₦airaland Forum

"I started a company that is working to provide solar electricity to businesses and families at zero upfront cost,” Ezeozue says. The company, SolarKobo, was recently funded by a seed grant from MIT’s Legatum Center for Development and Entrepreneurship, where Ezeozue is a fellow.

“Solar resources are abundantly available in Nigeria. The adoption of solar is only hindered by the high upfront cost. SolarKobo will enable access to solar energy by bearing this high upfront cost and charging a more palatable monthly fee.”

Though he admits that Nigeria’s electricity supply is also challenged by transmission and distribution, he says SolarKobo will bypass those transmission and distribution issues by putting the electricity utility on customers’ roofs.

“Nigeria has plenty of solar energy available. For as low as $25 a month, we can make this resource available to those who are interested,” Ezeozue adds.

...interesting

Renewable Energy is the future for power generation and this includes Solar, Wind, Biodiesel etc, but it is not yet here and not yet now, especially for us at the moment.

For an oil producing country like Nigeria with abundant gas reserves, the best short to medium and even arguably initial long term energy solution lies in gas fired power plants. The initial upfront cost associated with solar is still quite prohibitive relative to our best option which is gas. In the meantime though, we can start to invest in R& D for solar and other renewable energy sources. Its not rocket science that in another 5 years or so the cost of solar systems for example would have halved again from what they are today and also be more efficient making today's solar systems obsolete. So why the rush? When we have a much more viable, reliable and cost effective alternative at the moment.

OP the cheapest solar system you have on offer is about N850k for 1kw... that is a very expensive proposition, also mind you that this is NOT adequate for a standard middle class family in Nigeria with appliances like iron, microwave, electric kettle, AC, pumping machine etc. A 1kw power system that would only provide power for bulbs, fan, tv at over 800k does not really cut it. Moreover they would still need to rely on a secondary power source either from PHCN or generators to power their other appliances. At the moment solar power is more of a novelty.

Another worthwhile consideration, lets assume that we have 1 million households in Nigeria who can afford to go for the basic solar system at 850k each, that is N850 billion (about 5.5 billion dollars). $5.5 billion today would give us an additional approx 5,000 MW of gas fired grid electric power compared to 1,000 MW that the combined solar system would generate. At this stage of our development we are better off with 5,000 MW of grid electricty than 1,000 MW of minute distributed solar power for the same initial cost outlay, even though we would have ongoing cost with the grid power, the increased productivity and multiplier effect these extra 4,000 MW would generate for the economy would more that outweigh many many fold whatever cost savings we would get from a 1,000 MW solar system over 25 years. Yes it may take 12-24 months to put in place but still a better option in my opinion.

Also you have a price/cost comparism on your website, but you are not comparing like with like. You are comparing the cost of a 2 kw solar system with a 5kva generator over 5 years, a valid comparism would have been comparing your 4kw solar system with a 5kva generator.

Interesting... Are you saying if you invest 500k you get back 750k in 6 weeks?

You don't suspend an airlines license because of a crash, the best you can do is ground the particular aircraft type in their fleet and do safety and technical checks on them, while you conduct an investigation. Mind you in similar cases worldwide these checks were conducted in less than a couple of weeks and these same aircraft types resumed operations pronto!

There is virtually no airliine in the world that has not experienced a mishap, so suspension immediately is only unless you have immediately irrefutable evidence of incompetence or negligence on the part of the airliine in question. If a BA plane were to crash tonite it won't stop those already booked to travel from lagos to london from happily boarding still...

Hmmm... This could be quite more complex than it looks. Agreed the 2 oil blocks, OPL 915 & 916, straddle a few states but with majority in Anambra. Now the next question is, where exactly within these oil blocks do these oil reservoirs lie? You may drill an oil well in the Anambra side of the oil blocks but the reservoir(s) you are tapping from may actually be predominately in Kogi, Enugu or Edo State and vice versa!!

