The former Minister of Power, Professor Bart Nnaji, has called on the federal government to resume the signing of power purchase agreements (PPAs) with private sector investors to ramp up Nigeriaโs electricity generation.
Nigeria currently has about 13,000-megawatt nameplate capacity but generates only about 5,000MW due to a number of factors, including insufficient natural gas availability for the countryโs gas-fired plants, which account for 80% of national grid electricity.
Nnaji, who is the founder and chairman of Geometric Power, Nigeriaโs foremost integrated electricity group, told a forum of professionals involved in the electricity value chain, including bankers and lawyers, at a large meeting organised by the Udo Udoma and Belo-Osagie law firm in Lagos today that without the resumption of the PPAs, โit will be very difficult for any investor to provide money for grid power generationโ.
He said that the PPAs โprovide comfort to investorsโ, citing the example of the 450MW Azura power plant in Edo State which cost about $900m to build.
โCreditors,โ he noted, โwere able to provide the long-term funds because of the partial risk guarantee (PRG) provided in 2012โ when he was the power minister under President Goodluck Jonathan.
According to Nnaji, no new plants have been built by the private sector since the suspension of the PPA in 2015.
ExxonMobil and General Electric of the United States, which has been trying to develop a thermal plant of 1,000MW in Aba in partnership with Geometric Power have since paused action on the projects after spending hundreds of millions of dollars.
It costs between $1.3m and $1.5m to build just a one-megawatt gas plant, according to Cliff Eneh, a former engineer with Texas Power and Light in the United States who is now an energy consultant in Lagos.
โThe Federal Government and various state governmentsโ, said Eneh, also a former manager with the defunct National Electric Power of Nigeria (PHCN), โdon’t have enough resources to close the well over 50,000MW gap in the countryโ.
Egypt and South Africa, which are among Africaโs largest economies, generate 58,000MW each, but South Africa has since 2007 been experiencing load shedding because of inadequate power availability.
โThis shows that 58,000MW canโt be enough for usโ, Eneh asserted, supporting Nnajiโs call for the reinstatement of PPAs.
Nnaji also told the gathering about the โgreat urgency to address the paralysing supply gas crisis bedevilling the country.
โA situation where Nigeria, the worldโs 9th largest gas country, canโt provide gas for domestic consumptionโ, he continued, โisn’t justifiableโ.
He revealed that his 188MW Geometric Power Plant, commissioned last February 26 by Vice President Kashim Shettima on behalf of President Bola Tinubu, has โbeen grappling with gas scarcity, sometimes staying weeks without suppliesโ, despite building a 27-kilometre gas pipeline from the plantโs location in the Osisioma Industrial Layout in Aba to Owaza in Ukwa West Local Government Area of Abia State.
The former distinguished engineering professor in the United States observed that the challenges in the power sector โare, to a large extent, a reflection of the broader economic crisis in Nigeriaโ, advising the political class to embrace patriotism to solve the problems.
โWhen I was the Minister of Science and Technology in 1993โ, he recalled, โall government officials and government establishments were using locally assembled Peugeot vehicles which provided thousands of citizens and businesses with direct and indirect jobs.
Government officials in the United States, France, the UK, Italy, Germany, and other places use only vehicles manufactured in their countries.
โAt Geometric Power, we made it a policy to patronize only locally produced vehicles like Innoson and Peugeot, just as we use Cutix and Coleman wires and cables made in Nnewi, Anambra State, and Arepo, Ogun State, respectivelyโ.
Participants in the forum on Nigeria’s electricity value chain included Dafe Akpeneye, a commissioner with the Nigeria Electricity Regulatory Commission (NERC); Kola Adesina, the chief executive of Sahara Energy; and Nicholas Okafor, head of the energy team at the Udo Udoma and Belo-Osagie law firm.