Seeing power generation as a business opportunity: African CEOs weigh in

Africa’s power sector was one of the key issues discussed at last month’s World Economic Forum on Africa, held in Kigali, Rwanda. Speakers on different panels talked of how power shortages affect their businesses, while players in the energy industry deliberated the challenges, opportunities, and trends.

Several business leaders highlighted that poor electricity access is constraining the continent’s economic growth.

Akinwumi Adesina, president of the African Development Bank (AfDB), noted Africa “cannot industrialise” without improving power generation capacity.

Adewale Tinubu, group CEO of Nigerian energy company Oando, reckons Africa is “potentially the largest power market in the world”, based on available resources and demand for electricity.

“We are losing a wonderful opportunity to leapfrog out of poverty by not having a more sustainable or robust energy policy,” said Tinubu. “I think… without a doubt, the biggest challenge we have to economic growth is really our poor consumption of energy, and invariably our very expensive consumption of energy. We are never going to become an exporting continent until we lower our cost of energy and we take advantage of these different [energy] sources.”

Although there has been some momentum in developing power projects in recent years, sub-Saharan Africa still has a long way to go with hundreds of millions of people not having access to grid-connected electricity.

According to John Rice, vice chairman of General Electric, there are some well-intentioned initiatives geared towards meeting the energy gaps, but challenges related to financing, bureaucracy, traditional risk analysis, and decision-making based on election cycles have led to delays.

He cited the case of the US-backed Power Africa initiative, which was launched in 2013 by President Barack Obama with a view to “double access to power in sub-Saharan Africa”. Power Africa, supported by a host of governments and private sector players, has an ambitious goal of adding 30,000MW of electricity.

But, Rice noted, so far the number of megawatts added onto the grid directly related to the initiative “is very little”.Moving faster

Jasandra Nyker, CEO of BioTherm Energy, a Southern Africa-focused investor in energy projects, called for a greater sense of urgency in developing projects.

“When I talk sense of urgency I see [projects] needing to happen in the next two to three years,” said Nyker. “In my company, we [moved] from site identification to… providing power to the grid, it took us 36 months and we did that twice. So if a small company like mine can do that, I think more and more players out there can actually do it.”

Nyker said her company was able to complete projects swiftly by working with surrounding communities to avoid conflicts over land. The community understood what was being done, how it would be done, and when benefits would accrue to them. BioTherm also managed expectations, and ensured the project was bankable from day one.

Regional projects

Oando boss Tinubu suggested the development of more regional mega-projects in the continent. But Nyker noted such projects are complex due to varying policies and structures in different countries. She cited the case of theDemocratic Republic of Congo’s Grand Inga project, one of the world’s largest proposed hydropower schemes.

“There is a lot of complexity when we look at regional integration, especially when it comes to a grid-connected project,” said Nyker. “If we really want to solve the energy crises in Africa we need to look into our countries first, before we think big. I think the Grand Inga project is very ambitious but I don’t think we should be setting our hearts and hopes in terms of that being a solution to our power needs because it is not going to happen in the next two or three years.”

However, Erastus Mwencha, deputy chairperson of the African Union Commission, observed that some regional projects are taking shape. He gave the examples of Ethiopia supplying power to Kenya, and the West African Gas Pipeline – a high-pressure gas transmission system that exports gas from Nigeria to Ghana, via Benin and Togo.

“There are regional initiatives, but of course we need to see more of these,” said Mwencha.

Private sector involvement

Tinubu noted the private sector can play a significant role in power generation, but only if there is a friendly business environment. He gave the example of Nigeria that has become reliant on private diesel generators, which are pricier to operate compared to industrial power.

“What was missing was having an enabling environment, which the government has finally realised and has privatised the power system, liberalised tariffs and in the process we are now seeing the private sector getting involved in building new power plants, and we are now attracting global capital.

“The difference is power is now seen as a business opportunity for investors to make a return,” said Tinubu. “People now have access to cheaper power than when the government was subsidising and [was] unable to meet that demand.”

