NORTHERN PACIFIC GLOBAL INVESTMENT SERVICES
Nigeria Power Sector Reboot 2.0
Executive Summary
The Nigerian power sector is bedeviled with a stunted capacity in power generation. A strategic methodology that was innovated from diligent analysis of the socio-economic and engineering landscape of Nigeria has been developed by Northern Pacific Global Investment Services (NPGIS). The NPGIS solution – bundled as a compendium of strategies, action plans, steps and guides – socially engineers a pervasive industrialization of the power generation sector through a systematic fusion of observed population attributes, economic patterns, social norms, engineering culture and government policies.
The plan, termed Reboot 2.0 shall totally advance the Nigeria energy generation capacity to above 100,000 megawatts within five years through a concomitant of practical steps within the mandate of the Ministry of Power. It is designed to avoid situational assumptions as conditions to actualizing any of the steps. The approach is to posit steps on tangible realities, thence satisfying the condition for practicality and successful realization.
Evidence-based approach is used to create justification for how Industrialization can be achieved from the current social and economic constructs in Nigeria. The Chinese experience is used to explore historical similarities, while Nigeria historical and current antecedents in abstract social and economic choices is used to spotlight affinities for industrialization of the Power Generation Sector from within Nigeria.
In summary, it is strongly suggested that the Ministry of Power partner with NPGIS as a Strategic Industrialization Consultant towards the achievement of a truly National Mission.
Historical Antecedent of Nigeria Public Compliance to Investment Offers.
Literature is filled with history of how mass euphoria from well-crafted campaign have sparked economic changes and macroeconomic value addition. It shows how public interest and behavior instigates and enabled economic and industrial revolutions in different parts of the world. Recorded history has shown a particular commonality among all the major industrial advancement and economic leap that has occurred in history. That common feature is the broad participation of the people. At times it is planned and sometimes it occurs inadvertently. To measure the ability of a social, economic or industrial change occurring it is important to gauge how responsive or docile the public are to similar economic and technological investment instruments within the present living memory.
In the West, it is well documented how historical events like the gold rush, telegram, railway expansion, etc., positively influenced economic and industrial advancement because of public interest and participation at all levels of the service chain.
The Nigerian experience and study of how ripe the populace is to the pervasive and euphoric subscription of an economic vehicle that are above the level of sole-tradesmanship will be done by investigating history for recorded examples. Examples that demonstrate the ability of the plan to work in Nigeria and proofs the appetite of Nigerians for high-end investments include:
- The 2004-2008 bullish run of the Nigeria Stock Exchange.
- The pre-consolidation era of the Nigeria Banking System.
If the consolidation of the banks had started from nothing, it would have failed. It would have pitched the regulators against the operators and created a toxic atmosphere of disrespect; where the operators see themselves and operate as if they are indispensable, the regulators would feel undermined and probably lack a superior experience to base their regulatory framework.
In the case of the banking sector, it is the regulators that berthed the operators and thus the operators are a creation of the regulators policy, strategies and actions.
The power sector is presently experiencing the reverse, where the operators did not metamorphosize out of the direct control and purposeful actions of the operator. It stems out of the means in which the operators emerged and their position in sector, as extreme risk bearers, whom the regulator must not toy with. This perception of risk averseness is ingrained firmly in both the regulator and operators and enshrined in rigid and toxically opaque procedures and requirements for participation as an operator.
It lays credence to the postulations that consolidation is a next step to deregulation and not a bootstrap strategy to filling a void and absence of ability. Unlike the banking sector, the power sector has never experienced deregulated management and practice and thus cannot in any real sense have the capacitive resource to build a consolidation-styled operation like it is currently doing (foisted on it by past policy). The result is vacuum and dearth of resources and investment along the value chain of the sector. That is what we are experiencing at the moment, with just meager 10,480MW of installed capacity for all power stations in the country, manifested through 35 power plants. Compare with the USA that have attained l,074,000MW installed capacity, generated through 8195 power plants.
