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How Geregu Power became one of the best performing power plants in Nigeria – Akin Akinfemiwa

The CEO explained how they achieved this success in an exclusive interview with Nairametrics.

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The management of Geregu Power Plc earned a rare commendation from the lawmakers in the Senate, as the lawmakers lauded the efforts of the company for meeting the performance target set by the Bureau of Public Enterprise (BPE).

At the end of the just-concluded three-day investigative hearing on the power sector recovery plan, the lawmakers blamed the hiccups in the power sector to lack of coordination among players responsible for power administration in the country. But the committee submitted that only two of the six privatised GenCos- Geregu Power and Transcorp Power met the performance targets set by BPE.

The Chairman of the committee, Gabriel Suswam, said: “We have listened to presentations from the government side and the operators and we have seen that there is no alignment anywhere and that is the problem. Once there is an alignment and proper coordination, there will be sanity and progress. Out of six GenCos privatised, only two of them are performing.”

The Director-General of Bureau of Public Enterprise (BPE), Alex Okoh, said, “Geregu Power met its minimum performance target set for it in 2013, while the other four GenCos did not meet their targets for various reasons. It achieved 435mw from its 414mw at handover.”

But what has been behind Geregu Power Plc’s success considering the numerous challenges in the sector?

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The company attributed its success to its long-term investment plan, reaffirmed belief in the overall objective of the power sector reform programme of the Federal Government.

In an exclusive interview with Nairametrics, the Chief Executive Officer, Geregu Power Plc, Akin Akinfemiwa, attributed the success of the company to a strong focus in certain areas.

Excerpts:

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How have you been able to achieve this success despite all the challenges in the power sector?

We appraised the investment as a long term play, reaffirmed our belief in the overall objective of the Power Sector Reform Programme of the Federal Government and we set out our plans accordingly. Our success is therefore
primarily hinged on a strong focus in the following areas:

1. Meeting and exceeding the goals of the privatization exercise to ensure that the private sector is seen to be capable in the operations of the power sector.

2. Motivating our people to ensure that they deliver the afore-mentioned goals and objectives. Our main challenge here was changing the culture of the organisation and people from that of a public service institution to a private enterprise with a service-oriented culture.

3. Prudent management of resources with special emphasis on financial engineering to effectively manage the lingering liquidity squeeze in the sector.

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4. Maintaining high levels of operational efficiency with investments in major overhauls and regularly scheduled maintenance programmes, as well as ensuring adequate technology transfer between our service providers and technical employees in the day-to-day management of the power plant.

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6. Effective relationship management with all stakeholders along the power value chain.

7. Strong corporate governance practices to ensure transparency, accountability and to promote sound business ethics across the entire organisation. We have a firm conviction in the long-term viability of the power sector in Nigeria and our commitment is unwavering.

Riding on this success, are there plans to expand the existing capacity of Geregu Power Plant?

As you may be aware, we inherited the power plant with an available capacity of 90MW in November 2013, even though the plant’s nameplate capacity was 414MW at the time. In furtherance of our goals and objectives at takeover, we invested the sum of 100 million dollars (USD) to carry out a major overhaul not only to ensure that the three turbines were operational at the nameplate capacity of 414MW but also to add an extra 21MW to bring the total nameplate and available capacity to 435MW. This achievement is one I consider to be a short-term strategy.

In the medium-term, we are in the final stages of completion of the front-end engineering design (FEED) aimed at converting the existing simple cycle infrastructure to a combined cycle plant by installing a steam turbine with a capacity of 300MW to take the current configuration to 735MW. Our medium-term strategy is also focused on expansion through the acquisition of existing power plants in other locations in Nigeria. We are also watching key developments in renewable energy and have the establishment of solar and wind power in our purview, as a company focused on providing sustainable energy to Nigerians.

The world bank just approved a $750m financing capacity for the power sector. How does this help Geregu in achieving its medium to long term goals of 2 above and exceeding privatization goals?

