Thursday, 2 February 2017

Power Crisis: Manufacturers To Set Up Generating Plant. GOOD or BAD MOVE? cc @DrJoeAbah

Nigerian manufacturers have moved to overcome the setback caused by epileptic public power supply in the country by generating their own power.

To this end, they have commenced plans to set up an independent power plant to serve the interest of local industries.

The manufacturers, under the umbrella of Association of Nigeria (MAN), disclosed that they were taking this strategic step, even in the face of seeming investment challenges in the country, in order to galvanise the industrial sector and bring production to full capacity.

The director of Economics and Statistics of the Association, Mr. Ambrose Oruche, told LEADERSHIP yesterday that so much work had been done to actualise the project.

He said three areas had been identified for the project – Ikeja, Amuwo Odofin and Ilupeju – all in Lagos state, adding that the only constraint at the moment is getting a better gas price deal from government.

“We have opened discussion (for us) to be given the status of Generation Company (GenCo)  so that we can get gas at the price government sells to them (GenCos), which is about $2 as against $7 sold to other users.

“If we don’t get gas at discounted rate, our tariff will be higher than what power is sold to Distribution Companies (DisCos) and this will ultimately impact on industries who will be buying from us,” he said.

According to him, industries in the northern part of the country which make use of Low Pour Fuel oil (LPFO) are facing more challenges as the product is scarce.

MAN’s plan would materialise in the next six months; if ongoing discussion with the Nigerian Electricity Regulatory Commission (NERC) scales through, and it would then unveil a 5-Mega Watts electricity plant. This will significantly reduce the burden of self power generation on members.

It was also learnt that another initiative being promoted by MAN to boost the sector is the establishment of industrial clusters across the country.

Currently, the Association is setting up such platforms at Ibadan in Oyo State, Nnewi in Anambra State and another one at Ilorin in Kwara State, while a wind power generation infrastructure is going to be cited in Kano State.

Oruche said when all these arrangements are concluded, contribution of the sector to the Gross Domestic Product (GDP) would leap from the present 9.7 per cent to about 15-18 per cent.

The ongoing steps will not only bring industries back to full capacity utilization, but will also attract several other investments into the sector, he said.

With about 9.7 per cent contribution of the sector to the GDP considered rather inconsequential, the Association is taking bold initiatives and considering various options to raise the sector’s contribution to the GDP to about 15-18 per cent.

Speaking on the current challenges of the sector, president of MAN, Mr. Udemba Jacob, said the nation’s energy crisis had escalated cost of doing business, adding that the industrial sector is producing below installed capacity.

Jacob lamented that many operators had been forced to shut down their businesses owing to inadequate power supply among others challenges.

He said the campaign by government that industries should switch to the use of gas had not yielded the desired result because the product is in short supply.


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