₦airaland Forum

Demola Olarewaju, Tolu Ogunlesi, Onye Nkuzi, Adebola Williams, Toyosi Akerele, Chuba Ezekwesili,

Hmmm, FAYEMI....

Petr Aven, Vladimir Nazarov, Samvel Lazaryan

May 17, 2016

About twenty countries around the world are dependent on a single number: the price of oil. Some, primarily Persian Gulf states, live entirely off their oil and gas wealth. They rely on crude oil, natural gas and petroleum products for 50 percent of their Gross Domestic Product and for 70-plus percent of their budget revenue. Some 15 countries generate more than 50 percent of their export earnings from oil, gas and petroleum product sales.

Oil-producing countries have been living a dream. In recent decades, most oil-producing countries saw their per-capita GDP not only expand but show a rate of growth above the global average. In other words, they were getting rich faster than the rest of the world. In terms of dollar-denominated GDP per capita, as crude prices peaked in 2011 Russia and Kazakhstan outstripped Malaysia and Turkey; Saudi Arabia and Equatorial Guinea nearly overtook South Korea; Kuwait shot ahead of Great Britain, while Qatar rose to rank as one of the three richest nations. The new generation of the petrostates' political elite has come to look on oil rent as a means to achieve all its goals. And yet, many experts will call the oil windfall a curse, not a blessing. A prosperity that is due to the sheer accident of owning large mineral resources rather than to technological prowess, investment and hard work has its downsides, including the degradation of political systems, the throttling of competition and the proliferation of populist fiscal policies.

An awakening from this dream is now inevitable. The future holds challenges for those countries that have cast their lot with the global oil market. There is little doubt that oil's transformation into an ordinary, non-rent-generating commodity is going to change the world.
The Invisible Hand against the Petroleum Leviathan

Over the course of human history many rent-generating commodities capable of enriching their owners have turned into ordinary products. Pricing becomes determined by production costs rather than scarcity value. The readiest example is land, which has seen the rent component of its price steadily decline over millennia and has thus gradually ceased to be the main cause of armed conflicts. Other cases include furs, which generated rent for Russia into the eighteenth century, and natural rubber, which fed the Amazon boom in the early 1900s.

Inevitably, technological progress reduced the scarcity value for many commodities. A rent-generating commodity could also suffer a fall in demand when a less expensive substitute of similar quality comes to the market. The story of natural and synthetic rubber is a prime example.
Another common scenario was when supply increased, such as when previously inaccessible deposits were brought on line or new resource-rich areas were discovered. This was how the exploration and settlement of North America decimated Russia's rent from the fur trade.
Oil is now subject to just such pressures from both demand and supply.

The weakening in oil demand has more to do with technological progress than with the slowdown in China’s economy, which has been the main growth driver for the world economy and oil consumption in the recent decades.

Indeed, economic growth and oil consumption have become more and more disconnected. Over the last fifteen years, average oil-consumption-to-GDP elasticity has been about 0.7 for China and even less for developed countries. A striking example is the U.S. where from 1980-2014 real GDP grew by 150 percent and oil consumption edged up only 11 percent. This is because modern economic growth is increasingly driven by more energy-efficient sectors. Even lower prices fail to boost oil's appeal to consumers who stand to gain more from improving energy efficiency than from saving on oil costs.

Moreover, huge investment has been made in alternative energy, natural gas and electric vehicle R&. While not all this investment is viable at low crude prices, nonoil solutions in transport, energy and petrochemistry are sufficient to rein in oil-demand growth. These solutions are constantly becoming more efficient and competitive. This means that a business that only yesterday relied on government subsidies to survive will need no state money to make a profit tomorrow, even in a cheap-oil environment.

The supply side has changed even more dramatically. Although much more oil was pumped in 2014 than in 2007, the proven-reserves-to-production ratio increased from forty-nine to fifty-five years over that period. The advent of accessible shale oil alone added 50 percent to proven U.S. reserves. And this was not all “tough oil,” which can be economically recovered only at very high prices. At the start of the current oil market downturn, Moody's estimated that more than half of U.S. shale oil producers would stay profitable at $51/bbl. In the last year, this figure has become much lower. Unremitting competition-induced innovation has enhanced productivity and reduced costs. In fact, production costs at most shale oil wells eventually are likely to decline to $10–12/bbl (in current prices) due to technological breakthroughs.