Signaling continued investor interest in power projects, Tony Elumelu, a Nigerian investor and chairman of Heirs Holdings, noted he would soon be making a US$2.1bn energy transaction.

“That is an investment we are making, not… out of philanthropy, but because we see the returns on investments is quite high in Africa,” said Elumelu.

AfDB boss Adesina noted that over the next decade Africa must strive to attain “universal access to electricity”.

“We have got to be so impatient with moving Africa forward relentlessly – we have no choice. In 2025, there is absolutely no reason why Africa should not be totally lit up with the power it needs to industrialise, because we must not forget no economy ever develops unless you have the base load power to drive industries and be competitive,” said Adesina.

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Chris Edeh September 24, 2016 No Comments

Nigeria Should Be Proud Of Climate Change Agreement

Last December, 195 countries gathered in Paris to negotiate a new global climate agreement under the United Nations Framework Convention on Climate Change (UNFCCC). The result – the first-ever universal, legally binding global climate deal – sets out a global action plan to put the world on track to avoid dangerous climate change by limiting global warming to well below 20C. To further underline their determination countries also agreed to pursue efforts to limit temperature increase to 1,5oC.

Now, 10 months on from that historic outcome, the European Union (EU) remains proud of the ambitious Paris Agreement and Nigeria should be too. However, there is no room for complacency after the success of the Paris Conference; for the vision of a global low emissions future to materialise, our attention needs to turn to putting our words into action.

Already this year, we have seen encouraging signs that our partners around the world are keen to maintain the unprecedented political momentum in support of climate action. More than 180 countries have now signed the Paris Agreement and 22 have completed their domestic ratification procedures and become Parties to the Agreement. We congratulate Nigeria on its announced plans to sign and ratify the Paris Agreement later this month.

Ratification is an important step towards implementation of the Paris Agreement but ratifying the agreement on its own will not deliver the necessary greenhouse gasreductions, adaptation action and financing. Equally important are the steps countries will take to meet the commitments made in Paris, starting with the policy and legislative frameworks required to develop robust national climate plans and international approaches.

The EU and its Member States are taking concrete implementation very seriously. We are moving forward with our ambitious domestic climate policies, with new proposals that will help us meet our emissions reduction target of at least 40% by 2030 and further drive the transition to a low-carbon economy. We hear and understand concerns that taking action against climate change can affect economic growth. But we have found that the opposite is true: our emissions have decreasedby 23% since 1990, while GDP has grown by 46% in the same period. During these years we have created new jobs, businesses, technologies and competitive advantages that prepare us better for the new climate compatible economy.

The EU has more than two decades of experience in developing and implementing an ambitious climate policy, but we know that many of our partners are doing so for the first time. We stand ready to share our experience and lessons learned for the benefit of others – in fact we already have extensive climate policy co-operation with some of our key partners. Developed countries/major economies have a special responsibility to take the lead, in both domestic action and in supporting the most vulnerable countries to make the transition to low-carbon, climate resilient economies. The EU co-operates with Nigeria for an increased use of renewable energy, mainly solar power, and supports the energy sector to improve access to electricity for rural communities. We also contribute with planting and regenerating of trees, promote clean cook-stoves and the reduction of fuel wood consumption. The EU and its Member States stand ready to support Nigeria in delivering her Intended Nationally Determined Contributions (INDCs). This could be done through reducing gas flaring, developing solar energy, improving the efficiency of gas-to-power stations, and through formulating “green” policies, in particular in areas of transport and agriculture.

As well as developing long-term climate strategies, there are actions we all need to take now. In just a few months, countries will gather in Marrakech to start to add the technical detail to the breakthrough political agreement in Paris. Building capacity to act, addressing loss and damage associated with climate change and setting out a roadmap to reach climate finance targets are just some of the issues on the table. Before then, countries will also aim to reach multilateral agreements on limiting aviation emissions and phasing out highly climate warming gasses used in refrigeration and air conditioning.

And it is not just governments taking action. Businesses, cities and civil society all have a crucial role to play in delivering the action on the ground that will really make a difference.