In the early turn of the century, the Nigerian stock market witnessed a persistent bull ride, flanked by escalating gurgles and bubbles up to 2008. Despite its miniature stature compared to its counterparts the world over; the Nigerian stock market proved to be one of the most efficient in terms of profitability as it posted one of the highest annual returns in 2007. Investors, regulators, market analysts were all pleased with this development. The Nigerian Stock Exchange (NSE) All share index grew from 5672.76 on January 2,1999 to 58579.77 on January 2, 2008, a 90.3% increase. The market hit a new high on March 5 2008 when the NSE All-share index hit a record of 66371.20 points or an increase of 1070%. The implication of a year-end return of 74.8 percent was that all stocks invested in the Nigerian market posted a cumulative of 74.8 percent return on investment during the year. Attributable to the surge in investment attitude were the preceding robust reforms experienced in the Nigeria’s financial landscape. The surge has been attributed to investors’ buying behavior rather than by genuine, fundamental information about value. The behavior was a manifestation of confidence in government reforms and trust in the signals of regulators handling of the capital market. It inherently establishes the Nigerian investors strong appetite for abstracted tertiary economic products and its belief in systems that are well branded.
The subsequent disastrous crash of the stock market was caused by a combination of factors which included bad regulations and a problematic perception that afflicted regulators and twisted their relationship with operators, thus leading to abrupt loss in confidence and the ultimate catastrophic collapse of the stock exchange. NSE rise and fall is a historical example of how regulation shapes the growth or demise of a sector or economic blueprint. Reboot 2.0 shall x-ray the impact of regulations in the sector and strategies for implementing and defining regulations to achieve rapid industrialization of the sector.
REBOOT 2.0 EXPLAINED
The power sector reforms, which is termed the power reform 2005, assumed that investors will be readily available. It assumes investors as a readily available commodity, with an unmeasurable demand for the electricity industry. It underrated the challenges and magnitude of the existing challenges. Such misrepresentation of strategy leads to privatization been viewed as an end onto itself. The structuring of the privatization into GENCO’s, DISCOS, TCN, etc., was just a procedural requirement to create order and administer regulations – a regulation that inadvertently became restrictions inimical to productivity and growth.
It did not go its way to determine if investors will be available, neither did it build strategies for getting investors and resources. While a quasi-privatization was achieved, deregulation and democratization were missing in the reforms and implementation.
REBOOT 2.0 is a rebuild that proposes to achieve deregulation, democratization of the sector and total energy emancipation for Nigeria and project the Nation as one of the most energy abundant nation on earth. It relies on an advantage already created by the power challenges – Power Consciousness of the Masses. The masses of Nigeria are among the most conscious and energy-aware population on earth. The observation are the result of studies, commissioned surveys and research by NPGIS on investment strategy for the power sector. An observed phenomenon was that rather than creating a culture of aloofness and care-free-ness within the population, the power challenges sharpened the sensitivity of the population towards the power sector and it continues to dominate the social discourse, even assuming a level of myth and mysticism in society. With this level of awareness, it remains very easy to pivot social action, nucleate investment gregariousness and build a power generation investment-hungry population.
In our proposed Reboot 2.0, an important focus of the ministry and its subordinate parastatal shall include:
J creating mass encouragement guidelines.
I/Vhot then are the potentials and means for democratization and deregulation of the power sector in Nigeria?
In bridging the technology gap and lacuna in industrial capabilities for the implementation of a holistic power generation strategy as proposed in this document, the sponsors of this document have identified an empirical solution which is reproducible and reliable for bridging the gap. The solution involved identifying the “complexity index” (CXI) for funding and manufacture of every component part within the Nigerian Shores, taking stock of the technological exposure of the Nigerian engineering sector. The sponsors (NPGIS) considered the trajectory engineering exposure recent engineering activities like the part assembly of the Egina FPSO offered the Nigerian engineering community and the corresponding growth of skilled Welders, International Welding Engineers, PWHT professionals, NDT professionals, foundry engineers, calibration engineers, fitters, certified CNC and manual process machinists, industrial electricians, pattern makers, structural engineers and CAD Design engineers.
