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00:00Nigeria's Minister of Power Adebayo Adelabu has announced plans to expand the national grid
00:06by an additional 150 megawatts of power before the end of this year, following the completion
00:12of phase one of the Presidential Power Initiative, also known as the Siemens Project.
00:17Oti Komeisi of Puritan Energy joins me now to discuss Nigeria's power grid infrastructure
00:22and journey to sustainable power supply. Oti, thank you for joining us today.
00:27Thank you, Esther.
00:30Let's start with your initial reaction comments to this pronouncement by the power minister.
00:40Okay. The Siemens Presidential Power Initiative
00:46project has now brought in, I think, a total of 10 substations and 10 transformers.
00:53And the idea is to expand and stabilize the grid. Unfortunately, we've had 12 grid collapses or
01:00partial collapses this year. So there are baby steps, and the minister indicates that we'll
01:09make – we'll get an additional 150 megawatts from this pilot phase. However, a few months back,
01:16we were actually expecting to end up at about 6,000 megawatts from the 4,000 or 5,000 megawatts.
01:24It should have been under 1,000 to 2,000 megawatts. So on that score, we are way behind
01:30the expectations. The project itself continues to be very slow. Yes, the German president was in.
01:38President Bollah Ameitinibu met with the chancellor in COP28 and earlier on in Germany,
01:47and before that President Buhari. But the whole initiative continues to be very, very slow.
01:52We continue to have grid collapses. So I think right now we need to have a senior technical
02:00advisor, a consultant specifically on transmission to work jointly with the presidency and the minister
02:05of power to address this issue. We've been doing the same thing for too long, and we're not getting
02:09the progress to expect. Right. I mean, speaking about transmission, where are conversations
02:14around decentralization? I mean, the issue around the TCN, and of course, we have the electricity.
02:21We had that bill. We have states now having the power to generate their own electricity. I mean,
02:27I knew that that – it would take a while, some time, to get the whole framework,
02:32regulator, and all of that up and running first before things can take shape. But what are your
02:37thoughts on that first, and also to what can we do, what can the government do as an immediate –
02:43in the immediate term to address this grid collapse issue?
02:50Yes. We've come up with the Electricity Act 2023 and updated in 2024. So close to 10 states now
03:00have ability to regulate the electricity markets. But as I've mentioned previously,
03:06electricity is a very capital-intensive business. It's not for the chicken-hearted or faint-hearted.
03:13And yes, while the states might have regulatory autonomy, but do they have the
03:23abilities and people have the misguided impression that the states are actually going to invest?
03:29We have states that are having challenges meeting their salaries and their emoluments,
03:34so where are they going to get this funds from? So basically, they will create the environment.
03:40Lagos State has taken a very good – a very good step in this regard. An important step in the
03:45Lagos State regulation is that all existing arrangements and laws will continue, because
03:51there's a huge issue of subsidies at the federal level, and the states are not going to be able to
03:56take this up at the subnational level. So this remains a key challenge. But yes, in terms of
04:04off-grid, smaller projects, the state – the regulation is a step in the right direction.
04:11But we must be aware a country like India has actually gone the other direction. Rather than
04:16decentralizing, they have one national grid. So we think they'll have the erroneous impression
04:21that having multi-forest grids is the solution. It's partial, but I don't think that
04:26is necessarily the slam dunk we're looking for.
04:29So we need something tailor-made for us. So what does that look like on the ground?
04:36Yes. There are three important things for the electricity market. One, we need to have
04:42regulatory certainty, we need to have commercial viability, and then we need to have technical
04:50assurance. In terms of regulatory certainty, an important development happened this year,
04:55late this year. It's not been well publicized, but the government – sorry,
05:01NEC renewed the license of NBET for three years. So the central trader, bulk trader license was
05:08renewed for three years, though that is for legacy transaction, because the generators and the
05:13transactions dealing with NBET need to have a counterparty, and that is important.
05:20In terms of commercial viability, the introduction of the Band-Aid tariff,
05:24which I was talking about before, is very vital. It is painful for all of us,
05:28but at least it gives the commercial tariff that enables investment. Where we are having
05:35the weakness is on the technical side. So it is still around the grid, so like I mentioned,
05:40we need – we are not satisfied with what is happening at TCN and even with the presidential
05:48power initiative. So at the national level, a senior technical advisor immediately on transmission
05:55and perhaps also on gas and power needs to be put in place, appointed, reporting jointly to the
06:01presidency and to the minister of power. And then we need to continue the process of the PPI
06:08on an accelerated basis, the Siemens project. All right. We have about a minute left. Just
06:12wanted to get your thoughts on the electricity subsidy that we are still paying. $2.4 trillion
06:18now is what the federal government said it expects to – that it would have paid by the end of this
06:23year. Going into 2025, is this something you expect to continue? The government does not
06:28want to continue this. What does that mean for consumers? Unfortunately, some elements of it
06:36will have to continue because the Band-Aid tariff are paying the commercial tariff,
06:41but the bands B, D, C, and E are paying – are being subsidized. And elements of this have to
06:50continue because we have to give some cushion to the less privileged in society. So some elements
06:55of that will continue, and I will recommend it continues at a federal level. Even when the states
07:01take over, there has to be clear arrangements between the federal government and the subnationals
07:06on how you manage this. We need to have a transition that makes sure that our citizens
07:11are able to have access to electricity. All right. Oti, thank you so much for talking
07:15to us today. We appreciate your time on the show. Oti Komise, CEO of Proton Energy,
07:20looking at the latest developments in Nigeria's energy sector.