Possible coordinated action by producers to curb supply and a ramp-up in Iranian production (which we are hearing so much about) could become important near-term factors. They are not, however, the drivers shaping new environmental and long-term trends. Technological innovation is chiefly responsible for the buyers’ market that will stay with us for years to come. This is making the development of a growing number of oil deposits economically viable at lower prices. And no analysis would be complete without a reference to the colossal $3.2 trillion poured into the oil industry in 2005-2014, nearly three times the amount invested over the previous decade (1995-2004). This investment should keep production going strong even at low prices. Private investment and innovation, as opposed to policies in big-oil producing countries, is increasingly determining supply. Thus, the influence of the Petroleum Leviathan—the handful of producing countries with the ability to exercise a heavy influence on the price of oil—will fall victim to the invisible hand of the market, which increasingly is armed with new oil extraction, energy-saving technologies and nonpetroleum solutions in transport, power generation and petrochemistry.

Who Stands to Lose Most

History shows that large oil and gas reserves do not necessarily secure happiness or success. In fact, oil riches may, in fact, be an obstacle to both. The vast majority of oil-producing states have paid for their windfalls with the entrenchment of authoritarian or populist left-wing regimes, repression of civil society and infringement of women's rights.
Only a third of oil-producing nations enjoy GDP per capita in excess of $10,000, while five (Angola, Iraq, Nigeria, Venezuela and Algeria) have failed to reach the $5,000 mark. In other words, although the petrostates as a group have outperformed the rest of the world in recent years, some of them have missed out on their chance. Abundant oil and gas, while always a good thing for the ruling elite, often fail to benefit the common people. And, of course, the less well-off will suffer most from a long-term decline in oil prices.
Theoretically, a government can make up for lower oil revenue by deploying the reserves accumulated in a sovereign wealth fund or by raising debt. About half of the oil-producing countries have built substantial reserves. Moreover, Norway (which learned the lesson of the 1986 oil slump and the subsequent banking crisis in the aftermath of which its reserve fund was set up), Kuwait and the UAE have all put aside enough money to tide them over a fairly long period of low oil prices or even nonexistent oil revenue. On the other hand, countries like Angola, Nigeria, Iraq, Venezuela, Mexico and Ecuador have too tiny a piggy-bank to compensate for revenue shortfalls in even the near term, while Russia and Algeria are vulnerable over the medium term. The least wealthy nations (by GDP per capita) have the smallest reserves, a result of the imprudent economic policies of their governments.

International borrowing is, as usual, easiest for countries that need it least. Saudi Arabia is a top example of this. The country should be able to raise cheap debt on the back of its strong credit rating. Mexico and Kazakhstan have some spare borrowing capacity, as does Azerbaijan. That country, however, is crippled by a colossal capital outflow (10 percent of GDP in 2014). Iran and Russia are prevented from tapping global markets by sanctions, while the other petroleum producers are hampered by low credit ratings and a lack of creditor and investor confidence.
Strong oil and gas earnings have fostered an illusion of omnipotence among the ruling regimes, prompting them to increase the government share of their economies. The government share has remained relatively small in only four petroleum states (Nigeria, Iran, Kazakhstan and Mexico) where the enlarged government budget stands at less than 30 percent of GDP. Elsewhere in the petrostate universe the figure is higher. This represents a hindrance to economic growth in medium-developed countries. The more oversized the budget, the greater the amount of commitments including social spending that is bundled into it and, consequently the more painful is an oil-induced decline in revenue.
The worst placed are those countries whose budgets are not only oversized but also unbalanced. Borrowing from their own central banks would spur inflation, while putting a heavier tax burden on an increasingly impoverished population would not be easy. The only way out of the squeeze is to cut spending, starting with capital expenditures. However, phasing out infrastructure and other mammoth projects that governments use to create jobs could cause mass unemployment and social unrest. Shrinking capital spending may also trigger infighting among the corrupt elite, as its major source of illicit enrichment dwindles.

The threats to social peace from a reduction in current spending are too obvious to merit discussion.
An oversized, unbalanced budget, especially in a relatively poor country, is a clear sign of irresponsible populism. Norway, which ended 2015 with a 6 percent budget surplus, stands out as a rare example of an oil-rich country that has pursued prudent economic policies. By contrast, a clear majority of petrostates are running a budget deficit, as the oil windfall has encouraged their populist leaders to forego sound fiscal constraints. The deficit is biggest in Venezuela (24.4 percent of GDP in 2015), Algeria (13.7 percent), Azerbaijan (7.6 percent), Russia (5.7 percent) and Ecuador (5.1 percent), all of which are already feeling the pinch. But even the affluent Persian Gulf states, particularly Saudi Arabia where government spending exceeded 50 percent of GDP and the budget deficit hit 21.6 percent of GDP in 2015, will have to radically revise their fiscal policies in the coming years. This revision will have far-reaching consequences not only for their own peoples but for the whole world.

