the Environment because of our environmental obligations, our treaty obligations and global agreements that we have signed and all of our original commitments to ensure we develop our quest for energy without damaging the environment for our people and for future generations.

What message can you send to global investors to bring them into the country so we can get this going more quickly?
It is tempting to say there is a particular thing you want to say to investors in order to bring them. The reality is that the investors are already here, in very massive numbers. Those who still wish to come only need to know that the basis for investment, which is security, has been addressed by this government. The respect for obligations and contracts, which lies at the heart of integrity and open governance, has been addressed by this government, as a presidential commitment. The president is leading from the front in these areas.
Of course, the additional thing is to create the economic environment. The market exists, and it is a very large market. Return on investments is really attractive, nothing like what you will find in many countries. There is also a presidential committee now on enabling business to prosper. They will essentially be looking at how each ministry reviews its procurement and procedural processes in order to see what it does not need and take it out, reducing the number of steps it requires to get certain approval on certain commitments. All of this is going on.
In co-ordination with all the affected and participating ministries, the Ministry of National Planning has a 34-point economic commitment of this government. One of its points is to ease the process of doing business and improve Nigeria’s global ranking in that. Contracts will be respected; the rule of law will prevail. That is why you will see that no contracts signed by the past government have been cancelled simply because the government has changed. Those are very strong statements for investment and political stability, even if there is governmental change.

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