Dara Osaloni, a senior country manager at Impala Energy, a firm that provides power solution for industries in Nigeria and who have previously worked at Cummins and GE Electric, speaks to ISAAC ANYAOGU on why company is focusing on helping businesses to compete by cutting down their energy costs.
Tell us a little about your foray into providing IPP solutions in Nigeria’s power sector?
Power used to be like B2B selling of generators to companies and industries in the past, NEPA was a little bit stable then. As the power sector in Nigeria began to deteriorate, then we saw opportunities to provide solutions for industries and private companies.
So we thought that bringing the idea of IPP solution into the market whereby we have investors who bring their money, put up the power plants and sell power to entities that require the power, including industries will be profitable.
What are some of your projects in Nigeria?
With Impala, we have about 10 MW cut across different manufacturers in Nigeria for instance, we are working with APM Terminals in Apapa to cut down their diesel consumption. We are installing 2MW Gas fired Generators to add to what they had in the past. Diesel Generators was their major power source in the past.
Impala is fairly new in Nigeria. They have invested in a gas plant model and gas compression station in Delta state, the largest in Nigeria and West Africa. It means the company seeks to tie into the idea of the Federal Government of gas to power, that is conversion of natural gas to power.
We are like one stop shop for any customer, we are giving you power not just the engine. We give you the engine and the gas and all you need is to see power and pay for it on monthly basis.
How are these projects funded?
Our projects are funded by us since we have our own balance sheet. Funding has been a major challenge in the power sector. For instance we are in the process of building another 30MW and we are funding the project apart from installation/EPC it is about 17.3million euros. This is to show we have the financial capacity to fund our projects ourselves
Although, we are still negotiating so you have an idea of the cost implications of Power generation.
If I put up a powerplant and power the whole of Ikeja and the Disco is paying me based on power consumed and some people are stealing the Energy, how will the Disco generate enough revenue to pay? We don’t look at doing this type of business at this time.
We are focused on dealing with commercial and industrial customers because it can be tied to their operating cost.
How does Impala differ from other companies providing power for industries?
The major advantage we have is we have a pool of funds which we can pull money from to do this project whereas some people still need to go to the bank and the bureaucracies involved may delay the project. Also we have our own Gas to power all our powerplants of any size, but other IPP companies engage third parties for their Gas requirements or they make it the end user responsibility to buy the Gas while they supply only the generators.
We have access to funds that support up to 100MW project, so you can see that we have access to huge capital base.
Where do you get your funding?
Impala is a baby of AP Moller Capital, a company that is pulling resources to help Africa. AP Moller developed a fund, some for logistics and other core businesses and now power.
Utility companies in Nigeria have challenges with collections, do you experience that?
We don’t deal with utility consumers, as such we don’t envisage such challenges. For now we are dealing with the commercial sector, and it is exciting, they are profit making organsations and every month they have projects and targets and when they sell their goods they pay. But for public utilities, it is not so this is why we are not going in that direction.
Where do you see the role of Impala in solving Nigeria’s power sector?
If we solve power for industrial and commercial sector, they will reduce their costs and will lead to lower cost of production leading to cheaper goods and services to consumers.
More Energy will be free for utility consumers since we are supplying power to the commercial consumers. Demand on the grid will be reduced and be more dedicated to utility consumers as what we offer is off-grid solution.
We are like a bridge between the GenCos, DisCos and focused customers – power sector in Nigeria is so cumbersome that you need to know where to play.