Former Minister of Power, Prof Barth Nnaji, is the founder of Geometric Power Limited, the first indigenously owned private sector Power Company in Nigeria. In conjunction with Renatech, the company, in 2001, designed and built an emergency power plant in Abuja, supplying electricity to the Nigerian Electric Power Authority. It has also completed a $450 million Integrated Power Project (IPP) in Aba, which would be officially commissioned by President Goodluck Jonathan on October 3. In this interview with Abuja Bureau Chief, Madu Onuorah, and Emeka Anuforo, Nnaji speaks on the Aba Power Project, his firm’s partnership with GE to generate another 1000MWs, the cabals in the power sector and how to resolve the challenges of gas supply. Excerpts:

How do you feel, especially now that this dream has eventually materialised?

We are very proud that the Aba Power Project is finally coming to the completion stage. We have laboured in the trenches for years and have gone through many challenges, especially during the period of global financial meltdown’ yet, we completed the project. Even though we broke the ground in November of 2007, two things need to be noted: One is that we are still faster than a number of the National Integrated Power Projects. Two is that we are still the first independent power company to complete, except, of course, the oil companies and government projects. We are very proud of that.

What were the specific teething challenges; are there new challenges, especially now that the project is on stream?

You have to understand that, when we started the project, the country did not really have any reform programme for the power sector; the programme wasn’t really in full stream. The fact that we started this project at that time meant that the regulatory regime wasn’t in place.

Now, we talk about the Bulk Trader — that is an organisation of government that could sign power purchase agreement creditably and with the credit support of the Federal Government. Those things were not in existence. Most of the things that we needed to make the sector work were not there.

They actually came within this government now. Indeed, we faced tremendous challenges: The banks were not lending to the power sector (only a couple of them had the courage and the vision to do it at the time). One can understand, because the whole environment was opaque.

Again, policies of government, at a time, had flip-flops. For example, the Nigerian Electricity Regulatory Commission was suspended in whole at a time without the people who operated government recognising that it would hurt investment. And so, investors that we had lined up began to backtrack once they saw that the regulator was suspended. What it meant is that you could not count on government, because it wasn’t enshrined in any regulatory framework. There are many issues at the time.

What about the cooperation you had with the then Ministry of Power, government agencies and establishments?

We had a good relationship with the government, which led to the agreement. The government structure supported it.

The President at that time, the ministry of power, the then NEPA were all in support to do the agreement. So, it was a very well thought out agreement.

Even the World Bank supported the Federal Government in devising the payment that would come from the ring fence. It was a leasing of Aba Ring fence, that is, the ring fencing of Aba and leasing the ring fence to Aba Power. So, Aba Power would annually pay a fee to the Federal Government.

But determining what that fee would be required a lot of work. They spent almost nine months developing it with the cooperation of the World Bank, because there was nothing there.

You can see when we talk about challenges; we had challenges of no precedence. Everything we were doing had to be with setting precedence. For example, asset valuation had to be done in Aba. We have done asset for the privatization now. But it had to be done at that time for Aba.

Interestingly, the values came to be about the same now, which means that it was well done. That value was used by the World Bank to do the calculation of fee to be paid to the government. There was challenge associated with fuel supply agreement, because the fuel was being supplied to PHCN companies at about 10 cents per unit and it was clear that there was no private company that would be able to get fuel to generate electricity at that rate, because the oil companies just won’t supply.

So, we had to now go for something that amounted to more than 10 times the price that PHCN was paying. That became the very first commercial agreement in the sector, very first commercial agreement, and that first commercial agreement helped to show how gas supply agreement would work. It took us two years to negotiate this. It was an agreement between NNPC, Shell, Agip and Total ‘— a joint venture of those four.

We also tried to get transportation agreement. If you are getting money from a bank, you cannot go on what is called best endeavour. That is if we are able to, we give it to you. If we are not, you don’t get. You cannot say electricity should be on best endeavour. Electricity should be stable. You must deliver reliable electricity to the people. We had to build our own pipeline. We built a 27 Kilometer pipeline. We saw that Aba infrastructure, even though we were leasing PHCN infrastructure, that there were only three sub stations. And that even if you had all the power for Aba, that you would not be able to get the power to the people, because the substations limited the amount of power you could sell to the people.

We had to build four brand new sub-stations, in addition to the existing ones, and refurbished the three existing ones. We also had to do all of those.

We now had to build new lines, 33KV lines. There is no place in Nigeria you would find the sort of poles that we have in Aba. We built them to last quite a longer time. These are some of the things we have had to do.

What then is the relationship between the distribution company, the one for the South East and Aba?