The complexity index was used in identifying solutions and strategy for the development of turbine manufacturing capabilities among equipment manufacturers in the country. The knowledge gap and blend of training needed to develop operators in the various production units for the components were identified by the document sponsors. This include training of operators in machine programing techniques, training of engineers in material properties of commonly used materials in the power generation sector, preparation of short instruction guides and reminders, include rule-of-thumb, etc.
Our research indicates that most professionals in the Nigeria engineering community make effort to learn new methods and breach their experience gap for new processes through research and search on YouTube. The research used a combination of questionnaires and investigation of online searches for work-based task terms from Nigeria. The research shows that they are very open to adopt methods from authoritative sources that they can relate to. Thus, this is an avenue for the Ministry to control and disseminate technological methods to a greater audience.
The Ministry of Power is advised to commission reputable experts to develop process videos and animation for all the aspects and components manufacturing in the power generation sector. The videos shall include audio in various local languages and the use of rule-of-thumb and simple flowchart model in teaching decision making and process monitoring.
NPGIS can train the ministry staff in the process of procuring the services of qualified
experts for all the identified technological fields necessary for industrialization of the power
generation sector.
Similar actions are implemented by energy regulatory and administrative bodies in the Western and Asian countries. It has even been observed that some of these nations implement access control strategies (like IP restriction) to restrict foreign access to the technological information they provide to their citizens.
The cost of implementing the proposed e-learning systems are very considerate, since all activities in this document are done out of a preconception of “management of scarce resources”. The services are partly packaged as community services by governmental and non-governmental entities with funding from existing educational trust fund, a special trust fund and fundraising to be instituted by the Ministry. This removes the budgetary burden the implementation of e-learning scheme might have placed on the ministry’s tight federal allocation if it were to be funded fully by the ministry. Northern Pacific in partnership with other technical partners have developed a full roadmap for the total implementation of the e-learning scheme fortraining of working and non-working professional in the power sector to achieve the industrialization target.
The CXI analysis indicated that Nigeria already has the industrial capacity for the pervasive manufacturing of low-cost turbines and generators that can satisfy the national energy needs and that of the entire African continent. With the implementation of the right strategies as proposed throughout the remainder of the documents, this capability will be blended with the peculiar robust commerce and trade characteristics of Nigeria to develop a prolific industry that will serve the energy needs of Nigeria and make inroad into Africa by capitalizing on the recently signed AfCFTA. The
document will explore all strategy for manufacturing of turbines at 25% of the quoted procurement cost for the average Chinese Turbine Manufacturer, taking data from the Gas Turbine World (GTW) and publicly available contract bidding quotations. We shall demonstrate that through a series of strategic policies and implementation the Ministry of Power shall develop Nigeria into an Energy Industrial Nation with capitalist benefits to the Nigeria population.
INDUSTRIALIZATION OUT OF THE CURRENT SYSTEM
As previously noted, the government engaged in a privation process for the power sector but what the sector needed was industrialization, and not privatization. Privatization should have been a means in achieving industrialization.
Industrialization should be adopted because the economy-of-scale and social drive, generated from industrialization would have overcome the monetary requirement of achieving energy liberation.
Industrialization uses a combination of five resource components to achieve its desired outcome. The components are: land, capital, labor, connections and technology. When these components are purposefully joined together, rapid industrialization is created and swells until the demand is satisfied. The demand already exists and continues to exist because it cannot be satisfied through imports from the far seas.
The Ministry can create the environment for all these components to interact and cause industrialization of the power sector.
At present, none of these components are being superintended by the ministry because of a lack of cognitive appreciation of the nexus between industrialization and the power sector. Industrialization accommodates the perilous realities of the national economy as it is a self-improvement entity, able to grow from available resources and capabilities into groundbreaking abilities and achievements.
Our services to the Ministry of Power is to:
J Train staff of the Ministry of Power on the relationship between industrialization and development of the power sector.