A good example is lake Chad which is within the territories of Nigeria, Cameroun, Chad and Niger. Approximately 20-25% of lake Chad is in Nigerian territory, but I can sit in the Nigerian section and put a pump into the lake and drain out all the water and claim I got it from my own side! This is obviously because being a liquid virtually all the water in the lake, including those in other countries, would flow towards the Nigerian side as am pumping water out through the Nigerian side and thus give me access to the whole water in Lake Chad! The same scenario plays out with underground oil reservoirs and by their nature being deep underground the exact and precise geographical layout could be difficult to determine within the oil block itself except for where the oil rig or well head is situated.

Another factor could be that the licensee, explorer and producer of these oil blocks, Orient, is owned by Anambra state and its indigenes who are also big stakeholders in the crude oil itself. Its similar to the River state govt owning Shell who are the major oil producing company in the Niger Delta. The only logical solution would be proper, diligent and independent seismic, geographical and other scientific evaluation examination to determine which states/communities these oil/gas reservoirs lie within these 2 blocks and to what extent.

I do highly commend Orient and Anambra state for the bold initiatives and steps they took that led to this discovery and ultimately as the licensee/operator/producer of these oil blocks would still benefit very lucratively same way shell, Chevron are reaping rewards from such actions. Additionally Anambra state would still also benefit from 13% derivation from whatever production is determined to have come from its land.

Won't be surprised if this story is true. Abati is a bit too docile in my opinion. Any govt either liked or disliked needs a boisterous, shrewd, more on the tactically offensive, proactive personality to handle media affairs which Abati it seems was clearly not doing.

Its good to support your partner's business anyway you can. Selling chin-chin, jewelry, shoes or whatever in the office should not be condoned by any serious minded business in order to instill professionalism in the workplace.

Having said that, it seems to be an accepted practice in Nigeria. In this instance, if at all the chin-chin has to be sold in the office, then he should let the wife come and do it herself or employ some jobless youth to do the rounds. He is not being professional and he is sending out the wrong message to his subordinates. If his subordinates also now decide to start selling their wives akara, puff-puff or kunu in the office what would he have to say to that? How would he be able to stop them? What then would he have turned the office to?

Yes it is acceptable that fibres do cut and internet/broadband outages can occur without notice, no one is going to blame Glo for that. What is totally unacceptable is the fact that Glo has no redundant failover/backup connection in place for times like this!! Even if it means a slower connection, as least there would be some connectivity for customers while they fix the problem! What would it have cost them to have a redundant satellite or redundant secondary fibre connection agreement in place with the numerous satellite and international fibre broadband operators in the country?? This is grossly irresponsible and incompetent behaviour from Glo.

This was always a no brainer! There was no way Okonjo was going to win the world bank presidency. Btw the US, Europe and Japan they already had 54% of the votes and everyone knew where those votes were going - the US candidate! Russia did what was politically prudent in the circumstances, why support a candidate that had no chance of winning? Why she allowed herself to fall for this with the outcome glaringly obvious beats me.

This is similar to someone expecting an ACN member to become Senate President in a senate with an overwhelming majority of PDP senators!

Why is the FG issuing risk-free Tbills at 15-16% Investors would still fall over themselves to buy at 8-10%!!! If banks can get 16% for risk-free, sleep-very-soundly-at-night Tbills why would they bother lending to any sector of the economy? They are looking at a juicy spread of over 10% without having to make any effort whatsoever!

Another very important question; How does the FG fund the huge interest payments? Is it affordable and sustainable? Hell no! For OMO yes the fg needs to issue local tbills but definitely not at those ridiculous rates! For other borrowings the govt needs to issue dollar dominated bonds at around 5% or so which would still be very attractive to foreign investors considering their virtual risk-free nature. China currently has over $1 trillion dollars invested in US tbills at less than 3% returns!

This is our usual govt's upside down way of thinking and doing things which in the end hurts our economy, enriches a few including foreigners, but the bulk of Nigerians pay the price!