This is a very welcome development and it is very encouraging to see that the Power Sector Recovery Plan (PSRP) is being taken seriously as the World Bank had set conditions for the Federal Government to achieve before approving this initial amount. For Geregu Power Plc, the World Bank financing will eliminate or reduce the liquidity crisis in the sector, which means that all GENCOS including Geregu will get paid in full for power dispatched to the grid and this will give us access to more funding for our expansion plans.

Furthermore, when the entire sum is fully approved, a portion of it will be channelled to the expansion of the national grid to reduce the incidences of stranded power. The funds will also be used in reducing electricity distribution losses. The World Bank financing is without a doubt, a significant step in creating a self-sustainable power sector devoid of the Government’s payment interventions. This will ultimately translate to sustainable power for Nigerians in the near future and foster the much-needed investor confidence in the sector.


Last year the Chairman of Geregu Power Plans, Billionaire investor and businessman, Femi Otedola, revealed plans to shift focus to power generation with a planned investment of up to $1 billion into Geregu Power Plc. The purchase of Geregu was done in 2013 during the power sector privatization, under Amperion Power Distribution Company Limited which is a subsidiary of Forte Oil Plc. After the acquisition, $94 million was initially invested in the power plant. In 2018, another $350 million was pumped into the plant. Otedola said the acquisition/investment is demonstrative of his commitment to the Federal Government’s power sector recovery plan.

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The company reportedly generates annual revenue of $41 million.

Abiola has spent about 14 years in journalism. His career has covered some top local print media like TELL Magazine, Broad Street Journal, The Point Newspaper. The Bloomberg MEI alumni has interviewed some of the most influential figures of the IMF, G-20 Summit, Pre-G20 Central Bank Governors and Finance Ministers, Critical Communication World Conference. The multiple award winner is variously trained in business and markets journalism at Lagos Business School, and Pan-Atlantic University. You may contact him via email - [email protected]

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Energy

FG to deliver 1 million vehicle conversion to autogas by end of 2021

The FG’s Autogas programme is expected to deliver at least 1 million vehicle conversions by the end of 2021.

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FG to deliver 1 million vehicle conversion to autogas by end of 2021

The Federal Government has revealed that its Autogas programme is expected to deliver at least 1 million vehicle conversions by the end of next year.

The implementation of this programme by the government will herald the clean energy transition for Nigeria and the delivery of cheap transportation.

This was disclosed on Sunday, November 29, 2020, by the Federal Government via tweets on its official Twitter handle.

READ: 25 million Nigerians to pay N4,000 monthly for solar power system

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READ: N75 billion Nigerian Youth Investment Fund to be rolled out before end of October – Minister

The rollout is the culmination of the resolve of President Muhammadu Buhari-led government to deepen domestic usage of natural gas in its various forms. It is also in line with the government’s plan to make gas the first choice source of cheaper and cleaner energy for Nigerians in their personal and industrial use.

(READ MORE: FG gives reasons why it is repackaging its social intervention programmes)

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The government also stated that there will be a commencement of formal dispensing of Autogas (CNG and LPG) products at two NNPC retail stations.

In addition, there will be a handover of CNG-powered mass transport buses to NLC, in fulfilment of the agreement during recent negotiations. This agreement was reached with labour during negotiations and in recognition of the role organized labour plays in the quest to bring relief to ordinary Nigerians.

READ: Cornerstone Insurance Plc projects PAT of N537.4million in Q1 2021

What you should know 

Nairametrics reported in September that the Minister of State for Petroleum Resources, Timipre Sylva revealed that Nigerians can now convert cars using petrol to gas, which is cheaper, with effect from October 2020.

The Department of Petroleum Resources also ordered 9,000 filling stations nationwide to begin the installation of facilities for gas products.

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READ: PIB may be passed by first quarter of 2021 – Sylva

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In October, the Federal Government estimated that the Compressed Natural Gas (CNG) will cost N97 per litre, as it had promised to provide alternatives to the Premium Motor Spirit (PMS), otherwise known as petrol, for poor Nigerians.

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Energy

25 million Nigerians to pay N4,000 monthly for solar power system

25 million Nigerians will be expected to pay about N4,000 monthly over a 3-year period to benefit from the FG’s Solar Power Naija project.

