Essay
Essay
Nigeria: Land of Powerful
Opportunities
After decades of neglect, Africa’s most populous nation has
started a revolution in its power sector. The country faces tremendous
­challenges, but even greater potentials, writes Chinedu Nebo,
­­Nigeria’s Minister of Power for Living Energy.
Text: Chinedu Nebo Illustration: Burkhard Neie
S
ome people, when they look at Africa,
see scarcity: They see what’s not there in­
stead of what could be. Whereas I see op­
portunities, and above all a bright future, and I
urge everyone to do the same. Nowhere is that
more true than in the power sector, especially
ours in Nigeria.
A few simple truths are in order. The country
does not have enough power. Even if the amount
of energy generated in Nigeria today were qua­
drupled, it would not meet demand. And indeed,
years of dissipation have allowed our transmis­
sion system to nearly grind to a halt. It is weak,
unreliable, and very unstable; system collapses
are the order of the day. And indeed, in the past,
there has not been enough capital investment
to cater for the energy needs of Africa’s most
populous nation with more than 170 million in­
habitants. But there are other truths as well:
Change has already begun, and Nigeria’s energy
system is transforming fast. The current gov­
ernment has understood that power supply is
crucial, not only for our national economic de­
velopment, but also for our survival as a nation.
There is no sense in debating economic and
88 Living Energy · No. 10 | May 2014
­industrial development, or starting manufactur­
ing companies and small and medium-scale
enterprises without having adequate electricity
to drive all these economic sectors. Indeed, for
an investor in the Nigerian power sector, the
opportunities are huge.
Liberalization Is the Key
From the very beginning of Nigeria’s current
revolution in the power sector, our focus has
been on private investors. The sheer scale of the
challenges Nigeria is facing precludes any de­
velopment managed solely by the state. Nigeria
needs to generate 40 times what we are current­
ly generating just to be on par with South Africa
in per capita energy consumption. So we have
invited private-sector investors to buy already
existing assets and massively expand them, and
also to build greenfield independent power proj­
ects on their own. What we’re asking from inter­
national investors is foreign direct investment
in Nigeria. Come and invest in your own power
plants, and if you don’t feel comfortable, part­
ner with Nigerian companies in order to do that.
The government has made the terrain very
u
Living Energy · No. 10 | May 2014 89
Essay
Essay
easy and investor-friendly. We issue power pur­
chase agreements to anyone who plans to build
a power plant – we’re basically guaranteeing to
buy whatever you generate. Current projects
have additionally been backed by partial risk
guarantees through the World Bank, the African
Development Bank, or sovereign guarantees.
It is my strong belief that investors simply can’t
lose in the Nigerian energy sector.
Some might have felt uneasy in the beginning.
Nigeria has developed a bad reputation for
corruption in the past. When the privatization
exercise began in earnest after the election of
President Goodluck Jonathan in 2011, doubters
expected it to fail. But we proved them wrong,
and we are proud of that. Corruption has a way
of stunting the growth of any society. We have
ensures a well-balanced regulatory framework
for both investors and consumers. The Nigerian
Bulk Electricity Trading PLC negotiates power
purchase agreements with independent power
producers, backed by state-run credit enhance­
ment instruments. The Transmission Company
of Nigeria has been reorganized with help from
the international private sector and today is a
technically, financially, and commercially viable
and – most importantly – market-driven com­
pany. All this is part of the Roadmap for Power
Sector Reform launched by President Jonathan
in August 2010, which aims to reduce the role of
the state to its core functions: regulation and
the promotion of best conditions for those want­
ing to boost Nigeria’s power sector. The rest is
up to the private sector: As a government, we
recommend the best state-of-the-art power gen­
erating technologies, whether they be gas tur­
bines, coal plants, or wind turbines. As we move
towards more renewables, we need wind tur­
bines and facilities for solar energy. We also have
some hydropower potential in Nigeria. All the
ingredients are there for a veritable gold rush
in the energy sector.
Blessed with Resources
no choice but to be crusaders against corrup­
tion, and especially in a sector as crucial as the
power sector, we have to stem the tide of cor­
ruption that is threatening to drown us as a na­
tion. It doesn’t matter whom you ask: Anyone
who has been involved in the privatization of
the energy sector so far says that it was carried
out transparently and accountably. When the
transaction documents were signed between in­
vestors and the Federal Government of Nigeria
on February 21, 2013, almost all of the compa­
nies that were created out of the state-run Pow­
er Holding Company of Nigeria changed hands.
That day marked the beginning of a new age for
Nigeria’s power supply.
In the past, the government was responsible for
policy formulation, regulation, operation, and
investment in the Nigerian power sector. Today,
the Nigerian Electricity Regulatory Commission
90 Living Energy · No. 10 | May 2014
Nigeria is quite a blessed country when it comes
to energy resources. In the Niger Delta in the
south, we have massive reserves of oil and gas:
37.14 billion barrels in proven crude oil reserves,
and 5,118 billion cubic meters of proven reserves
in natural gas. In the middle belt, huge coal de­
posits are waiting to be exploited. And in the far
north, we have high solar radiation. ­Nigeria is a
land of plenty: We have resources everywhere,
now we just have to tap into them.
