Sunday, July 31, 2005

Prof Nnaji Leads IPP Project for Aba

The article below is about the Independent Power Project designed to supply uninterrupted power supply to Aba , the heart of Nigeria's creativity..indeed our own Taiwan..may be China. The project is privately funded and managed by Prof Nnaji former head of the US national science foundation and former science and technology minister. This is a very good idea,me thinks it need to be replicated in rural areas (in forms of renewble energy sources e..g solar, wind etc.) and urban areas to solve our chronic energy problems (estimated at 20MW per day while we currently produce 4.5 and transmit 3.5- seems hopeless unh?). Hopefully with the 10MW due to come onstream in 2007, these IPPs would go a long way in cushioning the shortfalls..what do u think?


For Aba Industries, Light At End Of Tunnel By C.Don Adinuba
ABA, the leading commercial city in Abia State, is one of the leading manufacturing centres in Nigeria. It also shares with Nnewi in Anambra State the distinction of being the home of indigenous technology. Aba has, alas, been for some years in a state of arrested development. The principal reason: poor electricity. Some sections of the city do not have electricity for days; and when power is eventually restored, the voltage is too insufficient to power a four feet fluorescent tube.
" Inadequate electricity is one of the most critical problems we have been experiencing", complains Onwuka Kalu, chairman of the Onwuka Hi- Tek Industries Plc which produces vehicle and industrial machine parts and tools as well as nails. "In the last one year, we have spent over 20 million naira on a new set of generators to revive production. Still, we produce only skeletal services largely because of energy to power our heavy duty machines".
The good news is that there is now light at the end of the tunnel. Bart Nnaji, one of the world's leading authorities in industrial engineering, is now working assiduously to end the energy crisis by building a 105 megawatt power generating station in Aba at over 100 million dollars. "As a committed campaigner for indigenous technology, one is appalled at the power situation in Aba. Instead of just criticizing the government relentlessly, I took up the gauntlet as an engineer and got cracking. The government is not in any way involved in this project. All I wanted-which is what I have got-- was the permission to build an independent power station to serve the promising industries; and now commercial concerns and residential houses have been added to the list.. For granting this permission, I am grateful to the president, the Ministry of Power and Steel, and the National Electric Power Authority. I am also grateful to the Abia State government for its enthusiasm, and to our host community for being very development conscious."
Nnaji has considerable experience in independent power generation business. Vice President Atiku Abubakar commissioned in December,2001, the 15 MW Abuja Emergency Power Project built by Geometric Power Renatech Ltd, a special purpose vehiclespv, of which he was the chairman. The SPV provided the national headquarters of the Nigerian National Petroleum Corporation, Aso Rock, the International Conference Centre and other places with uninterrupted electricity till last March when the project ended.
Geometric Power is guaranteeing 90 per cent supply efficiency when the Aba project is completed in 2006. Why not 100 per cent guarantee? "It is technically improper for anyone in the world to make that kind of guarantee", explains the William Kepler Professor of Engineering at the University of Pittsburgh on a leave of absence from the University of Massachusetts as the first black Distinguished Professor of engineering
American history and Director of the Robotics and Automation Laboratory. " Once in a while we may shut down supply for one hour to carry out scheduled maintenance. The off-takers, that is our customers, will, of course, be informed in advance. We are going to achieve 90 per cent efficiency, but we are deliberately guaranteeing the conservative 90 per cent efficiency level."
Nnaji assures that the Aba project will be world class. The three turbines are coming from General Electric, the world's greatest electric company. Each turbine has a capacity of 35 megawatts in simple cycle at the Aba ambient conditions. Shell is providing the gas, but there is a provision in the power plant for diesel in case there is a disruption in gas supply. Much of the financing is coming from the World Bank. KPMG is the financial adviser. The Paul Usoro chambers which is fast acquiring the reputation of being Nigeria's leading telecommunications and power law firm is the legal adviser. The Nigerian technical team of Geometric is led by Ben Caven widely regarded as probably NEPA's best design engineer ever. Caven was until 1999 NEPA's executive director in charge of engineering, transmission and generation.
Aba is estimated to require 90 MWhour, with industries accounting for two thirds. But this is suppressed demand arising out of the state power utility's inefficiency. In order not to take chances with their machines and production schedules, some industries in Aba have little or nothing to do with NEPA. An example is the Nigerian Breweries Plc which relies absolutely on its own 5,000 KVA generators. Geometric will provide Aba with 105 MW right from the first year;there is provision for expansion as demand is expected to climb to 125 MW soon.
Geometric Power is building its own 33 KVA distribution line to Owerrinta, Ogbor Hill, Factory Road and Port Harcourt Road from Osisioma , where the power station will be located. "Except for Owerrinta where the industry off-takers will take power directly from the 33KV line," explains Caven, "Geometric Power will build 3311 KV substations at Osisioma, Ogbor Hill Factory Road and Port Harcourt".
Industrial establishments in Aba will pay eight cents or 11 naira for every kilowatt per hour. A company like Nigerian Breweries currently spends 18 naira for the same amount of energy from its generators which consume 12,000 litres of diesel daily. Like the Star Paper Mill which is going to take 9MW per hour,the NB Plc has already signed a letter of intent with Geometric Power for the purchase of 3 MW/hr, though current maximum supply for its plant in Aba is 2.5 MW/hr. Said Festus Odimegwu, the brilliant, ebullient and energetic NB Plc Managing Director at the signing ceremony in Lagos: "Power supply from Geometric will translate to considerable reduction in energy cost. What is more, our generators will last longer, as they will now be used sparingly. Geometric is guaranteeing us 90 per cent supply efficiency....In other words, we shall be spending less resources on operations and maintenance."
Manufacturers in Aba could not have asked for a better present from any quarters, observes Ugochukwu Okorafor, until recently a top official of Afribank Plc. Okarafor has evaluated the project in his capacity as a leader of the Abia State Think Tank, alongside some stakeholders.
Odimegwu says the relationship between his company and Geometric Power is market-determined. "So long as Professor Nnaji and his international group provide us quality and reliable electricity at a competitive rate, we shall remain with them", he adds. He expects the relationship to last long " because of Nnaji's experience in building and running an IPP in Nigeria. He also has a reputation to protect. He is the first and only black director of the United States National Science Foundation and he heads the Centre for e-design and the engineering of new products at the University of Pittsburgh."

