Friday, July 28, 2006

Aba (Nnaji's) Power Project Moves Forward

World Bank, firm partner on Aba power project

THERE are indications that the unstable power supply in the country may soon abate.
Reason: The Aba Clean Energy Carbon. (Private power project) contract was recently signed by the World Bank and Geometric Power Limited, the initiator of the project.
The Independent Power Project (IPP) has joint sponsorship from the World Bank, Community Development Carbon Fund (CDCF) and other environmental-friendly bodies.
In a statement, Chairman and Chief Executive Officer of Geometric Power Limited, Prof. Bart .O. Nnaji, said "the goal of the Geometric Power Limited as the main developer and sponsor of the project is to deliver electricity to consumers with the same availability and reliability as in developed countries.
He added: "We plan to achieve this through first class engineering design of the power plant and distribution networks and through World class management".
Speaking in the same vein, World Bank Country Director for Nigeria, Hafez Ghanem said: "This is a significant investment under Nigeria's new Power Act. We hope that the Aba project will be a prototype of how to stimulate growth and opportunities for Nigerians while projecting the local and global environment".
Also, Solomon Adegbie-Quaynor, the International Finance Corporation's (IFC) Country Manager for Nigeria said: "The Aba Clean Energy Carbon Project is a good example of how the World Bank group proactively supports project development in key sectors such as infrastructure and seeks to broaden support of local and national enterprises."
The 120 megawatt Aba energy project will construct an efficient, gas fired power plant, which will displace the electricity and steam currently being generated by industrial and large businesses in Aba.
Also, the project will introduce an efficient co-generation unit that will reduce Green House Gases (GHG) emissions that are responsible for climate change.
It will also have dual-free turbines that will solely use national gas backed up by diesel facilities in case of gas pipeline interruption.

14 comments:

t said...

FYI: This post is most closely related to this from July 2005 and this from November.

Michelle/ Ngozi said...

Any news on current staus of projetc now?? if commissioned in 2001 and scheduled for completion in 2006???

Dee said...

Thanks for the informative update. I'm quite impressed that the project is rolling on. Hopefully there will be no hiccups to the completion of the project. Success is essential for key pilot projects like this as the results will new open doors to major funding from institutions like the World Bank. The World Bank doesn’t fool around with money so I hope the Financial Tracking Systems are very transparent…if not this project may just fall on the way side like other potential development projects that died a ‘Nigerian natural death’.
By the way I'm one of those silent readers...just responding to T's iv.

t said...

...not so silent anymore :)
thanks.

t said...

" Michelle/ Ngozi said...
Any news on current staus of projetc now?? if commissioned in 2001 and scheduled for completion in 2006??? "

I don't know, maybe someone else does? It should be easy to check, especially in Naija papers, but I'll read up on this Aba power stuff online one of these days if someone else doesn't get to it and debrief us all first ;)

Afam said...

While I welcome a project like this one, I still believe that Nigeria will benefit more if a proactive and practical solution is looked into.

Why can't the relevant authorities divide the country (not politics or physically ooo) into regions with each region generating and distributing power based on the best natural resources within the region?

For example, South East could be powered with a coal fired power plant, parts of the North could be powered by Wind turbines, the present Kaiji dam etc, the South South could be powered by Wind turbines and gas fired power plants.

These things are doable and easy to implement, relying on elegant or one size fits all type of solution won't work, at least not in the near future.

t said...

Thanks, Afam, for writing a comment.
(I rely on the RECENT COMMENTS section to see new comments quickly, but this has been silently hiding the comments for some time, so I just noticed what you wrote.)

I definitely agree that grassroots solutions, including using the most abundant resources and/or starting businesses, will solve many problems. We must not always wait for the solution from the National level. I don't even think we must wait for a genius to divide the country into regions for different power strategies.

If someone knows how to deliver reliable quality power to one university, one town, one million people...DO IT, and that will be great!

t said...

Re: Michelle/Ngozi and Afam's comments

You're right - what's it with this electricity that it has to be so elusive...
I'll try to at least find out more, and at best get involved in a solution. It may take a while, but all your help and research contributions are appreciated.

t said...

The website of Geometric Power is here. "Someone" could update us on their progress, it's not on their site (yet.)

Another step forward:
Here is a very good reading list of papers related to solving the electricity problem, found by searching African Journals Online (www.ajol.info)
Depending on time, I'll actually try to tackle part of this problem (a little bit technical, but focused either on implementable policy or a business solution.) You're cordially invited to join me and/or suggest other interested people.

Comments wanted!

http://upnaira.googlepages.com/nigeriaelectricityreadinglist

t said...

naijablog: Competition in the energy sector
- a good post on naijablog, with inspiring comments. Enjoy!

t said...

