Governor Rotimi Amaechi
In terms of job creation, Nigeria cannot be said to be doing it right in any way. As thousands of young school leavers are churned out by the nation’s tertiary institutions every year, the problem of unemployment and the attendant socio-economic problems have continued to threaten the nation’s match towards industrialisation and development.
However, industrialisation and development come on the wings of adequate and stable power supply as all industrial processes depend on stable and cheap electricity supply. Indeed, without exceptions, all developed nations rank high on the efficient power supply index to underscore the correlation between development and power supply.
Nigeria is, however, lagging behind in the areas of industrialisation and development in the face of the epileptic and erratic nature of power supply which has not only undermined efforts at operating industrial machines but has also increased the cost profile of the real sector.
Independent Power Projects
The problem was confronted headlong by the administration of former President Olusegun Obasanjo in 1999 when the deplorable state of the power sector and the attendant power outages across the nooks and crannies of the country had reached an alarming proportion. The consequent launch of the National Independent Power Plant (NIPP) project shortly after its inauguration in 1999 led to the establishment of several power plants across the country.
From the available statistics on the power crisis in the country, it is clear that a lot has to be done to generate and distribute the estimate power requirement to support and promote sustainable national development. According to Renaissance Capital, a global investment company and research firm, the peak electricity generation supplied by the Power Holding Company of Nigeria (PHCN) is just 3,804MW for a population of 150 million people, compared with the 40,000 MW capacity for South Africa, which has a population of 50 million people.
Between 1999 and 2007 when the Obasanjo administration exited office, a conservative public expenditure profile of $16 billion was said to have been incurred on the power plants to increase power production, stabilise power supply and promote economic activities.
Independent CNG Plant (Rivers) and Skye Bank Plc One of the financial institutions, which have shown readiness to key into the ongoing power reforms is Skye Bank Plc.
The bank has been a prominent player in project and infrastructural financing over the years, helping corporate organisations, individuals, local, state and the Federal Government to fund some of developmental programmes which have direct and beneficial impact on the people. The bank’s intervention cuts across all sectors and there are memorable footprints in this regard.
The Independent Compressed Natural Gas plant project in Rivers State is one example of a beneficial partnership between Skye Bank Plc and a private sector player in Port Harcourt for the supply of Compressed Natural Gas (CNG).
The company’s scope covers deployment of gas processing facility to clean and compress gas, before conveying CNG in specialised trucks to proximate market places; construction of mother and daughter stations at owner’s site and client’s site which is used to transport gas from a gas node to client’s site.
The gas produced can also be used to power cars thereby ensuring a greener means of transportation. The project is in conjunction with the international leading Engineering Procurement and Construction (EPC) company and it is a pioneer project within the region.
Skye Bank Plc is the lead financier/banker of the project. In addition to providing funds for the project, the bank also provides advisory services. The bank believes that the project is a turning point in the history of Rivers State as Nigerians will have access to low cost, long lasting energy for industrial and residential users, as well as a cleaner and healthier environment. According to officials of the bank, it took the decision to partner with the company because of the bright prospects it holds and the multiplier effects it will have on the economy.
The bank believes that the project will revolutionise the manufacturing and transportation industries because of its confirmed potentials and benefits to these sectors. The project is also in line with the government’s objective of making available to Nigerians the benefits of sustainable energy, which is the only form of energy that is long lasting, nature and environment-friendly as opposed to organic fuels.
Head, Corporate and Strategic Planning of the bank, Tajudeen Ahmed, said, “We understand the challenges of the industry and investment opportunities that exist in it. Our broad transformation strategy supports meaningful partnership with government agencies and institutions to execute their primary mandates”.
The aim is to attract foreign investments into the state’s economy. When the project is completed, it is expected to provide gas to power several industries in the state and boost their output. This increase in output is expected to lead to greater revenue for the affected companies and in turn enhance their ability to generate employment and increase their capacity.
In addition, the project will greatly reduce the incidence of gas flaring which is prevalent in the area and help in conserving the nation’s stock of gas which can be harnessed and processed for domestic and industrial uses.