The current privatisation exercise of the power sector on completion will usher in increased efficiency, transparency and ultimately customer satisfaction, Michael Lakota, managing director of Siemens Nigeria has said.
He said he believe Nigeria is on the right path towards achieving stable power supply with the ongoing privatisation, adding that 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.”
He said while privatisation is good, it is not the only answer to Nigeria’s energy challenges. He said there is a need to create an enabling environment for private sector investments in generation, transmission and distribution capacities, adding that “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, he stated need to be completed and the plants need to have access to gas.
The Siemens boss said currently, Nigeria has 8,000MW installed generation capacity; but 60% of this capacity is not available due to lack of maintenance. “A proper service and maintenance culture will ensure that the maximum possible output is gotten from the existing assets.” I believe the industry regulator will develop a framework to monitor this in the privatized regime.”
Going forward, he said 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, he said the Ministry of Power needs to further improve their inter-ministry coordination with the Ministry of Petroleum and also NNPC.
He also advised investors on finding the right partners.”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 one 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.
“Therefore, a track record of success story in Nigeria is very important. I am happy to give you example of Siemens’ success story at the Geregu Power Plant, Phase II in Kogi state; currently under construction. When completed, Geregu II will add about 430MW to the grid.”
He said further, “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 excellence, meaning that is no fatalities, no major injuries. This is 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 are about a 1,000 people working night and day to bring the power to the grid,” he said.