Paris was a defining moment in the safeguarding of the planet for future generations.We must maintain that momentum in the months and years ahead, because the prize is worth it: lower emissions, greater energy security and energy efficiency, innovation-driven growth. There is lots of work to do, and we look forward to continued partnership with Nigeria.

Co-signed by EU ambassador, Michel Arrion; EU delegation to Nigeria and ECOWAS; France’s High Commissioner to Nigeria, Denys Gauer; High Commissioner of the UK, Paul Arkwright and High Commissioner of Germany to Nigeria, Dr Bernard Schlagheck

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Chris Edeh September 23, 2016 No Comments

Students win N6m for biogas project

By winning the entrepreneurship challenge of the Ready.Set.Work (RSW) project of the Lagos State Government, Oluwafemi Sarumi and Samuel Dada have put their school on the map.

The Lagos State College of Health Technology (LACOHET) in Yaba was little known before last Thursday when Sarumi’s and Dada’s biogas renewable energy project won the grand prize of N1million and another N5million announced by Governor Akinwunmi Ambode at the event held at Landmark Event Centre on Victoria Island.

The event marked the end of the 13-week employability and entrepreneurship training project, which exposed 500 final year students of the Lagos State University (LASU), Lagos State Polytechnic (LASPOTECH), and LACOHET to soft skills and business modules intended to enhance their chances in the labour market.

The audience voted the biogas project as the winner. Before the result was announced, rather than remain silent in anticipation of the winner, the students were heard chanting “Biogas”in hushed tones.  It was deemed better than the other two final projects, Onebox, a social media platform for graduates to discuss topical issues, and Artisans on campus, a website designed as a hub for student artisans to showcase their expertise so that those in need of their services could reach them easily.

Biogas beat 24 projects to clinch the crown

Sarumi and Dada, who call themselves the Biogas team, said they would be in the business of converting animal waste, using a bio digester, into biogas, which is useful for cooking and electricity.

Sarumi said their project was borne out of their desire to solve environmental problems in the country.

“Our business would solve two major problems. First is to solve an environmental problem, that is the problem of proper management of animal waste at our abattoirs. And to provide the potential substitute in form of biogas that can provide necessary energy value that can be used for cooking at affordable rates by Nigerians. It can also be used for production of electricity.”

The duo, who studied Environmental Health Technology, said paying attention in class helped them come up with the project.

“Biogas contains methane, a combustible gas, which is present in  normal liquefied petroleum gas. We are environmental officers now, because we are now graduates so we have done our research and we know that our business was going to be the first of its kind in Nigeria. The bio digester, is what the waste passes through before producing a biogas, we have created one in our school for demonstration. There is  bio digester in a few other institutions like the Ogun State College of Health Technology, but it is not being used for commercial purpose, rather for laboratory experiment. But as a result of our work, waste is going to turn to wealth.”

In addition to the prize money, Sarumi and Dada would get N100,000 upkeep allowance monthly for six months, so that they would not spend their seed capital.

First runners-up for the competition, the One box team, got N500,000 seed capital; while the Artisans on Campus group got N250,000 for coming third.

Of the 500 students that registered for the programme, 468 graduated, having met the requirements for conclusion of the programme – namely punctuality, 80 per cent attendance, and completion of all assignments.

They were exposed to soft skills training and benefited from talks delivered by CEOs of blue chip companies.

While the students that underwent the entrepreneurship stream of the project would undergo three-month apprenticeship with established entrepreneurs, 95 of those who passed through the employability stream and scaled interviews by employers would undergo six-month paid internships in various organisations.

The students would work in firms, such as Total, Price Water Coopers (PwC), Access Bank, Gtbank Plc, Systemspecs, FCMB, Etisalat, KPMG, Nestle Plc, and Stutam.

Governor Ambode’s joy at the success of the scheme was the reason he gave an additional N500,000 to the winners.

He urged the participants to continue in the fervor of the programme to improve their skills.