The panel hasn't said BA and Virgin are not guilty, but they have simple said based on the time period during which the alleged offences were committed the maximum penalty as at that time was a"cease and decease order"!

So even if they are guilty, the NCAA cannot fine them but can only issue a "cease and decease order"! The new law that allows the NCAA to fine for such infractions came into force in 2006 whereas these offences were committed btw August 2004 and March 2006 before the new law took effect.

But then again it should not end there, these guys (BA & Virgin) should be taken to the European court or a British court and charged with price fixing or collusion or overcharging as the case may be. Shell and Pfizer as 2 prominent examples were taken to court in the UK and US for compensation claims for offences committed in Nigeria when the Nigerian courts were unable to mete out adequate justice!

I believe BA and Virgin do have a case to answer, and the UK courts am sure would find them culpable in this matter as they are expected to behave responsibly and within a specified code of conduct anywhere in the world they are operating, and are answerable to the UK government authorities and courts regarding their conduct abroad and would be prosecuted as such if found wanting.

To me the whole mobile money thing, as it is at the moment, is more of a glorified money transfer service - like a localised mobile western union type operation, yes there are other added value services like paying bills etc, but that would hadly appeal to the acclaimed target market - the unbanked and financially excluded population who probably dont have that much need for that anyway! It would still have its usefullness, same as would be available if it were a robust and widespread local money transfer service that can be cashed out at the local villiage post office or other local agents.

Still a lot of work in progress in my opinion to make it a success. Too complicated at the moment for the intended target audience.

Doesn't make sense! Inec is not in a position to interpret the law the way it deems fit! The correct position Inec should have taken should have been to go back to the supreme court and ask for accelerated hearing for the interpretation of their earlier ruling as regards what the current state of affairs should be - either new primaries or what? Having pursued the case of tenure elongation to its logical conclusion, Inec now seems to be in a haste to continue what would eventually turn out to be another illegality.

The elections in Kogi state and any other Inec conducts based on the second primaries after the 5 govs should have left office is/will be in all probability declared null and void by the courts and end up been a colossal waste of scarce resources. The candidates from the 2nd primaries and consequent elections cannot benefit from the illegality of tenure elongation of the 5 sacked govs. What about those that won the 1st legitimate primaries?

In all likelihood the courts would order a fresh governorship electoral process in all 5 affected states starting with fresh primaries! As even the 1st primaries of 2011 themselves are no longer valid as they are now time barred given that the electoral act specifies a definite time frame after the primaries when the elections should have been held.

hispy99:
If they own the license and get an operator to run it, the bank still effectively owns the telecom business.  The bank has to consolidate the telecom's financials with its own, all the bank is doing is paying someone to manage it.  It's a different thing if the bank finances the license for someone else.  Once the name on the telecom license says Bank A, then Bank A own the telecom business. 

Banks in most developed countries lend to businesses/industries, they don't own them (except of course the borrower defaults), which is what  would happen if a bank directly owns the operating telecom license. I am yet to find a bank in developed country that operates this model.

They do - through SPVs. These show up on their books as Investments and investment income or similar.

hispy99:
Are banks in the business of running telecom companies?  Which well run bank have you come across anywhere in the world that operates a telecom company?  The financing part I subcribe too, but the buying of a license is a definite NO.  Nigerian banks actually financed the purchase of GSM license and subsequent network roll out in 2001.

Perhaps you want to go over what I wrote again. - The bank will own the license, but get an operator to run it. "The licenses cost $285m which they could have easily raised, it would then simply be a case of bringing in a competent operator/investor to run the business. ".

Banks in most of developed world own a good chunk of the businesses/industries in those economies, albeit indirectly. Which is why they are such behemoths and are able to declare such huge turnovers and profits, because they are directly partaking in the success of virtually all the businesses within and even outside their domain!

Nigerian banks are appallingly disgusting! They never ever have the foresight to see an opportunity and grab it by the horns. It's not about Babalakin being a bad debtor, it's about our banks stubbornly refusing to finance any project that will not make them 20-30% returns a year! - Which is an impossible return on long term projects.