Gas is of particular importance for us since it is
the cheapest source, especially for power gener­
ation. Nigeria’s gas reserves are the eighth-larg­
est in the world, so the potential is enormous.
Gas development has not matched demand from
the industry and the power sector in the past,
but with the gas master plan developed to pro­
vide a long-term perspective for the develop­
ment of gas infrastructure and a huge amount
of government resources dedicated to gas sup­
ply, demand and supply for gas in the power
sector will be matched in due course. We are
Photo: Private
“It is my strong belief that investors
simply can’t lose in the Nigerian
energy sector.”
planning to develop more fields, reducing gas
flaring to a bare minimum, developing the gas
infrastructure with regard to transportation to
the power plants that are currently being built,
and ensuring that gas molecules are fed more
efficiently into the system.
When it comes to the development of efficient
and reliable gas-fired power plants, Siemens is
one of our major partners. Siemens alone has
signed a memorandum of understanding with
the Federal Government for the development
of 10 gigawatts of power generation capacity.
Gas-fired power plants will be responsible for
70 percent of the power generated by the end
of 2014, and for the foreseeable future, gas will
retain that prominence. We expect the newly
built gas power plants to be up to modern stan­
dards; for areas far from the south and its gas
supplies, we are opting, for instance, for small­
er turbines that can be operated using natural
gas, but also liquefied natural gas, so that we can
solve the problem of transport more easily. In
a country as huge and diverse as Nigeria, diver­
sity is the key.
That is also true for power sources. Nigeria has
more than 690 million tonnes of proven coal
­deposits and about 2.5 billion tonnes of coal re­
serves. These reserves have to be developed,
and a large share of them can be used for power
generation. Others will be made into smokeless
briquettes for environmentally friendly cooking,
which is important especially for the rural ar­
eas, where much of the cooking is still done with
firewood. Our forests are being depleted, and
the Sahara is encroaching into Nigeria – to push
back the desert, we’ll need the coal. It is part of
our conviction that an energy system for the fu­
ture must be sustainable and provide a better
future to even the remotest communities. This
is also where renewables such as solar, wind, and
in some cases biomass and hydropower come in.
In January 2014, we began a campaign called
“Light up, rural Nigeria.” In a first step, we erect­
ed three pilot stations in communities that are
not connected to the national grid. In these vil­
lages, solar energy is now provided to every
household. At the same time, the villages re­
ceived an energy hub for communal uses requir­
ing electricity. The president has personally
backed this project. Now we’re looking for the u
Chinedu Nebo
“Power will
make
Nigeria
powerful.”
Background
Chinedu Nebo (62), born in
­Kaduna state in northern Nigeria,
was appointed as Nigeria’s Minister of Power in February 2013.
He holds a PhD in Material Engineering and Science from the
South Dakota School of Mines and
Technology in the USA. Prior to
his appointment in government,
Nebo was Vice Chancellor of
­Nigeria’s newly created Federal
University in Oye-Ekiti, after having served in the same capacity
at the University of ­Nigeria in
Nsukka for five years.
Making an Impact
Hailed as an impartial technocrat
and a reformer in his current as
well as his previous positions,
Nebo took over one of the largest
privatization efforts undertaken
anywhere in the world, with the
aim of transforming a stateowned, run-down energy sector
into a privatized, state-of-the-art
system. “I believe that everyone
of us has an opportunity to make
an impact, wherever you are,” he
says about the forces driving him
in his daily work.
Building a Successful
Country
For the father of four and devout
Christian, family and his spiritual
beliefs are the key ingredients for
his success. He admits that Nigeria still has a long way to go to
become the modernized, unified
state he wants it to be. “But we’re
all working to reposition Nigeria,
with the aim of creating a country that our children will be very
proud of.”
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“Bringing power to consumers
is a huge challenge – the
­transmission system is probably
our weakest link.”
funding to upscale the project, including per­
manent maintenance of these stations even in
remote areas.
Sustainability and the variety of energy sources
alone will not provide the solution to Nigeria’s
electricity challenges. However, these factors are
indispensable for attaining sufficiency and na­
tional energy security. Disruptions of oil and gas
pipelines would be disastrous in case of total
dependency on those fuel types. Therefore, it is
crucial to develop coal, hydro, and alternative
sources as well. For 2020, we expect a total of at
least 20 gigawatts of electricity produced; that
would be five times what we produce today, which
is about 4 gigawatts. And it will be a good mix
that will serve Nigeria well.
