Adesina: Electricity Must Be Correctly Priced to Attract Investments in Power Sector

The Group Managing Director of Sahara Power Group and Chairman of Ikeja Electric Plc, Mr. Kola Adesina in this interview, sheds light on the investments and other efforts being made by the group to deliver sustainable electricity to Nigerians. Adesina also said the ongoing review of the service-reflective tariff must produce correctly priced electricity to attract more investments in power sector, amongst other issues. Peter Uzoho presents the excerpts:

What is Ikeja Electric doing as regards mitigating the risks created by the inconsistency in electricity pricing in the country?

The answer to that is very straight forward because in Sahara – our power entities, Egbin, IE (Ikeja Electric) and First Independent Power Limited (FIPL), always conduct scenario planning and scenario planning simply means that we anticipate all likely possibilities and put in place a programme, process and strategy to deal with such eventuality. Thankfully, we are not caught napping. We are quite aware that this might happen, and it has happened. So we are absolutely prepared to continue to steer the organisation in the right path to achieve service excellence, enhanced productivity and sustainability. For us, it is not just being in existence that matters, it is being able to deliver the promise that we have made. For us, we believe our role in the electricity value chain is akin to having signed a service contract with all our customers to ensure that they have electricity and that we will ensure that we do. We are investing massively as we speak today in network expansion and ensuring that the lines that need to be upgraded are strengthened. We have equally given additional contract to partners involved in handling production of meters for us. We signed about N11.4billion for the purpose of metering our customers using intelligent tools. And if you equally pay attention to some of the things we are doing with regards to the premium bilateral power initiative, which we started in Magodo, Ikeja GRA, Ogudu and other locations, it is an initiative that is receiving endless commendation. The service-based tariff regime of this administration is a product of our own experimentation in Ikeja Electric, and that is why you see that they have now isolated and segmented customers along the line of those who have the capacity to pay and then ensuring that they are paying.

You spoke about investment, apart from the investment you are making in metering, can you tell us the total investment you are making in your network?

As I said, we are investing in metering. Before then, you remember we had done $44million of investment in advanced metering infrastructure, which primarily is to integrate technology and innovation into our own way of doing business. So, we are doing network optimisation, we are doing more of operation upgrade as well, and most importantly, we are equally teaching our staff the new ways of doing things. If you use the old model of doing things, you definitely will not get the type of result you expect to see. So, part of what we are doing presently is to ensure that the capacity to deliver is equally a training process that we have inaugurated. Now, there is something you can’t teach, and that’s passion. The passion of our staff lately, of which we measure regularly, is quite impressive. They deliberately and intentionally want to make things better, because ultimately, if there is electricity, that is when they can truly go to bed and rest. But today, we don’t have enough.

Talking of the back and forth, particularly on service reflective tariff, and the extension of the suspension by one week, where do you see the ongoing discussion heading? And do you think the outcome is something that will at the end of the day favour the investment you plan to make in the power sector?

Well, undoubtedly, where we are headed is that electricity will be correctly priced. When it is correctly priced, that will be an incentive for investment by those who desire to invest. As we speak today, we (the Sahara Power group) made our own investment based on patriotism, based on nationalism, based on the fact that we are Nigerians, based on the fact that we believe that we have the capacity to deliver on the promise of bringing energy to life in Africa. So that is at the premise upon which we made our investment. However, the commercial principle of the sector has to change and we thankfully appreciate the fact that government has come to that realisation that the resources available to state is not sufficient enough to meet all the needs of state. So, invariably, some of these commodities need to be economically priced. So, pricing electricity economically is a commonsensical thing any administration will naturally want to support. Nigeria is doing about 5000megawatts. That’s really shameful, if you ask me, for 200million people. Like I said at a forum yesterday (last Monday), Nigeria should be doing about 50,000megawatts of electricity every day. So, what will make that happen? What will make that happen is first, for you the people (journalists) that communicate with the people, to agree with us that that is the right thing to do – supporting us by ensuring that the narrative for positive development in the electricity space is supported whole-heartedly. We, on our part, ensuring that the framework to deliver that power is available and ultimately, for the consumers to pay the right price.