Our 4 biggest banks (First Bank, UBA, Zenith, GTB) range in age from at least 20 yrs to over 100 yrs, yet the combined turnover of these 4 banks at N762 billion is almost the same as 10 yrs old MTN Nigeria's at N749 billion!! How blind are these banks? Couldn't any one of them have seen the huge potential waiting to be tapped in the telecoms industry in Nigeria and set up a telecoms company and bid for one of the licenses in 2001? The licenses cost $285m which they could have easily raised, it would then simply be a case of bringing in a competent operator/investor to run the business.

South African banks are taking over most of the major long term financing in Nigeria. Dangote liquidated all his loans with Nigerian banks and moved the entire facility to South African banks at better rates and longer tenors. Believe you me, the South African banks would give Babalakin the money he is looking for, and they would be smiling back to South Africa every year with their repatriated interest income that could have easily stayed within the banking system/economy in Nigeria, but for the mindboggling greed of our banks!

Preferential Policies

1. Complete tax holiday from all Federal, State and Local Governments rates, taxes, Custom Duties and Levies;

2. One-stop approval for all permits, Operating License and Incorporation Papers;

3. Duty-Free and Tax-Free importation of raw materials and components for goods destined for re-export;

4. Permission to sell 100% of manufactured assembled of imported goods into the domestic Nigeria market. When selling into the domestic market, the amount of import duty on goods manufactured in the Free Trade Zone is calculated only on the basis of the value of the raw materials or components used in assembly, not on the finished products;

5. 100% foreign ownership of investments;

6. 100% repatriation of capital, profits and dividends to the country of origin;

7. Waiver of all import and export License;

8. Waiver on all expatriate quotas for companies operating in the zones;

9. Prohibition of strikes and lockouts for the first 10 years of operation of a free zone.

http://www.lfzdc.com/E-jieshao.asp?id=1

I really don't get what a lot of people here are saying! If the North West region where Buhari hails from had never produced the president, meanwhile most of the nations revenue comes from their region, what percentage of votes would have gone to a NW candidate in the NW and neighbouring regions??
Let's not also forget that the PDP has been firmly on the ground as the ruling party in majority of the Northern states for 12 years as was seen by the results of the NASS results. All that support base and vested interest in the PDP won't disappear overnight because of Buhari!

I really don't get what a lot of people here are saying! If the North West region where Buhari hails from had never produced the president, meanwhile most of the nations revenue comes from their region, what percentage of votes would have gone to a NW candidate in the NW and neighbouring regions??
Let's not also forget that the PDP has been firmly on the ground as the ruling party in majority of the Northern states for 12 years as was seen by the results of the NASS results. All that support base and vested interest in the PDP won't disappear overnight because of Buhari!

This is complete incompetence!! The materials should have been ready at least a week before the elections, with Jega or someone very high up in Inec going to physically inspect them - then all that would have remained was delivery! The excuse of inability to get flights is rubbish, the materials were not printed and ready on time!

Hmmmmm. . . Jonathan what happened here?? I suspect someone mischievously slipped a few shots of Whiskey into his tea! Was quite uncalled for, hopefully he will wave the olive branch shortly.

Soludo did well with the consolidation, but subsequently he took his eyes off the ball and was lacking in his post-consolidation oversight and regulatory functions. In as much as he was responding to Aganga, I suspect he would also get a response from Sanusi as well.

Bawss1:
YES! It is not compulsory that she speaks in public. Why should she disgrace the country like that.

So since it is eloquent and articulate people who have brought the world to its knees we should now hail the mediocre and terrible public speakers as the new messiahs? A failure of logic I tell you if we reason that way.

It is pitiful that one tries to defend what is apparently an embarrassing condition, the woman should stay away from microphones or if that is unavoidable (which it is not) get first rate teachers to school her in the art of public speaking.