What Oil Did to the Soviet Union

The last thirty years of the Soviet Union's existence are an excellent case study in how oil and gas dependence can shape the destiny of a country and the world.

In the early 1960s, the Soviet Union was not yet a petrostate, selling less than $1 billion in oil to capitalist countries and earning just above a fourth of its export revenue from commodities.
The country was then in the catch-up growth stage. In fact, "catch up and overtake capitalists" was a slogan that formed a lynchpin of Soviet ideology. This goal was starting to look elusive by the 1960s. The economies of leading Western nations, especially war-ravaged Western Germany and Japan, had been expanding at a tremendous rate since the end of World War II. What’s more, growth had been steadily accelerating in the U.S., which doubled its growth rate between the mid-50s and the mid-60s. The Soviet economy, on the other hand, was slowing down.

Estimates of Soviet growth rates provided by official government statistics, Soviet economists and their Western counterparts vary widely, but they all point to deceleration setting in around the mid-1950s. By that time industrialization had nearly run its course and the central planning system, which had been reasonably well suited to industrialization needs, was beginning to show its inability to cope with an increasingly complex, postindustrial economy. Urbanization, too, had already occurred, with urban population exceeding 50 percent in 1962. A cheap rural workforce could no longer be counted on as a source of rent.

(you're going to have to read the rest from http://nationalinterest.org/feature/twilight-the-petrostate-16235?page=2)

Petr Aven - President of the Alfa Bank; served as Minister of Foreign Economic Relations during Yeltsin government. Vladimir Nazarov - Director of the Finance Research Institute of the Ministry of Finance of the Russian Federation. Samvel Lazaryan - Adviser to Director of the Finance Research Institute of the Ministry of Finance.

http://localdata.ng

http://localdata.ng/?p=589

copy paste into address bar (try a couple of times if it doesn't work at first (maybe server issues)

get it while you can

courtesy twitter handle @xniyi

cc lalasticlala, seun, mynd44

Thank God

MINISTER OF......

quote from original thread


[size=15pt]"People have been calling me that they have restaurants that are also popular, I just want to use this opportunity to say Designer rice and Amal360 have been around since my childhood days, I eat in both places and I also hear about them almost everywhere I go now, that's why I thought it would be nice if we give them a face lift so all this VIP's that have good words to say about them would be more comfortable when they come around. So pls Designer Rice and Amala 360 have a special place in my heart that's why I did this."[/size]

I won't tell you what he did in Georgia, USA

[size=15pt]"People have been calling me that they have restaurants that are also popular, I just want to use this opportunity to say Designer rice and Amal360 have been around since my childhood days, I eat in both places and I also hear about them almost everywhere I go now, that's why I thought it would be nice if we give them a face lift so all this VIP's that have good words to say about them would be more comfortable when they come around. So pls Designer Rice and Amala 360 have a special place in my heart that's why I did this."[/size]

Must be a personal pet project.....




more pictures on this thread

https://www.nairaland.com/2865833/pictures-femi-gbajabiamila-re-opening

cc lalasticlala, seun, mynd44

Omojuwa

Popular music producer Don Jazzy expresses regret for voting in PMB and confusion over the governments policies

[size=15pt]MODIFIED*

My apologies, I misread the original twitter handles *sarcasm* and have since been CORRECTED that this is an OLD post.

I have therefore amended the post as follows

BREAKING: Don Jazzy regrets voting PMB!!! (Who's next)

to

FLASHBACK: Don Jazzy regrets voting GEJ!!!

modified at 6:58am 12/05/2016

*MODS should kindly disregard this thread ie 'no FP please'*

Apologies to all who have posted under the previous heading, thanks goes to those who pointed out the error[/size]

Knightsbridge....hmmmm..

*Modified*

This same Knightsbridge was indicted by the Lagos state government for illegal dredging.



Plus was gazetted by the FGN under 'Defaulters and Refusals of Mineral Titles'

President Muhammadu Buhari has yet again reneged on his promise to make specific details of his assets public, failing to release comprehensive particulars of assets he filed to the Code of Conduct Bureau.

The president had said he would make full disclosure after verification of the listed items by the CCB.