A Nigerian describes the problem as he sees it. READ!

umc said...

I see many alternative solutions on this Blog to the electricity problem and I believe many others do.-IPP(Independent Power Projects).
Right. Action is what's got to be taken; Afterall, the problem is a business opportunity.

t said...

Live in California and/or want to work at the frontiers of electricity, CAISO hires engineers, social scientists, etc
http://www.caiso.com

Thanks for the positivity, umc. The most direct business opportunities would be supplying something or another to provide power. For this, think small units, not federal government, because of the reputation for mismanagement.
There's a lot more, however, that can be done, and that can work.

t said...

ELECTRICITY: A long wait for light
By Dino Mahtani

Published: July 12 2007 10:49 | Last updated: July 12 2007 10:49

Sitting in his dark workshop in the eastern city of Aba amid empty diesel cans, Hyginius Ihunnia, a cobbler, equates power failure with government failure. Like many manufacturers, large and small, Mr Ihunnia’s business has been crippled by a lack of electricity and the cost of running his own generator.

The country is almost as starved of electricity provision as it was when military rule ended in 1999. One government estimate this year put power generation capacity at the equivalent of one light bulb per Nigerian.

According to a government report, installed capacity is 4,500MW, one-eighth that of South Africa and one-fifth that of Egypt, the two other economic powerhouses of Africa with populations far smaller than Nigeria’s. Actual generation in May was 3,500MW. Earlier in the year generation dipped below 2,000MW, lower than levels in 1999, with a main gas pipeline in the Niger Delta region vandalised by restive communities causing a big gas supply problem for a main power plant.

In such catastrophic conditions, places such as Lagos, the country’s commercial capital, reverberate permanently with the groan of private diesel-run generators straining to stay on 24 hours a day. But despite the blame heaped on the authorities, the problem of power generation in Nigeria stretches back decades.

When Olusegun Obasanjo, Nigeria’s last president, took over in 1999 he was faced with a power sector that had almost bled to death by years of underinvestment, mismanagement and corruption.

Over the years, his government sacked layer upon layer of staff from the National Electric Power Authority (Nepa), but failed to tackle the root causes of corruption and failure. “I did not know how deep the rot was,” Mr Obasanjo admitted to the FT in April.

Mr Obasanjo’s ambitions to boost generation to 10,000MW were never achieved during his eight-year rule, although some repair work was done in his first five or six years, nudging up generation capacity slightly.

Since 2004, a government plan has been rolled out, with more than $2.5bn of oil revenue windfalls already committed to beefing up generation capacity and distribution networks.

Seventeen power plants are being built across the country and independent power providers have been licensed to build more stations in an ambitious plan that envisages generation boosted to 24,400MW by the end of 2010.

In 2005 Nepa was unbundled into 17 generation and distribution companies and a transmission company ready for privatisation under the umbrella of the newly named Power Holding Company of Nigeria (PHCN).

But Nigerians are still waiting impatiently for the lights to turn on. For many, Nepa, known in one derisive form as “Never Expect Power Always”, has been turned into PHCN, “Problem Has Changed Name”.

Since Umaru Yar’Adua was sworn in as president in May he has put power sector reform at the top of his agenda. During his campaign he promised power generation would be boosted to 10,000MW by the end of the year.

But Joseph Makoju, presidential adviser on the power sector, says ambitions have had to be scaled back and more work needs to be done to ensure the private sector can take up assets without being ambushed by hidden liabilities.

Mr Makoju has already shifted back this year’s 10,000MW target to somewhere nearer 8,600MW. “There are issues in terms of our capacity to manage projects of such magnitude. We are constantly facing challenges we don’t expect,” he says.

A presidential committee report on power supply notes that delaying factors include such problems as kidnap threats to technical staff on the ground, delays in payments to contractors, gas supply issues and lengthy due diligence procedures. It also notes that funds for the continuous operation of state power infrastructure have been “compromised” during the Nepa unbundling process.

Private sector operators say that, if the government truly wants to meet its 24,400MW target by the end of 2010, greater efforts will have to be put into diversifying gas supply and completing a much-needed regulation framework to ensure that the interests of the private sector operators do not become divorced from the national agenda.

Many of the assets up for privatisation do not have adequate cashflow models to allow private companies to assess liabilities.

The government also needs to lay down a tariff model that would allow it to wind down subsidies to private companies taking on initially unprofitable assets, while balancing its need to avoid forcing a price shock on consumers. “Without adequately addressing these issues, we seem to be going ahead and inviting more investors,” says Mr Makoju. “As a result, all the investors are asking for excess securitisation, such as sovereign government bonds.”

Copyright The Financial Times Limited 2007

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