J Train the ministry staff and subordinate parastatals on Practical steps in achieving industrialization of the power sector.
J Support the ministry in revising existing regulations to make it easy and entrepreneurial friendly.
J Support the ministry in meeting a benchmark of making the power sector the most entrepreneurial friendly sector and overtake the ICT sector as the sector with the largest number of entrepreneurs in the country.
J Guide the ministry in instituting a policy of 15minutes as the time to obtain an electricity generation permit, irrespective of the size of the generation station.
J Completely implement the license process online and within 15 minutes.
Among questions posed to the Ministry for which we shall provide answers as part of a Consultancy agreement between NPGIS and the Federal Ministry of Power shall be:
how much energy can be produced in any given location and from what sources can it be generated?
What sites are most suitable for the siting of power generation stations as part of the proposed industrialization plan?
What is the energy potential of Nigeria? This relates to how much energy can be readily
generated from available resources and their effective combination? The energy will be
ascertained as part of the findings of this document.
Objectives and outcomes of the proposed Strategic Services
Complete democratization of the power generation sector of Nigeria. Total participation of all grades of investors – quasi, mainstream, technological, local, primordial, everyone and anyone. Established and non-established forms of generation are allowed and encouraged to participate.
Institutionalization of commercial power generation as a viable source of revenue and economic prosperity for individual entrepreneurs.
Removal/eradication of stringent regulations (15minutes licensing process to own and operate a power plant).
The Nigerian Electricity Regulatory Commission (NERC) has created 35 set of regulations for the activities of operators in the sector. Most of these regulations are restrictive rather than supportive.
INVESTMENT DRIVE
Entrepreneurs will invest when they have confidence and verifiable information on what the
engineers and regulators are doing.
Just like in real estate buildings, the entrepreneur/investor knows all the components of a building. The engineer just guides them through the process of resource utilization. Even the procurement process should be within the administrative and knowledge grasp of the entrepreneur.
Unlike building which have tens of thousands and millions of investors, the Power sector needs just about 20,000 entrepreneurs of which it will be adjudged a success if it can attain a ten percent success rate out of the above quoted entrepreneurs. That figure will place Nigeria in the top five of world power generating nations. And the finesse of a pervasive industrialization is the record time it usually takes to achieve result – estimated at 3-4 years.
Educating potential investors through mass media campaigns should be the role of the
ministry of power.
Power generation brokers, engineering consultants, tutorial trainers, influencers, educators, media ambassadors and speculators will be trained and developed by the ministry through the assistance of Northern Pacific Global, who will serve as a paid sector-democratization consultant to the Ministry.
Investment roadmap, teaching aids and manuals should be available for all the different forms of power generation sources commercially possible in the country – gas, petroleum, coal, wind, hydro and solar. The materials and resources will be produced and disseminated in an investment tempting fashion across the nation.
Commercial power generation participation should be an incentivized made-easy process.
SAMPLE PUBLIC ADVERTISEMENT ON THE REBOOT 2.0 INITIATIVE
We are democratizing the power sector to allow every Nigerian to innovate and participate in the sector. Nigerians are sensitive about power than any other nation in the world. That is a potential! With a demand of100,000 megawatts and a supply capacity of3,000 megawatts, the opportunities are there for you to capture!
The people who built banks in the past are billionaires today, the families who bought land in the heart of Abuja and Lagos in the past will be billionaires for generations to come.
A new goldrush is here! Innovate and prosper! Build a power plant and own the future forever! It is simple! it is straight forward! and with social and traditional innovations like cooperatives that you are used to, you can own one! The choice is yours and it is now!
The Federal Ministry of Power under the Honorable Minister has commenced Reboot 2.0. Under the Reboot, we are repealing all colonial elitist regulations and backward era restrictions.