A statement by the Code of Conduct Bureau on Wednesday said verification of the president’s assets had “since” been concluded.
On September 3, 2015, in the face of widespread criticisms, the presidency through Garba Shehu, a presidential spokesperson, had released only some details of assets and liabilities filed by President Buhari and Vice President Yemi Osinbajo.

The statement said Mr. Buhari had N30 million in his bank account before taking office on May 29, while Mr. Osinbajo had N94 million and $900,000.

It listed other assets of the president to include five houses in Kaduna, Daura, Kano and Abuja; two undeveloped plots of land, one in Kano and the other in Port Harcourt.

Mr. Buhari also had farms, an orchard, ranch, livestock including 270 cattle, 25 sheep, five horses, a variety of birds and a number of economic trees, according to the statement. The president had an unstated “number of cars”.
Vice President Osinbajo owned 4-bedroom residence at Victoria Garden City, Lagos and a 3-bedroom flat at 2 Mosley Road, Ikoyi, the statement said.

He also had a 2-bedroom flat at the popular Redemption Camp along Lagos-Ibadan Expressway and a 2-bedroom mortgaged property in Bedford, England.

Apart from his law firm, known as SimmonsCooper, he had shareholding in Octogenerium Ltd., Windsor Grant Ltd., Tarapolsa, Vistorion Ltd., Aviva Ltd. and MTN Nigeria – all based in Lagos.

The release lacked specific details such as addresses and value of listed houses, and assets of spouses and unmarried children under 18.
The announcement came after repeated refusal by the new government to fulfil its promise of making the president’s assets public within its first 100 days in office.

Initially, the presidency had told Nigerians that Mr. Buhari was awaiting verification of the declared assets by the Code of Conduct Bureau before going public.

A week away from the government’s 100th day in office, amid mounting criticism, the presidency and the ruling All Progressives Congress denied Mr. Buhari made any promise within his first 100 days in office. That claim was proven by PREMIUM TIMES to be untrue.
When the presidency finally released some details of the assets, it assured Nigerians that full disclosure contained in the filed documents would be made public immediately after verification by the CCB.

“As soon as the CCB is through with the process, the documents will be released to the Nigerian public and people can see for themselves,” the statement by Mr. Shehu had said.

But a statement by the Code of Conduct Bureau on Wednesday shows the president reneged on that promise.

The statement, issued in response to a news report that verification of assets and liabilities declared by Messrs. Buhari, Osinbajo, President of the Senate President, Bukola Saraki, and other top government officials, including Speaker Yakubu Dogara, had not been completed, CCB said it had concluded the process of verifying the declarations of the mentioned officials.

“The bureau wishes to inform the general public that it has since concluded the verification of assets declared by those mentioned in the said publication,” CCB said in a statement by its Head, Press and Protocol, Mohammed Idris.

While the statement did not disclose when the verification was concluded, it said the process was “since concluded”.

Some officials yet to declare assets
The statement also disclosed that there were still some government officials who were yet to comply with the law by declaring their assets and liabilities.

It however said the rate of compliance by public officers had increased since Mr. Buhari assumed office.

The bureau appealed to defaulting public officers to comply with the law by declaring their assets and liabilities to the bureau.
“The bureau will like to use this medium to appeal to those who are yet to declare their assets to visit the Asokoro, Head Office of No 23, Halle Salasi Street Asokoro, Abuja to collect, fill and submit same to the office,” said the statement.
“It could be observed that since the inception of the present administration under President Muhammadu Buhari, the rate of compliance by public officials in responding to assets declaration has greatly increased,” said the statement.
Apparently referring to Mr. Saraki who is facing corruption trial at the Code of Conduct, CCB added that, “Therefore, the said publication is another trick to misinform the public so as to undermine the ongoing trials of cases of false declaration of assets before the Code of Conduct Tribunal”.

The presidency did not respond to requests for comment for this story. Mr. Buhari’s spokespersons, Femi Adesina and Garba Shehu, did not respond to calls and text messages to their phones.

http://www.premiumtimesng.com/news/headlines/202938-buhari-reneges-assets-pledge-fails-release-documents-ccb-verification.html

Sorry, but WHO spent N64 Billion 'on Travel' last year?