The relationship is a neighbour-to-neighbour one. Aba is ring-fenced and the Enugu Electricity Distribution Company is there. If you look at the Enugu Distribution Company, including Aba, you would have 14 units. Aba has two business units. This leaves the Enugu Electricity Distribution Company with the remaining 12. If you are going towards Port Harcourt from Umuahia, the boundary of Umuahia and Aba is where Aba Electricity Distribution Company starts, all the way to the boundary of Abia State and Port Harcourt. The same way if you are going from Aba to Owerri, by Owerrenta, is where the boundary is.

Now that this experiment has worked and the Aba Power Project is now on-stream, would a Nigerian have this confidence that, one day, in the nearest future, he or she would have uninterrupted power?

I am confident that we can achieve reliable electricity in certain areas soon. It is imminent that we would have reliable electricity for the entire metropolis of Aba. When I say metropolis, I mean the city and the environment.

Similarly, it can be done in Ikeja. You can also have it in Kano. You can do it in Onitsha and it can be done in Nnewi.

You can pick out certain areas that can stimulate the economy of Nigeria and channel power there, either by building captive power for that particular area within the ring fence. By the way, when you say building power for an area, you don’t actually have to build it in there. You can build the power plant and send the power to that location. It is dedicated power. It is about dedicated power for a particular area. So, this can happen in a number of places, and it is almost like if you make a circle and you begin to have drops of water. The water would be spreading. That is what an Aba kind of thing does.

In various places, it will begin to spread; reliable electricity will begin to spread until the entire place is covered, and it won’t take so long.

With the privatisation of the distribution companies, each one should have capacity to do it, but it has to have investment capacity to actually improve electricity distribution within the environment. I would say, if you come to Lagos, the distribution company that owns Agbara Estate could simply carve out that area and say it is an economic area, and that it is going to ensure that power would be available 24/7. They can do it.

Plz, read the Remaining parts of the Educative Interview:

http://othersguardianwww.ngrguardiannews.com/business-news/132144-viable-gas-agreements-essential-for-success-of-ipps-says-nnaji

I can't wait....

Afam4eva: I can't wait....

you will grow white hair

GEJ till '19

Great job...

Make I see if you go allow your power business fail!!!
Good developments. I hate seeing government owned plants, refineries, companies, industries!!!
Nigerians, please let us invest in business and create many more job opportunities.
Let's not wait for our government!!!
Make I call my guy tell am job dey for Aba now sef#

Front page striength, notime 6th 4 my mind

More gress to your elbow sir

nice time: Front page striength, notime 6th 4 my mind

kai!!!

nice one. fp tins,, light tins for umu aba

God bless the south east!

Small small some of us go dey plan to go back by force! Even if we no earn so much with too much wahala, the little one receives at home shall be ok with less stress and traffic and wahala and frustration and troubles and agony and nnagbatisism!

Good news. How many Megawatts would it generate? Journalism in Nigeria ehn, see junk questions they were asking.

By the way, where is that useless Gbawe, saying Nigeria is moving backwards and Jonathan is confused, just shows how illogical, emotion-driven APC goons are

great job!

Waiting for #TeamClueless to come cook their beef here


#GEJ2015
#GodBless9ja
#GodBlessSE
#GodBlessPDP
#GodBlessAPC
#GodBlessHonestPeople


*i dey church, brb

patmaine: nice one. fp tins,, light tins for umu aba

Won't the power from the plant be transmitted to National grid and redistributed or isn't that how its done?

Afam4eva: I can't wait....

Me too. I live very close to that power plant, N30 and 5 minutes drive away. It should mean fairly regular power supply.

Good One!!
We will get there someday.
But we should learn to put good Governance & Development before politics in this country.
We play politics with everything in Nigeria Government.
God bless Nigeria.

If you look at the Enugu Distribution Company, including Aba, you would have 14 units. Aba has two business units. This leaves the Enugu Electricity Distribution Company with the remaining 12.

Little wonder the Enugu disco has become a tussle and hasn't left the news in the past week.

passion007:
Little wonder the Enugu disco has become a tussle and hasn't left the news in the past week.

unfortunately for nnaji interstate has finally paid the remaining amt.

Some day cars will run on water. Gej all the way

wow i am excited by this news, gej we are waiting to welcome you to aba come october 3rd but tell ur boy t.a. orji to sit up.

asha 80: unfortunately for nnaji interstate has finally paid the remaining amt.

It's well. At all at all, na im bad pass. Lol.
Uninterrupted power should have long been achieved if our nation didn't have a thing for snail speed and needless politicking.

To God be the glory,
those who sow in tears shall reap with joy.
The message here to believers in the new Nigeria;
Dont give up on ur CONVINCED dreams no matter the opposition and challenge

End time things jor ....heading to aba now

how many times will this thing be commissioned? they keep commissioning these things and nothing happens afterwards.

free2ryhme:

you will grow white hair

Stop been eternally pessimistic in the midst of glaring evidences...it kills

Good job

Obiagelli: Good news, but will it be connected to the national grid, and how many megawatts is the plant generating?

It's 141MW for aba metropolis and environs only.