He said: “This initiative will enable many of you seated here today to get internship placements in high ranking corporate organisations, and also provide a platform for those with viable business ideas to benefit from angel investors and the Lagos State Employment Trust Fund.

“Ready, Set, Work has been a journey requiring passion, diligence, discipline and perseverance. I say big congratulations to those of you who made it to this stage. I must emphasise, however, that this is only the beginning. In the face of ongoing economic challenges, this is a time to push ahead with the same strength and focus that brought you to this point, and to pursue with vigour the knowledge, skills, and ideas formed in you over the last three months. The private sector would benefit from your passion and professionalism, while the entrepreneurial world awaits your vision- driven ideas.”

Special Adviser to Governor Ambode on Education Mr Obafela Bank-Olemoh and the brain behind the scheme, said RSW was initiated to bridge skills gap in the labour market.

“The RSW was a response by the government to the challenge of the private sector that the quality of graduates being produced was not capable of driving the economy.  The key thing here is that we want Lagos to continue to prosper, and the only way to do that is by growing our people. We want our graduates to be one of the first people that the corporate organisations want to employ,” Bank-Olemoh noted.

Commissioner on Economic Planning and Budget, Akinyemi Ashade, added: “We have a lot of skills to fix. The scheme is meant to fix  specific problems. We focused on making them more employable than they have been trained at school and we tried to hone their vocational skills.”

It is not only the government that is celebrating the success of the RSW, the private sector has also lauded the initiative.

Chief Executive Officer (CEO) of Etisalat Nigeria, Mr Matthew Wilshere, who volunteered as a brands training facilitator during the project, said: “We partnered with Lagos State on this scheme because we are a youthful brand. ‘Ready Set Work’ is a fine initiative. The periods of transition between school and work and even during work, between positions, for every person is very important. It is impressive for Lagos State to help people in this transition.”

Mr Uyi Akpata of PricewaterCoopers (PwC) said his organisation invested resources into the vision of the government on RSW because it was in line with the organisation’s vision, and promised to continue with the partnership as long as the scheme continues.

PwC employed 10 interns and  Akpata promised them jobs based on their performance during their internship.

Founder of Career Times, one of the facilitators of RSW, Kumbi Lawoyin, said: “Many young graduates have the potential to develop all their skills but don’t have the platform. Many of them displayed knowledge of their school work but lacked soft skills. RSW provides the platform to gain all this knowledge and understand its application.”

For the students, the programme has given them a head start in their careers.

Olatunji Salau said it exposed him to skills he did not know were important.

“Initially, I thought it was a vocational course but I was exposed to skills I did not even know were important; for example, soft skills. I learnt how to take initiative, how to realise that if an environment is not convenient for me, I can rise to the occasion and make it convenient for me.”

Loveth Igbokwe said she was graduating from school as a more confident person.

“RSW helped me develop my self confidence and to focus on my future. I realised that my future starts now and I have to invest in my future from today. It changed my orientation about life. I used to think getting a job would be difficult but now I know I can harness my skills and I can achieve anything I want,” she said.

Oluwatobi Damilare appreciated the government, advising his peers to do more with what they have learnt.

“The SA has always told us, it is not enough that we have been given this platform but for us to take initiative. It is not the knowledge that matters but what we do with the knowledge. We must be good representatives and ambassadors of the RSW initiative,” he said.

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Chris Edeh September 21, 2016 No Comments

IFC, UK govt to develop solar energy prospects in Nigeria

the International Finance Corporation (IFC) and the UK Department for International Development (DFID) are facilitating the deployment of off-grid and embedded solar inNigeria.

Through this partnership, IFC’s Off-Grid and EmbeddedSolar Market Development and Finance Programme, and DFID’s Solar Nigeria Programme are launching a new programme in Nigeria to finance and develop the solarmarket.

One of the joint programme’s major aspects will be to provide technical support and possibly financial instruments to localfinancial institutions to develop business solutions for the emerging solar market, particularly solar photovoltaictechnology investments. “We are committed to increase investment in off-grid energyand accelerating the delivery of solar energy systems that will help improve access to energy for more businesses,” DFID Nigeria head Ben Mellor said.