*hint*

http://www.nigerianmonitor.com/list-of-26-countries-president-buhari-has-visited-since-assuming-office/

4th Mainland Bridge

Fashola promised to deliver the 4th mainland bridge before the end of his tenure stating that it was an electoral promise to constituents. Nobody begged him to promise and 8 years later no Bridge.

https://www.nairaland.com/294287/proposed-4th-mainland-bridge-lagosa/1



Lekki-Epe Expressway Concession

Fashola authorised the cancellation of this concession. There is still 18km of road to do. Lagos state 'bought out' the concessionaires and still owes the African Development Bank

http://www.premiumtimesng.com/news/143629-lagos-terminates-concession-agreement-on-lekki-epe-expressway.html



Lagos State IGR

2014 figures show Lagos as having generated more IGR than 31 states. Considering that a number of infrastructure projects are funded by the World Bank does the reality on ground reflect this fact?

http://eoebevy.com/index.php?topic=2409.0#sthash.8AGOicb4.90xfmCzh.dpbs



Unescessary Lies

That a Minister of the Federal Republic feels obligated to lie with elan is most worrying

https://www.nairaland.com/3060480/debunking-fasholais-unnecessary-lies-re

Opportunities for off-grid solutions in the Nigerian power sector


Summary
Nigeria can only achieve the desired increase in generation with a balanced blend of on-grid and off-grid power projects.


Introduction

The Nigerian population is above one hundred and eighty three million (www.worldometers.info), and about 55% of the population have no access to grid-connected electricity (Nigeria Power Baseline Report -nesistats.org). Access to electricity in the rural areas is about 35% and about 55% in the urban areas.

It has been estimated that developing economies would need about 1,000MW per million people to meet their electricity demand. Invariably, Nigeria would require more than 160,000MW to achieve the desired electricity generation capacity. Nigeria projects that by the year 2020, the country's generation capacity would be in excess of 40GW (40,000MW), and the energy mix will constitute 69% thermal generation; 17% hydro; 10% coal; and about 4% of renewable. (www.nipc.gov.ng)

The on-grid challenge

On-grid generation refers to a system of power generation evacuated through the national grid to off-takers which may be the Bulk Trader, (Nigerian Bulk Electricity Trading Company Plc.) who through vesting contracts supplies the power to Distribution Companies; or directly to Eligible Customers, as may be declared by the Minister of Power. (The title of the Minister of Power in Nigeria is “Minister of Power, Works and Housing.”)

Presently, the installed power generation capacity in Nigeria is 12,522MW; out of which 10,592MW is gas fired; and 1,930MW is from hydro. It is worth noting that out of the total installed capacity, the maximum peak generation by power plants in December, 2015 was 4,810MW.

Most of the power received by Nigerian electricity consumers is on-grid power supplied by the Distribution Companies (DISCOs). On-grid power generation has over the years had its constraints, some of which are identified below:

a. Unavailability of gas: About 85% of installed generation capacity is thermal. Although Nigeria has the world's 9th largest gas reserves measuring 180,105Bscf (Billion standard cubic feet); the gas production is significantly low. Statistics reveal that as at 2014, the total gas produced was 8.9Bscfd, and less than 10% was supplied to the domestic power sector for generation. Gas constraints is said to reduce the power generation capacity by 1,995MW, and reasons for this include uneconomical gas prices; gas pipeline vandalism; insufficient gas infrastructure; and uncertainty in regulation and fiscal policy for gas, amongst others.

b. Inadequate transmission infrastructure: The existing transmission system is only capable of delivering about 5,300MW (out of the total installed capacity of 12,522MW) of power to DISCO trading points. This is as a result of Nigeria's current weak transmission infrastructure which is majorly radial, which means that it's a single path of transmission with a power source at one end. This implies that any fault in the path could potentially lead to a collapse of the transmission network. The issue with transmission has been estimated to reduce the power generation capacity by a total of about 263MW. Although, the Transmission Company of Nigeria plans to upgrade the transmission system to a capacity of 11,000MW by 2020 (subject to adequate funding and completion of projects planned for implementation); the transmission infrastructure in its current state, without an upgrade and improved technology, is unable to accommodate the estimated increase in generation by 2020.

c. Liquidity issues in the Nigerian Electricity Supply Industry (NESI): The NESI has since the handover of the PHCN Generation Companies (GENCOs) and DISCOs in November, 2013, been faced with liquidity issues resulting from non-cost reflective tariffs. The DISCOs, being the cash collectors in the power value chain were unable to collect sufficient revenue to pay their power bills which should sustain the rest of the value chain (GENCOs, gas suppliers and service providers). As a result, all the market participants in the power value chain cannot get their revenues in full, and this has led to a cash crunch in the market. This is clearly a disincentive to investment in additional generation or capital expenditure for the DISCOs. The current cash crunch is likely to linger until February 2016, when the newly reviewed Multi Year Tariff Order, 2015 becomes effective. Even then, the liquidity issues should not be expected to fall away overnight, but should ease off over the next two years as the Discos become more credit worthy.