Power to the People
Generating power is one challenge – the other
is to bring it to consumers. It is indeed a huge
challenge, if not the biggest one. The current
transmission system is probably our weakest
link. But we’re aware of that, and the Nigerian
government has already allocated more than
US$3 billion to strengthen transmission capaci­
ty. This is not only intended for stabilizing the
existing infrastructure, but for a massive expan­
sion and building a truly national grid. Our aim
is to move from the current radial system of trans­
mission to a grid that will make power supply
much more reliable and stable. The massive in­
vestments we’ve initiated are also aimed at in­
creasing the capacity of the entire system, so that
the fast-growing amount of energy can be trans­
mitted easily. Port Harcourt in the south and
Maiduguri in the north are more than 1,200 kilo­
meters apart – and the distance across from
east to west is about the same. This necessitates
a massive expansion of transmission lines in a
country where hardly any yet exist. To reach that
goal, we are investing in the best possible trans­
formers and transmission substations from
companies like Siemens, but at the same time
also encouraging foreign companies to train
human resources in Nigeria to guarantee repairs,
maintenance, and servicing of these entities.
The creation of qualified jobs is an integral part
of our road map towards a better energy future,
as is the aspect of quality. It is true that in terms
of energy supply, the country is far behind other
nations, especially in the developed world. But
again, we choose to see this as an opportunity:
the chance to leapfrog ahead and avoid all the
mistakes others have made along the way.
As an engineer, I am aware that energy today is
mostly knowledge driven. There are no onesize-fits-all solutions. To satisfy energy needs,
Nigeria Electricity Statistics
A Golden Future
Gross electricity generation (2010)
Total:
27.1 TWh
Hydro (conventional)
5.7 TWh
Oil
4.3 TWh
Population
CO2 emissions (2013)
CO2 emissions from
power generation
168.8 53.3 13.0
million
Mt, CO2 in total
t, CO2 per capita in total
Gas
17.1 TWh
Source: IEA 2013, IHS Global Insight, World Bank (2012)
92 Living Energy · No. 10 | May 2014
we have to talk about environmental and finan­
cial factors, as well as the sociological and de­
mographic dispositions of the people you want
to provide with energy. Modern computer tech­
nology is at least as important for success as is
the latest knowledge on how to construct a pow­
er plant. So you need a cross-technological back­
ground in order to be a competitive energy player
in the current market. That’s the good thing
about being in a knowledge-driven global econ­
omy: We don’t have to reinvent the wheels the
developed countries made. We don’t have to go
through all the tricky phases they discovered.
We’re just leapfrogging ahead and making sure
we have the best that is currently available and
feasible for our country.
The national grid will eventually reach the rural
areas, but in a country as expansive as Nigeria,
extending the national grid to all rural commu­
nities within the next decade is not possible.
The government has therefore decided to provide
power to the thousands of rural communities
using renewable energy. It is a decision that is
also in line with our environmental policy and
commitment to mitigation efforts with regard
­ igeria aims
to climate change. Environmentally, N
to be in line with the rest of the world. We’ve
signed all necessary agreements and we’re eager
to implement them. Regulations are in place to
stop all flaring activities soon. It’s good for the
environment and will create a new source of en­
ergy through the transformation of associated
gases in, for example, liquefied natural gas, pro­
pane, or butane. The potential is enormous,
given that the National Oceanic and Atmospher­
ic Administration of the USA estimates that al­
most 15 billion cubic meters of gas were flared
in 2010 alone. This is the kind of win-win situa­
tion that Nigeria is exploring on its way to a
sustainable energy future – and a f­ uture of
plenty for all.
Once we have sufficient power supply in Nigeria,
industry will take off. We don’t lack entrepre­
neurial spirit or business opportunities – it’s
the power shortage that is holding us back, indi­
vidually and as a society. Reliable power supply
will bring an exponential increase in the number
of industrial and manufacturing companies.
National GDP will increase from today’s growth
rate of 6.5 percent to double digits, provided there
is enough electricity.
Look at the agricultural sector, which is current­
ly being revitalized. The raw materials are avail­
able and could easily be processed into finished
products. We can cover the entire value chain in
­“No wahala” with Siemens
This short film tells how the Geregu II power plant, built by
Siemens, helps deliver 434 megawatts of power in Nigeria.
Scan the QR code or open the following link:
siemens.com/energy-channel/geregu-2
Nigeria, from planting, cropping, mechanized
farming, and harvesting to processing and stor­
ing. All of this can be achieved with a stable and
reliable energy system. Industry will grow, but at
the same time, small and medium-sized enter­
prises will mushroom as well. We’ll see barber
shops, hairdressing saloons, vulcanizers, peo­
ple doing all kinds of things all over the country.
We have seen that happening within only a few
weeks in places where we started providing
­energy, so you can imagine the effect on a big
scale. Power will give our people economic se­
curity, and that will guarantee national security
for us as a country. Because if we have economic
security on account of having enough power, it
will put young p
­ eople into work.
Nigeria faces a powerful future. I believe that
50 years from now, Nigeria will be one of the
world’s top economies. It will be a country where
our children will want to live, they won’t want
to move elsewhere. It will be a country where
people from all over the world will come and
want to live, too, and it won’t be divided, but
united and very strong. And it will have one
of the largest populations in the world, of course.
Nigeria will be the place to be – in ­Africa, but also worldwide. Power will make us powerful. p
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