IFC country manager Eme Essien Lore agreed, noting that the solar market has the potential for “quick wins” in bringing access to electricity for more businesses as it takes less time to install. “It also enables the production of electricity at the point of need, which eliminates transmission losses to a great extent. We are working with DFID to accelerate access to electricityfor more businesses and help contribute to economic growth in the country,” she highlighted.

This programme is part of the World Bank Group’s EnergyBusiness Plan for Nigeria where each World Bank Groupinstitution leverages its competencies and products to provide solutions for projects that encourage the viability and contribute to the sustainability of the power sector. Over the past three years, IFC has financed close to $3.5-billion in renewable-energy projects worldwide, including biomass, geothermal, hydropower, solar and wind.

A study of the evaluation of solar energy variation in Nigeria, published by the International Journal of EmergingTechnology and Advanced Engineering, showed that Maiduguri seemed to experience the greatest solar irradiance range in the country of between 5.5 kWh/m2 a day and 6.7 kWh/m2 a day.
The country, on average, receives solar radiation of about 7 kWh/m2 a day in the far north and about 3.5 kWh/m2 a day in its coastal regions.

 

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Chris Edeh September 13, 2016 No Comments

Sweden, Lagos to collaborate on waste to energy development

The Lagos State Commissioner for Environment, Dr. Babatunde Adejare has received in audience, Prof. Nazdaneh Yarahmadi, SP Technical Research Institute of Sweden and the VINNOVA, the Swedish government agency that administers state funding for the research and development’s project leader, representing the team from Sweden.

The meeting, which had the Director, Legal and Advisory Services, Lagos State Waste Management Authority (LAWMA), Mrs Yinka Adeyemi in attendance, was aimed at discussing the importance of waste management and waste to energy development in the State.

Dr. Adejare opened the meeting by expressing the importance of waste management to Lagos State. He specifically mentioned and highlighted his gratitude to the Chairman, All Progressives Congress (APC) Scandinavian Chapter, Ayoola Lawal, for organizing the meeting.

According to Professor Kim Bolton, Researcher from University of Borås, this project is firmly based on, and extends, the present UDI project, which is based on establishing facts and tools to measure and predict the technical status of pipelines for water, sewage and energy distribution.

“We will investigate the demand for these solutions in Nigeria. At the same time we will extend these activities to waste management, which we know is a challenge in Nigeria and where we have begun cooperation. In order to give the pre-study a concrete and manageable activity, we will focus on the piping systems used in water and sewage systems, as well as waste management via recovery to energy. In addition, the project will investigate methods and partners for implementation of the innovations that are identified as most possible to succeed.

“SP, 4IT, FOV Fabrics AB and University of Borås, together with support from Sweden Water Research, WIN, and the know-how accumulated in the Swedish water industry can deliver enormous value to countries like Nigeria, and at the same time provide a great economic potential return. The consortium has extensive experience in international projects as well as strong and relevant networks in Nigeria,” Bolton said.

At the meeting, Mrs Adeyemi introduced the VINNOVA project and presented LAWMA’s interest in the project while Prof. Yarahmadi and colleague explained the outcome of the project in some detail as well as the meetings that were held with Lagos State University and LAWMA. We also described our visit to the Olusosun landfill as well as the material sorting facility that is located near Ojo, an outskirt area of Lagos. We presented our admiration at the progress that has been made at the material sorting plant during the past five years, and expressed our interest to support further development of material sorting in Lagos.

Adejare recounted interesting and relevant details of the current and future development in waste handling in the state.

“There are plans to introduce new trucks for waste management and to develop new landfill sites. The material sorting plant outside Ojo may be closed since it is located too close to a local hospital,” the commissioner said.

The commissioner confirmed that the project is timely and that it can support the planned development in Lagos. He gave further assurance for the collaboration and co-creation of innovations between Sweden and Lagos.

