Can we meet you?
My name is Michael Lakota. I studied Economics and have been working in the Corporate Sustainability Department of Siemens AG for some years; developing solutions which address the global challenges presented by Megatrends – demographic change, urbanisation, climate change and globalisation – which are affecting and defining lives and economies throughout the world. In January this year, I assumed a new role as the managing director of Siemens Limited Nigeria.
How committed is your company to the country?
Siemens is deeply committed to the development of the electricity sector in Nigeria; the Company has been delivering solutions across the entire energy value chain towards Nigeria’s sustainable infrastructure development and economic prosperity. Siemens built the 434MW Geregu I Power Plant and has also worked with several manufacturing companies to build captive power plants across the country. Geregu I Power plant is the best-in-class of the PHCN generating plant; delivered on time and on budget with no fatalities. Siemens is currently building the Geregu Phase II project; expected to be commissioned by mid-2013.
In January 2013, as part of efforts towards strengthening its investments and market penetration in Nigeria, Michael Lakota was announced as the new managing director.
When you were asked to come to Nigeria what crossed your mind?
I was excited about my posting to Nigeria! Nigeria is a very strategic market for Siemens and we are keen to support the development of Nigeria’s economy. I see a lot of opportunities in Nigeria, especially across the key sectors of energy, industry, healthcare and infrastructure development. Siemens is uniquely positioned to provide answers to Nigeria’s challenges across these sectors. We are committed to partnering with the government and the private sector towards deploying the innovative solutions, which Siemens is well known for in Nigeria.
What is your mission statement as the Chief Executive Officer of Siemens Nigeria?
Siemens is “In Nigeria for Nigeria”. This is not just a nice slogan for Siemens; it defines how we do business in Nigeria. We are in Nigeria to make a positive impact on the economy; to provide sustainable solutions to Nigeria’s challenges across the energy, industry, infrastructure and healthcare sectors and not just here for short term profits. A key pillar of our strategy is local human capital development. Siemens Limited Nigeria recognises the importance of knowledge and technology transfer and will therefore proactively seek out strategic opportunities to facilitate the growth of local human capital and local value add in the course of running its business.
How can the country achieve stable power supply?
I believe Nigeria is on the right path towards achieving stable power supply with the ongoing privatisation. The government and industry stakeholders just need to ensure that the process is followed through to the end. The power sector in Nigeria has come a long way; the landscape is changing with more private sector involvement and investments. With the completion of the ongoing privatisation, there will be increased efficiency, transparency and ultimately customer satisfaction. In a few years, I believe that we will begin to see the benefits to the entire population, including residential and non-residential electricity customers. Overall, the wellbeing and quality of life of all Nigerians will improve, as a result of extended access to a more reliable supply of electricity at improved quality and reduced cost.
Is Siemens in partnership with any of the investor that has bought the power distribution companies?
Yes, Siemens is actively involved in the ongoing privatisation programme. We are technical partners to a consortium which has been announced as preferred bidder for one of the distribution companies. We are also in advanced discussions with some of the buyers of the Gencos. We are committed to bringing our global expertise, experience and technology for running generating and distribution assets to bear in Nigeria. We are very excited about being a part of the solution to the challenges in the Nigerian power sector.
What would you do if you are made the Power Minister in Nigeria?
First of all, I will focus on finalising the ongoing privatisation process. I believe that while privatisation is good, it is not the only answer to Nigeria’s energy challenges. There is a need to create an enabling environment for private sector investments in generation, transmission and distribution capacities. I will strongly entrench a “maintenance culture” as this is the only way we can ensure that the industry investments are run sustainably. The ongoing NIPP projects need to be completed and the plants need to have access to gas.
Going forward, gas availability for power generation will be a key determining factor for the development of the sector. Without gas, you cannot produce power; no one will be willing to invest in a power plant without an assurance for gas supply. Access to gas could potentially limit the volume of investments in the sector over the next few years. To address this, the Ministry of Power needs to further improve their inter-ministry coordination with the Ministry of Petroleum and also NNPC.
My advice to investors is this: It is important to find the right partner. Find an experienced partner who fully understands the Nigerian environment, the best technology suited for the market and who also has a proven track record of success in this market. There is no market quite like Nigeria, there are unique challenges faced by project developers.
In 2006, Siemens built Geregu Phase I with a capacity of 414 MW. The ongoing Geregu Phase II project is on time, on budget and of perfect operational excellent, meaning that is no fatalities, no major injuries. This something we are very much proud of. This is a success story that we always communicate to our potential investors. I would encourage the potential investors to go to Geregu and Ajaokuta and meet with our team of engineers. There about a 1,000 people working night and day to bring the power to the grid.
How does your company intend to achieve the 10,000MW MOU signed with the Federal Government?
In April 2012, Siemens signed an MOU with the Federal Government to build 10,000MW of electricity generating 2020. This is very ambitious but it is achievable. We have the full support of our management towards investing in Nigeria towards the achievement of this target. We are speaking with various project developers and we are also in close discussions with the Ministry of Power.
Before the end of this year, we expect to record the first power project to be implemented within the framework of the MOU.
What other programmes do you have?
We are passionate about the development of renewable energies. I believe that in some parts of Nigeria, especially the Northern part of the country, renewable energy would fit -in those places. I believe with a proper maintenance, investment, and business plans this would be a reality. We are committed to partnering with project developers to optimise the country’s renewable energy sources.
In what other areas of the economy are you involved in the country?
The energy sector is very important for us in Nigeria, as we see how we can support the country towards achieving its economic objectives. A lot depends on the success of Nigeria’s energy sector from manufacturing to mining to communication to healthcare.
However, Siemens is uniquely positioned to deliver solutions across four sectors – energy, healthcare, industry and infrastructure and cities sectors. Our energy portfolio covers integrated solutions covering oil and gas (upstream, midstream and downstream); fossil power generation, renewable energy and power transmission and distribution. Our healthcare portfolio covers basic healthcare solutions and a wide range of diagnostic and therapy solutions. Industry portfolio covers automation and drive technologies, while infrastructure and cities covers rail systems, mobility and logistics, low and medium voltage, smart grid and building technologies.
We see a lot of potentials for growth in the Industry sector because of the dynamic nature of the Nigerian market. With about 160 million people in this country; there is an extremely high demand of food and beverage products. So investment has to come in this sector. I strongly believe in the food and beverages sector.
We also see significant opportunities in the infrastructure sector with rails, airport and city solutions. This is a very dynamic country with a rapidly growing population of young people. I read about astonishing number of about 20,000 moving to Lagos every day. So mega cities like Lagos need sustainable infrastructure development otherwise there is a risk that the overstretched infrastructure will one day shut down with significant cost to individuals, businesses and the country at large. The 20,000 people coming everyday need water, electricity, transport. In our city portfolio we provide metros, trains, light vehicles, electric power for surveillance operations.