She is speaking the way quite a few Nigerians even the educated ones speak. Listen to any Nigerian news channel for a few hours and you would come across a lot of instances of educated Nigerians speaking like that. Nothing at all disgraceful with the way she read her speech.

The second point was to point out that being eloquent and articulate (in English) does not necessarily translate to one having a constructive disposition/intent nor is it a yardstick for making an informed decision about someone's abilities. This is not about being a messiah or not, the more important thing is for your thinking processes and deeds to be 'eloquent' and 'articulate'.

Gbawe:
We can all appreciate that but dont you think Nigeria's image is far more serious than the need to indulge Patience Jonathan ? She is our First Lady yet her position should not make her above reproach . If not a[b] grammatically competent [/b] speaker then she should not speak in public . It is very simple. The rest of us can't be placed on a guilt trip because we don't wan't to hear a cringeworthy error-laden speech from our First Lady speaking in our official language. You forget the days when we had a politicians answer Coke, Fanta ,Sprite when asked the minerals to be found in his State !!! Those who are our visible representatives should present a good image of us . If they cannot do that then they should remain in the background .  The world has moved on. We are in a PR age .

So because she is not fluid and articulate in English she should not speak in public?? Is that a new UN resolution?? The questions is, does she make sense? Is she contributing to the development of Nigerian women and children and our society at large? - which is an area I see she has taken as her focus area, and is being quite proactive in.

She is communicating enough for anyone who is not looking at her with a preconceived judgemental and prejudiced mindset. It was eloquent and articulate people that have always brought the world to its knees, be it through Wars or complex financial manipulation the result of which we are experiencing world wide today.

What have the well spoken and image-centric leaders we have had in Nigeria produced so far

Nigerians are far too image-centric without bothering too much about substance and our own peculiarity as a nation.

Now, one thing seems obvious here: Madam Jonathan most likely is from a less privileged background and was also NOT opportuned to get a good quality and complete education like most people here. For her to now still come across the way she did considering her background I think is commendable.

To me this looks more like an attack on people from less privileged backgrounds who through no fault of theirs find themselves at a disadvantage in virtually every sphere of life while growing up, especially educationally (it is very common with Nigerians to run people down because of their less privileged background).

If Madam Jonathan had been privileged and/or opportuned to go to one of the better primary, secondary and tertiary institutions in Nigeria during her early days she would most definitely have been more articulate. Once you get to full adulthood it becomes very difficult to re-educate and retrain people on speech, grammatical, reading and writing abilities, hence no amount of lessons would significantly change these for someone of her age.

For those deriding her, under the same circumstances of a less than privileged upbringing and opportunity, they would perform even worse than they are purporting she has done.

She was slow and deliberate while reading her speech. . . but I don't see much else wrong with it. . . could still understand her. Some well educated public figures have been known to come across like that when making speeches in public, MKO and Madam Ibru are well know examples, not to talk of our politicians! Even in the western world you need to hear some of these public figures read speeches!

Some brushing up won't go amiss though, but she was a lot better than the thread headline suggested.

^^^ That is where we are headed! I don't always agree with Razie Khan of Standard Chartered, but the above is my take on the Eurobond issue as well.

Banks in Nigeria will have to sit up very quickly or risk losing out big. What is needed now are switched-on Financial/Investment Consultants in Nigeria to facilitate and enable businesses in Nigeria take full advantage of this opening.

Eurobond to reduce pressure on bank lending .

The success of Nigeria’s debut Eurobond in the international capital markets will reduce the pressure on Nigerian banks for finance by the corporate sector, analysts who spoke on the success of Nigeria’s maiden Eurobond have said. 

According to the analysts, the Eurobond issue will accelerate growth; reduce dependence on domestic banking sector for expansion, and free funds for small and medium enterprises (SMEs).

Razia Khan, chief economist, Africa, Standard Chartered Bank, while reacting to the success of Nigeria’s debut Eurobond issue, highlighted the fact that it would reduce pressure on Nigerian banks.