By November this year, power sector privatisation will be five years according to the legal document signed by the parties. What is your assessment of the sector after five years. Will you say the agreements signed between the government and the investors have been met?

Most people look at the lenses of development in Nigeria from the negative perspective, most especially electricity, and I will say without any doubt, we have actually made improvements. The kind of improvement we have made is not one that we are happy about, it’s not one we want to celebrate. But let’s call a spade a spade: we have made a significant improvement. We were doing about 3,000megawatts in 2013, today we are doing 5, 700megawatts averagely. At Egbin here, we took over this power plant doing about 400megawatts. Today, we can do 1,100megawatts and ultimately, we will be able to do the installed capacity that we met on ground. Quite a number of the other generating and distribution assets were actually well behind, now they are moving ahead. But we are not moving as fast as we should move. We should actually do more of leapfrog achievement than this incremental achievement that we are making, and the reason why that is so, is simply put, that the economic analysis of electricity is not done using the economic principle that it requires. The people staying now in Magodo, Ikeja GRA, Ogudu, the story is different. If you ask anybody living in those neighbourhood, the number of hours of electricity they are enjoying, they will tell you they are doing incredibly very well. Some of our customers in those locations today want to retire their generators. That’s the aspiration we had, where generators will become a thing of the past. So, I can say without a doubt that we have moved the needle, but we have not moved it to where we want it to be.

What steps are you taking at Ikeja Electric to enhance your employees’ knowledge on technical operations as you seek to improve service delivery?

Human Capital Development is ongoing for us at Ikeja Electric and we have a full-fledged Academy in place for continuous learning and development. Ikeja Electric Academy is an initiative borne out of the need to elevate the technical competence of our staff to deliver more value to our customers and improve turn-around-time in complaints or faults resolution. The Academy is designed to re-equip staff with in-depth knowledge of various aspects of technical operations and spectrum of services provided to Maximum Demand (MD) and Non-Maximum Demand (Non-MD) customers within its franchise network. Of course we are driven by the fact that whilst it is essential for us to ramp up metering across our network, the training academy reinforces Ikeja Electric’s commitment to our customers We are ramping up capabilities and expertise in the technicality of metering, project execution, maintenance of installations, monitoring and management of assets, to ensure all our deliverables are met. The IE Academy will operate virtual training sessions which will include classes facilitated by subject matter experts. Essentially, the virtual training will be complemented with field practical for participants, while on the job project will be carried out over agreed periods to enable hands-on application of knowledge. We also expect that the academy will develop the competence and capabilities of participants to enhance their knowledge in load assessment, use of metering reading app, meter recertification, troubleshooting, energy theft detection, proper customer classification, electrical energy meters operations and functionalities, installation of single and three phase meter among others.

Corporate social responsibility is viewed as a barometer of sorts for measuring how business impacts its stakeholders. How is this playing out at Ikeja Electric?

