Amuwo-Odofin, Ilupeju clusters to get modular power in 4 months

Amuwo-Odofin, Ilupeju and Henry Carr (Ikeja) industrial clusters in Lagos will get modular power supply in four to six months from private investors who have been engaged by the Manufacturers Association of Nigeria (MAN) to provide electricity, Ibrahim Usman, board chairman of the Manufacturers Power Development Company Limited, told Real Sector Watch.

Arrangements have been concluded with three undisclosed companies to supply up to 10 megawatts to each of the industrial clusters, while a memorandum of understanding will be signed in fewer than two weeks, Usman disclosed.

The power project is structured on a build-own-operate, which is a system where a private company is granted the right to develop, finance, design, build, own, operate, and maintain a project.

Manufacturers in the industrial clusters will sign an agreement with private power suppliers which will mandate them to pay for the electricity they consume, Usman said.

“We are not going to deploy too much. It will be in a modular form, in small units, but there will be efficiency, such that if there is any servicing going on, manufacturers will still have power. There will be power for 24 hours,” he said.

He said this will be replicated in other industrial clusters in the Eastern Nigeria, Ibadan, and Kano, among others.

Nigerian manufacturers floated Power Development Company Limited in the first quarter of 2016 to cushion the harsh impact of poor electricity supply in industrial zones.

Local manufacturers devote between 30 and 40 per cent of their expenditure to energy. While multinationals and large companies have expensive gas and coal-fired plants, the majority of medium, small and micro players use diesel and fuel to power generators.

Nigerian manufacturers spent N59 billion on gas, diesel and inverters in 2015, according to MAN. This represents 135.28 percent spike from N25 billion spent by manufacturers on alternative power sources in 2014.

Power is currently in the hands of the private sector players in Nigeria, but experts say they did not do proper due diligence before taking over the electricity sector.

Usman said his team are talking with a total number of 12 power firms, stressing that the project will cost millions of dollars for the private sector electricity suppliers.

 A modular power supply provides connectors at the power supply end, allowing unused cables to be detached from the power supply, whereas a conventional design has numerous cables permanently connected to the power supply, Wikipedia says.