d. Nigerian Integrated Power Project (NIPP) Privatisation: Closely related to the liquidity issues highlighted above are the issues affecting the completion of the NIPP Privatisation. The privatization process of NIPP Power Plants, which have a capacity to add up to 4,775MW to the grid, has been fraught with issues including non-availability of gas; non-completion of some of the NIPP plants; and inadequate gas and transmission infrastructure. More importantly, the current liquidity issues in the NESI, and the lack of government credit enhancements in the present circumstances, have not given potential investors the confidence to invest in the acquisition of the assets. This is especially complicated by the fact that most Nigerian Banks have a substantial amount of exposure to the power sector from the PHCN privatization, and the alternative is international funding which would be subject to more scrutiny by international banks.

Given the above, it is imperative that whilst the issues are being resolved, we should look at viable solutions for increasing generation that would hopefully be somewhat isolated from some of the issues raised above.

The off-grid solution

[b]Off-grid generation can be described as stand-alone power generation systems or mini-grids, which typically provide smaller communities (e.g. rural areas; industrial clusters or residential estates) with electricity through independent electricity distribution network systems.

The total off-grid electricity generation capacity as approved by the Nigerian Electricity Regulatory Commission (NERC) is still less than 500MW (http://www.punchng.com November 6, 2015). Considering Nigeria's plans to increase generation capacity in the coming years and the low level of access to electricity in the rural areas; there is need for significant investments in off-grid generation.

As an example, Bangladesh is one of the world's most densely populated countries with a population of over one hundred and fifty eight million and has made a success story from implementing off-grid power solutions. The government of Bangladesh initiated the Solar Home System (SHS) based rural electrification programme in 2003 through Infrastructure Development Company Limited under a micro-credit scheme. In 2002, only 7,000 Bangladeshi households used solar panels, but as of today, the programme has installed about 2 million SHS in the country. Also, since 2010, about four mini-grids have been installed, and nine others are to be installed in off-grid locations of Bangladesh.
[/b]
Prospects for off-grid solutions in Nigeria

a. Potential to grow industrial clusters and small cottage industries: Most industrial clusters and some small cottage industries require uninterrupted power supply to function optimally. The power supplied could be generated through fully off-grid power plants or embedded within distribution networks. This could potentially transform the economy of these areas; increase profitability for the existing businesses; create jobs; and breed a crop of customers who are willing to pay for electricity supplied.



Steps are already being taken in this direction as the final report on a proposed framework for micro-grid power generation for industrial clusters in Nigeria is soon to be submitted to the Minister for Power, Works and Housing by NERC. The Manufacturers Association of Nigeria has also identified about 28 clusters for mini-grid modular plants ranging from 5 to 50MW in areas including Ogun and Lagos States. (www.thisdaylive.com, December 22, 2015). The mini-grids require a lot of capital investment of between $40 and $400million.

b. Opportunity to expand and refurbish distribution networks of the DISCOs: In line with the NERC Regulation for Independent Electricity Distribution Networks, 2012 (IEDN Regulations), off-grid generation plants require Independent Electricity Distribution Networks (IEDNs) to supply electricity to end users, save for eligible customers upon declaration by the Minister of Power, who can be supplied to directly. This creates opportunities for investors who may wish to create off-grid projects with their own IEDN. This could potentially be a win-win situation for DISCOs who could either collaborate with developers to expand or refurbish their network; add to their number of paying customers; or acquire the developer assets given the right regulatory framework.

c. Opportunity to collaborate with State Governments: Many state governments are looking to partner with investors to develop more off-grid projects than on-grid projects. This may be to avoid regulatory constraints (as a result of the fact that most laws, regulations, and agencies for on-grid projects are controlled by the federal government) which state governments may experience when executing on-grid projects. It must, however, be noted that whilst these constraints may be minimal with off-grid projects, they cannot be totally avoided, as NERC, being the regulator of the power sector still has the power to issue off-grid licences and generally regulate the power sector. Notably, the Lagos State Government has initiated some Independent Power Projects (IPPs) to provide electricity to its own establishments, including schools, ministries, hospitals, and courts. As at July, 2015, the state had commissioned five IPPs with an accumulated capacity of 47.5MW.