“It is a significant step in the right direction for Nigeria and should help to accelerate growth, while reducing dependence on the domestic banking sector for expansion. The hope is that this will free up the banking sector – which up until now has seen fierce competition for lending to the best names – to pursue asset growth in other sectors, including SMEs.”

“Also, there is the hope that the international capital markets will be open to private sector Nigerian issuers, whether oil companies, the banks, or telecoms.”

However, she notes that “an environment that is conducive to lending, with compensation for taking on more meaningful risks, also needs to be put in place.  But the Eurobond should usher in a period of stronger growth in the Nigerian private sector – in conjunction, of course, with other supportive reforms.”

Explaining further the significance of the Eurobond, she said: “With the establishment of a sovereign benchmark, it opens the way for more private sector borrowing on a scale that cannot be easily accommodated by the domestic market – at least not in the near term.  But on its own, it is no guarantor of reforms, or transformative growth, and in that respect, Nigeria will still need to prove itself.”

Victor Ogiemwonyi, chief executive officer, Partnership Investments Plc, says one impact of the offer is that it has drawn the attention of international investors to Nigeria. “Most major funds will be saying: If this has invested in Nigeria why not me?”

Ogiemwonyi disclosed that the Nigerian Eurobond offers a strong window especially for multinationals to tap into the international capital markets for their local subsidiaries.

“The advantage is that it gives them the opportunity to borrow funds at a lower rate and in a currency that they need for their local subsidiaries. Large multinationals like Mobil, Heineken, and Diageo will find the new window quite useful.”

He also believes that indigenous local firms would buy into the idea as they get to understand how they can take advantage of it. Explaining why local firms had not taken advantage of the local bond market since it had existed before now, Ogiemwonyi said interest rates were too high. “It did not make sense to borrow money at fixed interest rates of 14% to 15% for five years.”

http://www.businessdayonline.com/NG/index.php?option=com_content&view=article&id=17707:eurobond-to-reduce-pressure-on-bank-lending-&catid=76:hot-topic&Itemid=564

@DeeJay20

What better alternative(s) would you suggest for a country to raise funds?

eku_bear:
@kulutempa: It does, thanks.

To protect again forex risk. . . well, is there some sort of naira/dollar options market? If there is, then it'd be pretty easy to protect against this, yes?

Not exactly a robust market for hedging naira/dollar forex risk, but yes you can get an option although not necessarily in Nigeria. CBN rate though, will have some bearing on the coupon rates of bonds issued in Nigeria.

@ Kulutempa and Katsumoto - you are both quite knowledgeable about bonds. . . let me 'speculate':
Kulutempa is on the buy side whilst Katsumoto is on the sell side. . . or is it the other way round ?

Anyway I will go with Kulutempa on this.

kulutempa:
Here is another link for the Ghana bond issue culled from the African Development Bank's African Economic Outlook report for 2008. It again confirms that the yield at issue in 2007 is 8.50%
http://books.google.co.uk/books?id=mnyUL7Fql0MC&pg=PT341&lpg=PT341&dq=ghana+sovereign+bond+issue+2007&source=bl&ots=75W3Kwda8g&sig=yK4F2d2USuWqG8uYH85E120U4f0&hl=en&ei=Aq48TdOnJc-JhQeGy9TNCg&sa=X&oi=book_result&ct=result&resnum=2&ved=0CCQQ6AEwATgU#v=onepage&q=ghana%20sovereign%20bond%20issue%202007&f=false

Katsumoto, the FT yields are current market yields not the ones at the issue date. As I said those bonds now have shorter terms than the Nigerian issue hence their lower yields. It is all about something called the time value of money, and you will most likely find the Nigerian bonds trading at lower yields in 3 years time, just like the Ghanaian bonds.

^^Spot on. Market confidence, availability of other 'prime' opportunites e.g Nigeria's new eurobond issue   could have also played a part in bringing down the current yield on the Ghanaian bond.