Stakeholders Seek Special Fund for Renewable Energy

Disturbed by the dwindling fortunes of the nation’s power sector, stakeholders yesterday called for the establishment of a fund to boost the quest for alternative sources of energy. They also want a policy with incentive support for families and communities. The experts spoke at an energy efficiency seminar in Abuja.

National Project Coordinator of the United Nations Development Programme (UNDP)-sponsored Energy Efficiency Programme, Etiosa Uyigue, noted that Ghana had already established a similar fund to stimulate diversification.  He said: “I know there is already a fund for renewable energy in Ghana. The fund supports renewable energy initiatives. We can also do the same in Nigeria. The upfront cost for some of these renewable energy schemes is high. That is why government support is very essential to push the market.

“The fund could be applied in several ways. It could be in the form of an incentive for those who want to use renewable energy as an alternative source of energy. It could be an incentive for them. It could also be a tariff holiday for a period of time. It could be to subsidise for the product.”

An Assistant General Manager at the Nigerian Electricity Regulatory Commission (NERC), Dr. Yusuf Abdulsalam, submitted that though energy generation from alternative sources was much more expensive, but surmountable.

“Renewable energy sources are much more expensive, but cheaper eventually. There is need to have a way of funding it and encouraging people to venture into it. If there is a fund in place, those who are unable to venture into it can access finance and pay back over time. It can make more power available for our benefit over time,” he remarked.

The convener, Deborah Tamuno-Tonye Braide, stressed the importance of energy efficiency in the nation’s electricity power sector. Braide, is a National Youth Service Corps (NYSC) member at the Renewable Energy Research and Development Division of NERC.

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Chris Edeh September 4, 2016 No Comments

Solution to Economic Recession Is Investment in Renewable Energy – Expert

A development economist, Dr Chidi Onuoha, says the solution for Nigeria to come out of the current economic recession is investment in renewable energy. Onuoha, National President, Sustainable Energy Practitioners Association of Nigeria (SEPAN), made this known in an interview in Abuja on Saturday. He said that policymakers had not discovered the secret in renewable energy and how it could help to restore the economy.

The development economist said that the association would educate the policymakers on how to utilise the country’s renewable energy potential. “What we are doing now is to educate them that money should be appropriated toward renewable energy and that renewable energy are not cumbersome. “The technology is not expensive; the price is coming down now; so, it is good for us to invest in it to boost the economy,” he said.

He spoke on the recent International Monetary Fund (IMF) report which stated that South Africa had overtaken Nigeria as the biggest economy and advised the country to invest in renewable energy. The position IMF report reclaimed for Nigeria using the GDP at the end of 2015, the size of South Africa’s economy was 301 billion dollar at the rand’s current exchange rate, while Nigeria’s GDP was 296 billion dollar.

Onuoha said “Nigeria was the largest economy in Africa before with 510 billion dollar when you compare it to 4,000 megawatt of energy and economy that has the highest. “That means, there is energy deficiency in the country. “What it means is that if Nigeria economy is large, South Africa has more than 20,000 or 30,000 megawatts and they have 5,000 megawatts of renewable energy alone. “Nigeria’s electricity came down with challenges to 2,800 megawatts,” he said. Onuoha said one of objectives of SEPAN was to encourage the Federal Government to achieve 5,000 megawatts of renewable energy by 2020 through its advocacy work.

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Chris Edeh August 31, 2016 No Comments

FG Has Made Adjustments to Promote Renewable Energy

The Nigerian Electricity Regulatory Commission (NERC) has said that it has made remarkable adjustments to accommodate and promote investments in Nigeria’s renewable energy sector.

In a presentation at the recent second edition of the Nextier Power Dialogue in Abuja, the regulatory agency identified some of the adjustments to include: a very attractive renewable energy feed-in-tariff, and a regulation that ensures that local electricity distribution companies (Discos) source for up to 50 per cent of their power from renewable sources.

The agency also described the long-term cost recovery cycle as another significant incentive to make the country to become a choice destination for renewable energy investors.