d. Access to other fuel alternatives: Most of the power plants in Nigeria are gas fired thermal plants. Given the current constraints with gas, off-grid power plants are able to take advantage of diverse and hybrid fuel sources like renewables (solar, wind, biomass) and because the power is not generated on-grid, transmission constraints with renewables are eliminated. This would be particularly more useful in areas where there is limited gas supply, e.g. the northern part of Nigeria where solar, wind, and hydro sources are prevalent.

e. Considerable insulation from the issues within the NESI: Given Nigeria's considerable power requirements, off-grid solutions within a cluster of customers willing and able to pay present a viable investment opportunity for power developers. This is particularly because their investment would be insulated from the current liquidity issues in the NESI.

f. Opportunity for rural electrification: Off-grid solutions are also useful in Nigeria in view of some topographical or geographical challenges in the rural areas which have made it uneconomical to extend the grid to such areas. Rural electrification in Nigeria is currently in a weak and dilapidated state; hence there is a dire need for investments. Recently, bids were requested by the Rural Electrification Agency (REA) for several rural electrification projects across Nigeria, and were to be submitted to the Agency by 27th November, 2015. It is expected that many rural electrification projects will spring up this year. A priority for the REA should be the sustainable development of rural mini-grids that are targeted towards the economic development of these rural communities so that the communities can learn the culture of paying for electricity.

Challenges to off-grid solutions

a. Regulatory framework: Whilst there is the IEDN Regulations and a draft Regulation under consideration for Independent Electricity Transmission Network; there is still a considerable amount of uncertainty with respect to the regulations as it relates to off-grid projects. Hence, a lot of discretion remains with NERC. Areas of uncertainty in the regulations include the issue of whether isolated urban IEDNs can exist within a DISCOs franchise area; how to deal with excess power produced by either captive or off-grid generators; applicability of the tariff methodology to off-grid generators; and applicability of the procurement rules to off-grid generators, in view of the contradiction between the IEDN Regulations, 2012 and the NERC Regulation for procurement of Generation Capacity, 2014. (An Isolated Off-Grid Urban IEDN means an IEDN in an urban area which is not connected to a distribution network that is connected to the transmission system operated by the system operation licensee (Chapter I, Section 3 of the NERC Regulation for IEDN, 2012)

b. Resistance or objections from Existing Monopolies: There is a likelihood of objections to the grant of off-grid licences from DISCOs) over the areas where their DISCO licences currently cover. NERC also maintains a balance to ensure that the DISCO's market share will not be eroded by the grant of an off-grid license.

c. Access to gas: As mentioned above, where gas is the main fuel source, there may be issues with gas supply.

d. Requirement for licensing: This is an issue for captive power plants who only have permits to operate, and not licences, when they have stranded power. The captive power plants cannot sell power to willing buyers with their permits, but must obtain embedded generation licence(s) to sell power.

e. Technology gap: Due to the fact that many of the off-grid equipment are sophisticated, Nigerians need to develop the adequate technological know-how. It is common to find that many solar PVs (photovoltaic) installed pack up shortly after installation. Also, renewables such as wind and biomass have not been fully explored in Nigeria, and would require adequate know-how for Nigerians to operate.

f. Other considerations: The start-up of off-grid power plants is usually capital intensive, and considerations include putting together the appropriate technical, financial and legal team for the project; ascertaining adequate costing for the project; undertaking viable feasibility studies for the project; adequate funding for the project; obtaining clear title for the project land, where applicable; available source of fuel and water; and identifying proposed off-takers for the project, amongst others.

[b]Recommendations going forward

a. There is a need to create an investor friendly environment for off-grid solutions, which will allow for government support, tax incentives and reliefs to encourage investments in the power sector. Examples of efforts in this regard include the National Renewable Energy and Energy Efficiency Policy for the Electricity Sector newly approved by the Federal Government; and the Renewable Energy Master Plan developed for Nigeria.

b. It is important for Nigeria to intensify efforts in seeking funding support from the World Bank, Development Finance Institutions and NGOs for the purpose of electrifying Nigeria. The Bangladesh off-grid success story is was possible through the support of these institutions.

c. The off-grid concept should be decentralised among the federal, state and local governments. This will allow for faster implementation of off-grid projects through the actualisation of long-term plans.

d. There should be certainty in the regulations for off-grid solutions. There should also be clarity with respect to the criteria for generally licensing off-grid projects in urban and industrial clusters.