We are acquiring land of over 1,000,000 hectares that will be freely given to participants, we are taking the Right of Way along almost all gas pipelines and petroleum pipelines and we would give them to you!, yes you! the entrepreneur who has the stomach for this new gold rush! we are mapping lands and acquiring lands for wind turbines and solar turbines! the steps are simple, Apply, in 15 minutes you own a piece of the action including land, then build and connect to the national grid, and poverty shall never torment your generation ever! We are identifying hydro dams all for you. It is open! it is transparent, but there is a catch, there is a time window! our target is 150,000 megawatts, when we reach it, the gate of investment shall dose! Hurry now, think hard, call your friends, family, loved ones, everyone, and start planning, because it will be big with a bang but short as a burst! Is education a criterion? Well, we are building the largest collection of technological information and guide that will make building a power station as simple as building a one- bedroomhouse,itwillbethatsimple!Ifyoucandothatthenyouare in! if you
can supervise and control your engineers to do that, then you can participate! and forget the cost they tell you, it WILL BE CHEAP. Gather your resources and stay tuned for it shall be loud with a BANG!
THIS MESSAGE IS FROM THE MINISTRY OF POWER – IN CONJUCTION WITH THE MINISTERIAL REBOOT 2.0 INITIATIVE.
STRATEGIC ACTION PLAN ®
J Potential Energy generation location maps should be publicly available.
V Stories, testimonials, Radio/TV talks on how to be a billionaire and secure your generation through investment in power generation should be done by the ministry.
J The concept of SPV collaboration to fall down cost of construction will be fully documented and publicized.
J Citizens are to be primed to encourage their relations to remit funds for investment and ownership of the power sector.
J Ministry of Power shall assist by getting commitment from all 36 states governors for land-for-free to anyone who successfully registers to own a power plant.
J At the end of the 15minutes permit process, land is automatically allocated to you, and shall remain yours as long as you continue development of a power station on an ongoing basis and within the allocated development timeline.
Permit holders can choose to not participate in the automatic land allotment
The Ministry shall offer:
> Free research services.
> Free proposal template to
friends/colleagues/families in diaspora/financial institution for funding support.
- Free environmental impact assessment.
- Free Inspection and testing services.
The investment and participation guides/brochures shall assume the intellect of a Nigerian with no formal education/experience/knowledge in financial management, investment and engineering, but who has been tempted by the advert they see in the media and whom have the fund or influence to participate in the sector.
THE STRATEGIC MESSAGE:
jump in and let the power train take you
to treasure for many generations!
ENGINEERING AND COST REDUCTION POSSIBILITIES AND THE REBOOT 2.0 STRATEGY
Within China, power plants are being built for one-third to one-half of the international prices for similar plants. It is not clear whether these prices are being subsidized or whether there are other unique market factors. The fact that these prices have stayed at the same level while international commodity prices have experienced substantial increases in the last two to four years raises questions regarding their pricing structure. It is certain that labor costs alone provide China with a competitive advantage, which may be reflected in its 20-40 percent lower production costs. It is thus important to understand the factors that influenced the pricing structure that enabled the advancement and rapid development of the Chinese power generation sector. All of these power plants were manufactured within China under licensing agreements with foreign suppliers. These power plants were and are being built for 33 to 50 percent of the international costs for similar plants. Approximately one-half of the costs are estimated to be material costs. While international commodity prices have experienced substantial volatility, China’s power plant prices have remained unchanged. Available data from recent projects globally, suggest that the Chinese suppliers are bidding lower than international prices, but not as low as their domestic market. In India, their pricing is more aggressive (bidding lower than suppliers from other countries). The Chinese market entry strategy is most likely influenced by a strong domestic supplier.