NERC’s acting chairman, Dr. Anthony Akah, who was represented by the commission’s Deputy General Manager in charge of Renewables, Research and Development, Dr. Haliru Dikko said the country’s challenges with conventional power generation gave renewable energy a perfect condition to become the energy source of choice for consumers.

He stated that though there were still challenges in developing renewable energy projects in the country, the commission’s regulations had largely ameliorated the challenges and unlocked investment opportunities in the sector.

Akah described the ‘Feed-in Tariff Regulations for Renewable Energy Sourced’ , which targets at least 1,000 megawatts (MW) of electricity from renewables by 2018, and also allotted respective volumes of renewable energy procurement to Ikeja, Ibadan, Eko, Kaduna and Kano Discos, as a remarkable piece of law enacted to woo investments in the sector.
“The Act gave NERC the authority to issues licenses for power generation over 1MW and also empowered NERC to set tariffs for operators.

“NERC had streamlined the licensing process so any applying investor meeting the new requirements would be issued a power generation license expeditiously. Changes have also been made to the feed-in traffic mechanism, and this is important for investments in the market to address the high demand and low supply of electricity in the country,” Akah said.

Similarly, other speakers such the Technical Lead for British-funded Solar-Nigeria project, Tinyan Ogiehor and Head of Power and Procurement at Nigerian Bulk Electricity Trading Plc (NBET), Yesufu Alonge made presentations on how the country could maximise her renewable energy potentials.
Ogiehor in his opening remarks, highlighted the opportunities and challenges in the off-grid space. He proposed policies to tackle the challenges in the off-grid electricity markets, adding that such policies should include off-grid mapping, technical skills, mobile infrastructure and a designated body to drive the country’s off-grid electricity market.

Alonge who spoke about current investment opportunities available in Nigeria’s solar energy market place due to the electricity supply deficit, noted that the country’s small hydro dams were other good alternative renewable energy sources that could be explored by investors to stabilise the power supply in the country.

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Chris Edeh August 24, 2016 No Comments

Japan donates $9.7m solar power project to Nigeria

The Japanese Government, through its agency, Japan International Cooperation Agency, has donated solar power worth $9.7 million to the Federal Government to boost electricity in the country. The Ambassador of Japan to Nigeria, Mr Sadanobu Kusaoke, disclosed this in Abuja on Tuesday during the inauguration of the project.

Kusaoke stated that Japan considered the power sector as one of the most important areas to enhance Nigeria’s socio-economic development. He said, “Since from 1970s, Japan has helped to finance power sector to increase the capacity of power in Kainji dam hydro power station.

“This is the 10th project of power sector by the Japan’s government since then and this will not be our last.” He said the project which entailed the introduction of clean energy by solar electricity was donated by the government of Japan to boost power and water supply at Usman Dam Water Treatment Plant.

He said, “The project is being executed with grant assistance worth Nine Hundred and Eighty Million Japanese YEN (980,000,000 JPY) (equivalent to approximately 9.7 million USD) through JICA.” According to Kusaoke, stable power supply is crucial to support industry and to improve economy and the lives of people.

The ambassador emphasised the importance of stable power supply to Nigeria’s quest to diversify her economy. He commended the designer of the project, Toyota Tsusho Corporation, for its design, management and the completion of the project on schedule. Kusaoke, who explained that the project was capable of generating 1,496MWH, added that this would result in reduction of N31.5 million per year for payment of the electricity bill.

Earlier, Mr Hirotaka Nakamura, Chief Representative of JICA, Nigeria office, said improving core infrastructure including power sector in Nigeria was one of the priority areas of the agency in Nigeria. According to Nakamura, developing alternative energy resources such as solar, wind and hydropower will boost electricity in the country. He explained that the project was designed to introduce a demonstration unit of solar electricity generation system with a view to increasing its economic strength on a sustainable basis.

According to the JICA official, with the Japanese assistance, about 1.2 mw of grid connected solar generation will be gained at Usman Dam Water Treatment Plant to supplement electricity supply from the national grid. He said, “Following successful tests on the installed solar system, the first phase of the project with generation capacity of 975kwp is being commissioned today. “The second phase will bring additional 207kwp generation to this system hopefully in January 2017.”