e. NERC should also create an avenue to enable easier licensing for captive permit holders and off-grid licensees who have excess or stranded power, and wish to supply to the DISCOs.

f. NERC should implement a workable compensation formula to create a win-win situation for investors and a DISCO, when such DISCO desires to take over their franchise areas which was operated by an off-grid licensee. This way, the off-grid operator would be able to recover, at the minimum, the cost of its investment; and the DISCOs would in turn inherit a crop of customers who have become accustomed to paying their bills. This will invariably encourage power developers to invest in areas within DISCOs' franchise areas (which are either poorly operated or not operated at all).

g. Human capacity development is necessary to achieve adequate technological know-how for off-grid projects.

h. The REA needs to create a clear and sustainable strategy for development and funding of rural electrification. Where the projects are sustainable, they would be eligible for takeover by the DISCOs or even by power developers.

Conclusion

Nigeria can only achieve the desired increase in generation with a balanced blend of on-grid and off-grid power projects. A balanced approach could potentially lead to an accelerated journey to full electrification in Nigeria. This would in turn result in a significant economic boost of the Nigerian economy, as power has been proven to be an enabler of other sectors of the economy.

Detail Commercial Solicitors is distinct as Nigeria's first commercial solicitor firm to specialize exclusively in non-courtroom practice. Based in Lagos, Nigeria's business capital, DETAIL is totally committed to its clients' business objectives and reputed for dealing with the minutiae.[/b]

- See more at: http://www.financialnigeria.com/opportunities-for-off-grid-solutions-in-the-nigerian-power-sector-sustainable-293.html#sthash.53oYPUx6.dpuf

Will all the unpartisan detribalised Nigerian Youth please stand up!

Lai Muhammed

Lai Mohammed, minister of information and culture, says dressing masquerades could create a thousand jobs per week for Nigerian men.

Speaking at the sectoral debate of the federal house of representative in Abuja on Tuesday, Mohammed said most states in Nigeria have one festival or the other.

“Most states today have more than one festival a year, but the packaging and lack of capacity has not enabled them to make the most out of these festivals,” he said.

“There’s a particular masquerade in the south east, it takes 100 people to dress him, another 100 people to UnCloth him.

“If this masquerade is well-packaged, it can provide employment in one week for more than 1000 young men. These are some of the untapped potentials.”

Mohammed explained that Nigeria has the oldest forest in the world in terms of biodiversity for tourists to visit, but tourists are discouraged by bribing and insecurity in the country.

“I worked in the airport for 10 years, and I know that if you want your passport stamped as a foreigner, you slip $100 into your passport. No tourist would come back to a country where he has to bribe immigration to enter.

“No tourist would come to a country where, when he leaves immigration, he enters a ‘one-chance’ taxi or ‘one-chance’ bus. It’s a holistic problem and these are all contained in the national tourism master plan, which I would make available to the house.

“We must make a difference between tourist sites and tourist attractions; what we have in Nigeria are tourist sites. They are not tourist attractions.

“You need infrastructure to convert a tourist site to a tourist attraction. If you don’t have infrastructure, it would always remain a tourist site,

“In Cross Rivers reserve park, Nigeria has the oldest forest in the whole world. It is the oldest in terms of biodiversity, and we have this very rare, white-mane gorilla in that area, but because my people in Cross River have decided to turn them to bush meat, they have now escaped.”

https://www.thecable.ng/lai-one-masquerade-can-create-jobs-for-1000-men

This is sad on many levels

*MODIFIED*

[b]#HowToFixNigeria


If by 2019 Nigerians who are currently under 40 years old (and who are detribalised and selfless) are not able to wrest power from the 'usual suspects'. Nigeria's migration from third to first world nation may very well not take place before 2100

Migration from third to first world status CAN take place in a generation (33 years) with consistent committed selfless and visionary leadership (across party lines) propagating a POLICY MASTERPLAN that must be arrived at via extensive research and creative problem solving.

Nigeria's problems are more than 50 years old! The solutions to these problems are just as old.

A youth (36 years or less) will DV be 69 years old or less in 33 years, he or she will either be faced with a gargantuan mess of a nation or a country that is head and shoulders above most nations of the world.

Which would we rather have?

Dem no dey plant corn for morning harvest am for night, guys we've really really got to start thinking and doing.
[/b]

Budgit have provided an infographic showing an up to date (according to their research) list of States' indebtedness to Civil Servants

"Two legs good, four legs bad"

The doctors in Nigeria - What happened to them?