The effect created by strong domestic supplier as witnessed in the Chinese analysis can be reimplemented in the Nigeria market through other means. This include utilization of alternative materials and equipment from the globally commonly accepted one. A strategy to achieve this is to list all the component parts of a power plant that cannot be readily fabricated using available incountry facilities; Scouting a combination of Patents filings, R&D papers and journals, and news report for alternative to those components in terms of purpose for the components; Shortlisting all components that are alternatives to the primary components but which are of extremely cheaper pricing and possibly has potential for in-country fabrication; Shortlist and train 10 technicians/workshop engineers each on production of each of the listed component. The technicians/workshop engineers shall be from federal universities; SEDI, PRODA, and other federal owned manufacturing plants shall be commissioned by the ministry of power to produce the critical components in commercial quantity through a compulsory buy-guarantee agreement between the Ministry of Power and the Institutes. Under the terms of the agreement, PRODA and Co shall be trained by the Ministry in the production of critical components, including employment of critical consultants.
The Ministry shall maintain a public database of all suppliers/manufacturers of listed components in Nigeria. The ministry shall also provide subsidy to the manufacturers through a subsidy rebate system(trademark) developed by Northern Pacific Global.
Components that are judged to be too time-consuming for in-country production/ too demanding for satisfactory mastery/too capital intensive to be produced by fabricators and equipment manufacturers, shall be purchased by entrepreneurs through facilitation by the Ministry. The facilitation shall involve the ministry reaching trade agreement with manufacturers in the ASEAN nations to allow them advertise their goods through the ministry approved portals as if it were incountry product. The products will be totally exempted from all tax and import duties, the components will be sold at subsidized fees predetermined in collaboration with the ministry. Northern Pacific has built good partnership with over 10,000 manufacturers in the ASEAN countries who are willing to participate in the agreement with the ministry.
TCN will bear the cost of connecting the plants to the grid as an incentive to plant operators.
The Ministry shall give advisory to prospective operators on the various equipment available and the price advantages available for each equipment type. Example include a differentiation between subcritical, supercritical and ultra-supercritical (DSC) plants.
It is possible for the Ministry to negotiate and implement agreements influential to reduction in cost of power generation without actively participating in the commercial generation of power. The agreements will be done on behalf of all current and future prospects, without any compulsion for the prospects to be party to the deals, this is how to retain a fully democratized investment environment. Additional pricing information related to metals is important because: (1) they are used directly to make pipe, plate, and structural steel; and (2) they are used to make boilers, pumps, fans, motors, and electrical wiring, and/or are a significant part of many other power plant components.
STRATEGIC CASE FOR DEVELOPMENT AND ADVANCEMENT OF NIGERIA'S INFRASTRUCTURE
Although there is a phenomenon to adopt services as the future of economic growth and integration, and that new trends and concepts are emerging that tends to promote knowledge-based economy as the future of business, such concept can only succeed where there is an infrastructural backbone to support services.
In this light, electric power availability is considered an infrastructure obtained on an ongoing basis (subscription-based) like Tax.
A nation should develop its infrastructures through the concept of industrialization, as it creates the social climate for success and eliminates the economic burden on the exchequer, drops the investment entry requirements, promotes innovation and entrepreneurial participation, and renders the technological bargaining chips used in configuration and participation in a service-based business chain.
We would show the requirements for achieving industrialization in the power sector and provide practical means for accomplishing an industrial-scale power output that satisfactorily meets the Nigerian and West African power demands.
industrialization as described in our own parlance is not modernization or the act of moving away from agriculture into a production-based economy. In our own application, it is the utilization of strategies that causes massive social attention and dividend in the participation of commercial
power generation, utilizing mainly domestically processed materials/science as the building blocks of the commercial activity.
Like historical industrialization, the aim is to notch the idea of participation in commercial electricity generation to attain a “pervasive status” and it shall self-develop into an economic colossus.
This will be achieved through the suture of several innovative products that engenders the availability of those factors that influences industrialization, notably land, labor, capital, connections and technology. These products are in several forms consisting of organizational, logistical, educational, informational, institutional, analytics, entrepreneurial, technological, social, managerial, tradition, and economic.
Identification of the products and practical development of solutions from the products, in collaboration with the Ministry of Power will be done by our Development Consulting Experts at Northern Pacific Global.
Our experts have gained years of experience in strategic consulting, industrialization strategy, engineering, macro-historical economics, mass campaigns, behavioral investment, management consulting, design marketing, IT modelling, Power Engineering, structural engineering, process engineering, macro financing, legislation, legal drafting and management simulations.