Good Corporate citizenship is at the very core of our existence as Sahara Group. This is evident in our unwavering commitment to promoting sustainable development across our locations in Africa, Asia, Europe, and the Middle East, reaching over 2,000,000 beneficiaries. In the same vein, at Ikeja Electric we are always delighted to be involved in the well-being of our host communities and customers through robust interventions in the areas of Health, Environment, Education and Empowerment. The Personal Corporate Social Responsibility (PCSR) platform is the vehicle with which we carry out these interventions ranging from Medical Outreaches, to donations to hospitals in the communities within our network, We also carry out constant environmental management activities such as market sanitation exercise, and we consistently partners with Corporate entities, NGO groups and communities to support the cleaner Lagos project. In recognition of the critical role of the younger generation towards building a vibrant socio-economic future for the Nation, IE remains committed to empowering and enhancing their capacity for improved learning by having various campaigns in public schools which includes ‘’Safety starts with me’’, “Light Up the Future”, ‘’Back to School’’ and “IE Book Donation” programs. These initiatives have provided positive learning support, especially to underserved communities. In addition, IE has created an annual Youth Empowerment Program. The platform is designed to empower youths with entrepreneurial skill and create opportunities for them to achieve their aspirations. This is in line with our drive to impact society and improve Nigeria youth through our various CSR initiatives, in a bid to improve their independence and assist to reduce the level of unemployment across the country. As a responsible corporate citizen, we take advantage of specific UN International days like International day of Charity, World Malaria Day, Global Hand Washing Day, Children’s Day and a host of others, to educate, enlighten and engage our publics on topical issues.

How is Ikeja Electric leveraging technology driven innovations to improve its service delivery?

I believe the world has not witnessed the level of disruption technology continues to bring to the business space. This is a positive development that Ikeja Electric keys into as innovation plays a critical role in driving our quest for excellent service delivery and driving growth across our platforms. For example, leveraging our mobile applications we pool data from our distribution assets and systems updating our customers with status of their supply, planned maintenances and information on network upgrades. Our customers can also access their energy management and usage information via our web applications and programmes. Through these platforms they have the power to manage the energy costs in line with their budgets and contribute to energy efficiency initiatives in the electricity sector. We have also leveraged on mobile and the internet to fast track metering activities across the network ensuring that our customers can benefit from the comfort of digitally aided end to end registration processes from application to procurement and all the way to actual metering. As a pioneer and leader in electricity cash-less payment services our payment channels rely on world class channel systems and aggregators making payment for electricity bills easy and seamless from any part of the world. Data and analysis is at the heart of our tech innovation drive and we believe that by relying on it responsibly, we can harness the power of programming, data science, and algorithms to build machine learning abilities across our systems. Ultimately, this positions us strategically to continue to build solutions that improve our customer experience and service delivery. The prevalent culture at Ikeja Electric challenges every employee to embrace and deploy future thinking in all our operations and processes. We are driven by a mindset that is constantly assessing the strategies of today and ensuring we have the right foundation, alignment, and preparedness to adapt in the future. Building for the future starts by setting a road map that is clearly understood by everyone and innovating as we progress to achieve continuous transformation of Ikeja Electric for powering lives and businesses in Nigeria and beyond.

How does Ikeja Electric manage its safety machinery to ensure increased protection for its employees, customers, and the public?

At Ikeja Electric, we are acutely aware of the risks inherent to our industry with respect to quality, health, safety & Environment (QHSE) and that is why we apply strong technical, operational, and organizational Initiatives to pioneer new ways of approaching health and safety so that we leave a legacy that will help and contribute to a safer and environmentally sustainable energy industry. Post the privatization exercise, we carried out a GAP Analysis on the health & safety management system which was not in existence, retrieved very few data through survey, past accident reports, Regulators’ report and annual HSE Performance reports during the PHCN period and analyzed the data to chart a QHSE course that aligns with global standards. We introduced Harm to Zero (H2O) Strategy which entails modification of traditional safety practices and deployed innovative structures with the aim of reducing accidents, establishing and sustaining a safety culture and improving business performance thereby enhancing operational excellence and business sustainability. Our innovative approach towards Occupational Health and Safety Management has won several local and international accolades and recognitions for excellent safety culture and pace setting initiatives in the Power Industry. We are delighted that our QHSE strategy continues to inspire a growing safety culture in the sector. In fact, Ikeja Electric is now an internationally registered VISION ZERO Company and continues to set the pace in the power sector, especially with the certification of our management systems to ISO 9001:2015, ISO 45001:2018 and ISO 14001:2015, making us the first organization in the power sector to attain this commendable achievement.