Nakamura further stated that the project would contribute to the improvement of quality water supply in the Federal Capital Territory. He, therefore, appealed to the FCT administration through its water board to handle the project with care and also provide sufficient funds to maintain the generation system. In his remark, Alhaji Hudu Bello, the Director, FCT Water Board, who expressed gratitude to the government of Japan and its agency JICA, said the project would improve revenue accruable from the water sector in the FCT.

He said, “This is elaborate project that will improve water supply to the residents of Abuja; it will also reduce the rate at which we consume diesel to pump water.”

Bello said the project would reduce the cost of generating electricity and also contribute power to the national grid to improve supply within the nation’s capital.

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Chris Edeh August 24, 2016 No Comments

Banks Turn to Renewable Energy to Cut Cost

In a bid to cut the increasing cost of running their branches across the country, many Deposit Money Banks (DMBs) are now opting for renewable energy. LEADERSHIP gathered that the new strategy by the banks is to enable them spend less on diesel and maintenance of their power generating plants. While some of the banks are already at the pilot stage of test-running solar panels in some of their branches, others have perfected the use of inverters in running their Automated Teller Machines (ATM) across the country.

It was also gathered that some of the banks now use Uninterrupted Power Supply (UPS) devices in some of their operations without reverting to power generating plants. One of them, Sterling Bank, recently commenced the pilot scheme of its solar plan. Likewise, Fidelity Bank which spent over N372 million in 2015 on power generation said it has now adopted the use of UPS’ and inverters to power its ATMs and major operations. This cost cutting measure has become even more popular among the banks as a recent directive from the federal government and tussle with labour unions put paid to their plans to cut personnel cost by shedding staff weight.

The managing director of Wema Bank, Segun Oloketuyi, said the bank had become very prudent in the management of its resources to deliver on its set goals. He said one of the strategies the bank had adopted was to allow some of its departments that have no reason to stay beyond a certain time, close early, to reduce energy consumption. LEADERSHIP reports that the price of diesel has lately, risen to as high as N210 per liter, spiking the cost of operations as irregular power supply has necessitated the use of power generating plants not only for the banking halls, but also for the ATMs.

Recall that in 2015 as well as early this year, at the peak of the fuel scarcity, many banks limited their hours of operation due to unavailability of diesel, while some banks could no longer operate their ATMs. Consequently, some of the banks as a cost cutting measure, have resorted to the use of inverters to run their ATMs and for major operations.

Last year, five banks spent N18.78 billion on fuel and maintenance costs, an expense that is eating into their declining income. While some banks with smaller branch network spent close to N400 million on fuel and maintenance costs, bigger banks with expansive branch network were the worst hit as they had to spend more on diesel and servicing of their power generators. One of the top tier banks spent no less than N10.36 billion on fuel and generator maintenance in 2015 while another spent about N5.78 billion on generating power to run its operations last year.

The growing cost of operation, alongside the rising non-performing loans in the banking industry are evident in the six months’ result of banks for the first half of 2016 as they continued to post lower profits. Eight banks recorded a total profit of N111.13 billion, indicating a 14.3 per cent decline compared to N129.73 billion profit recorded in the first half of 2015. Although the 2015 results of the industry had shown a declining profit, there are indications that the situation would not get better as analysts predict a lower profit from the industry at the end of the 2016 financial year.

According to the Managing Director and Chief Executive of SunTrust Bank, Nigeria’s first full financial technology bank, Muhammed Jubrin, the cost of maintaining a large branch network has been a dead weight for the banking industry. He stated that SunTrust Bank, which recently commenced operation, would only have the minimum number of branches required to operate as the cost of operation of most banks was growing under the weight of branch network which cost a lot of money to maintain. According to experts, while most renewable energy options require higher capital investment initially, in the long run, the costs associated with generation and maintenance over the lifetime of the systems are marginal. As such, they are economically viable especially in developing nations.