Odimegwu's interest in the Aba power project is not confined to the reduction of his company's production costs . A great believer in market forces, the corporate executive is excited anytime the Nigerian private sector extends its participation in the economy. He is delighted that the performance of Geometric Power will go a long way to influence the course of NEPA's privatization . "The government has no business being in business," he declares in a voice showing strong conviction about "private sector efficiency, as opposed to the corruption and politics of the public sector which reflect in the comatose condition of state-owned enterprises".
Odimegwu is certain that once Geometric Power comes on stream, manufacturing companies in Aba will start to do much better. "The improved performance," he argues, "will show in the enhanced prices of shares of the companies quoted on the stock exchange. The companies which are not yet quoted will be encouraged to go to the stock market. We really look forward to seeing the Geometric Power stock traded on the stock exchange."

Most chief executives of parastatals are known to be fiercely opposed to moves to privatize their companies or break their monopolies. So, when Nnaji applied to the Federal Government for permission to establish an IPP to sell power directly to the public, rather than sell through NEPA, some people expected NEPA authorities to forcefully kick against it. But this did not surprisingly happen. If anything, NEPA chief executive Joseph Makoju has been a strong advocate of greater private sector participation in the electricity sector. When he got to know of Geometric's application, he was practically over the moon. His reason was the imperative to meet the national target of generating 10,000 MW by 2007.

"The government cannot provide the 700 billion naira required to meet the national electricity needs", observes Kola Oni, NEPA's chief operating officer in the Lagos zone who represented the NEPA managing director at the letter of intent signing ceremony in Lagos between Nigerian Breweries and Geometric Power; Makoju could not attend in person because of the nationwide workers strike against the recent increases in prices of petroleum products which prevented him from leaving Abuja. Power generation, according to Oni, would not have been a severe problem in Nigeria if between 1990 2003 fresh facilities were built . To ensure that the nation meets the 10, 000 MW target in the next three years, Oni wants big private organizations to follow the Geometric Power example by investing in the power sector.

Nnaji is already thinking ahead of the Aba power project. He has accepted in principle the invitations from Governor Chris Ngige of Anambra State and the Chamber of Commerce, Industry and Agriculture in the state to build at least one big power station to supply electricity to Onitsha and Nnewi, two major commercial places in dire need of improved power supply. "I am keenly interested in helping to transform Nigeria's technological and economic landscape, beginning with the areas which most promote indigenous technology. Nigeria cannot take off industrially until the power problem is resolved substantially. There is no country I can call mine other than Nigeria."

Among the over 30 major industrial establishments in Aba which have expressed interest in subscribing to Geometric Power are Guinness, PZ, Aba Textile Mill, Glass Force, Nigerian Bottling Company, and Onwuka Hi Tek. Meanwhile, Sam Ohuabunwa, executive chairman of Neimeth Pharmaceuticals Plc, has disclosed that his company will soon open a factory in Aba in response to the establishment of a new power station dedicated to the bustling place fondly called Enyimba City.


Shola said...

This is an interesting experiment. I think given Prof. Nnaji reputation there is a chance it will be successful. The most interesting aspect though is the example it is showing that the private sector can be an agent of change.

geon said...

with large central power plants, reliable power transmission lines might be as expensive as the actual plant.

Busayo Michael Oluwagbemi said...

I don't think it is going to be a big deal recouping your invested income in Aba. If poor old and inefficient NEPA can break even, then any businessman with rudimentary knowledge of money making would make money..

umc said...

Kudos to Geometrics.
President Obj ought to have known, though he "now" does, that he should not only clamour to attract international investors but also put more effort not to (in the intransitive sense) detract the local investors.
The local (manufacturers)investors need the electricity much more than the international investors that are yet to arrive.
nevertheless after the longwait on Prof's IPP, it's good news really, the IPP it set to take off; A plus for Prof.

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