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US-based solar company to invest $300m in Nigeria, 25 million Nigerians to pay N4,000 monthly for solar power system

The Presidency has disclosed that an estimated 25 million Nigerians that will benefit from the Federal Government’s Solar Home Systems which is expected to commence this week will be expected to pay about N4,000 monthly over a 3-year period.

According to a report by the News Agency of Nigeria (NAN), this disclosure was made by the Senior Special Assistant to the Vice President on Media and Publicity, Laolu Akande, through a statement on Sunday titled “25m Nigerians to own 5m solar systems at N4, 000 monthly.”

READ: Ikeja Electric tops with 10.7% approved meter allocation – NERC

While giving further insight into earlier reports that the Federal Government will from next week commence the process of installation of 5 million solar-home systems in underserved and off-grid communities across the country, Akande said the solar programme nicknamed Solar Power Naija, whose installations would start in December, is being implemented by the Rural Electrification Agency.

The Presidential media aide who pointed out that the programme was designed to boost ongoing efforts to fix Nigeria’s energy supply challenge, also said that priority would be given to Nigerians residing in rural areas and urban settlements either under-served or cut off the national grid.

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(READ MORE: World Bank approves $2.2 billion loan for Nigeria)

He said an important aspect of this scheme is the option of outright ownership by beneficiaries at a cost ranging from N1, 500 per week to N4, 000 per month depending on the capacities for the 3 years.

He noted that that the arrangement allows as many as 25 million Nigerians to own personal solar systems in their homes.

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READ: FG delivers 100 KWP Solar Mini-Grid to serve off-grid community in Ogun State

He added that, as indicated in the Economic Sustainability Plan, the 5 million connections initiative is a private sector-led electricity access acceleration scheme to be facilitated by a low-cost loan facility from the Central Bank of Nigeria and implemented by REA.

Akande said, “The programme will include the assembly or manufacturing of components of off-grid solutions to facilitate the growth of the local manufacturing industry. In view of the scale of materials required, solar equipment manufacturers/assemblers will be incentivised to set up facilities in Nigeria, thereby offering additional job opportunities to Nigerians.’’

READ: Nigeria’s inflation rate to moderate by first half of next year

“In addition, installation, servicing, and payment collections are expected to provide thousands of other jobs. In all, at least 250, 000 jobs will be created.”

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Optics: If religiously implemented, this will help provide affordable energy to the under-served Nigerians in rural areas with the objective of improving social, economic, and environmental welfare of 25 million Nigerians while generating jobs, increasing revenues, and import substitution.

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READ: FG set to create at least 5 million jobs for youths in the power sector – Minister of Power 

However, the fear is whether this will go the same way as other government’s programmes or initiatives in the past.

Explore Data on the Nairametrics Research Website

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Energy

Transmission company of Nigeria gives reason for nationwide blackout

Following the current nationwide blackout, TCN has stated that it has started the process of restoration to the national grid.

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The Transmission Company of Nigeria (TCN) has on Sunday announced that the current power blackout in the country was due to multiple trippings.

According to a report by Vanguard, General Manager, Public Affairs, TCN, Ndidi Mbah, who made the announcement through a statement said the company had started the process of restoration to the national grid.

Mbah pointed out that the places that power is yet to be restored were Calabar, Makurdi, Jos, Gombe, Yola, Ugwuaji and Maiduguri axis.

She stated, “The Transmission Company of Nigeria (TCN) regrets to inform electricity consumers nationwide that at 11:25 am today, the nation’s electricity grid experienced multiple trippings, which led to the collapse of the system.’’

“TCN has since commenced grid restoration; power has been successfully restored to every part of the country, except Calabar, Ugwuaji, Markurdi, Jos, Gombe, Yola, and Maiduguri axes. The effort is however ongoing to ensure full restoration nationwide.”

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“We regret the inconvenience this has caused electricity consumers. Investigations would be conducted to establish the immediate and remote cause(s) of the multiple trippings as soon as the grid is fully restored, considering that the grid had been relatively stable in the last couple of months.”

What  you should know

At around 11:25 pm on Sunday, November 29, electricity supply to most parts of the country was disrupted as the national electricity grid experienced multiple trippings.

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