The proposed industrialization has the attributes of success peculiar to pervasive privatization, which are “tangible outputs and ownership”. Their output is electricity which is a tangible substance and not a satisfaction utility like road. They also allow private ownership of the investment without complications, allowing a transfer as a patrimony to be inherited and sustained across generations just like building. This flavor of the proposed power sector breathe life to the potentiality of industrialization of the sector.
The scale of construction of coal-fired electric generating stations is just one indicator of China’s growth. Currently, China is building the equivalent of two 500-MW coal-fired electric generating units per week, which is comparable to building the capacity of the entire U.K. power grid each year (McRae, Gregory, testimony at hearing before Clean Coal T echnology-Science, Technology, and Innovation, United States Senate Committee on Commerce, Science, and Transportation, April 27, 2007). This level of power plant construction represents an enormous demand for steel, rotating equipment, electric wiring, other electrical components, and concrete. It also results in fierce competition for shop space at steel fabricators and equipment suppliers. Further, it translates into significant demand for the raw materials needed by steel mills, equipment manufacturers,
In the institutional sphere, the separation of political and economic power, new institutions for scientific research and dissemination of its results, organization of market relations, etc., all mark the breakdown of feudal and medieval economic structures with their associated monopolies, guilds, tolls, and restrictions on trade. Perhaps the intellectual and institutional/organizational changes were indeed the most fundamental.
What are the fundamental and primary expertise needed (apart from the designs and
experience) to construct all types of power stations (except nuclear power plants)?
The Common sources of electricity generation that are most suitable for Nigeria are:
- Gas turbine combined cycle
- Pulverized coal-fired steam plant
- Oil-fired steam plant
- Gas-fi red steam plant
- Diesel generator plant
- Wind farm
- Photovoltaic array
- Solar thermal
A description of the common scope included in all cost estimates is as follows:
- Earthwork
- Concrete
- Structural steel
- Plant equipment
- Piping
- Electrical
- Instruments and controls
- Painting
- Insulation
- Buildings and architectural
The general list of items excluded from the generation plant costs estimates is:
- Switchyard
- Connection to the grid
- Pipelines outside the plant fence (as applicable)
- Access roads outside the plant fence
- Raw water acquisition
- Bonds, taxes, and insurance
- Project financing
- Customs or import duties
- Owner’s costs
- Land
Impact cf Size an Cast far Gas Turbine/Cambined Cycle?
The cost-scale factor for steam turbines is also about -0.2 (on a US$/ kW basis).
Impact cf Size an Cast far Wind Farms?
Although larger-size individual wind turbines generally offer an economy of scale, there is very little statistically significant difference in installed cost per kW for wind farms between 30 MW and 200 MW. This is likely due to the fact that larger wind farms are simple integer multiples of each wind turbine. Manufacturers may offer discounts for large orders of wind turbines, but in general, this does not offer exponential economy of scale associated with fossil plants. Variations in cost of wind projects are more likely due to previously discussed regional differences, including variations in developments costs, site and permitting requirements, and construction expenses. The overall accuracy of the plant cost estimates herein is within the Class 5 standard practice guidelines and for this study it is -20 percent/+25 percent.
Gas Turbine Simple Cycle
Simple Cycle Market Trends and Technology Description
As previously noted, gas turbines are grouped into two classes, aeroderivatives and heavyframe. Aeroderivative turbines are available with ratings up to about 50 MW. They generally have better efficiency, quicker start-ups, and lower fuel costs than heavy-frame units. Consequently, aeroderivative machines are well suited to the simple cycle configuration. They also have an advantage as peaking units because overhaul intervals are typically based on fired hours, not on the number of starts. Overhauls of turbine cores are typically performed off-site at a specialized repair facility, and lease units can be used to maintain operation while the original unit is being overhauled. The overhaul and repair cycle are well structured in the United States due to the number and proximity of specialized repair facilities. On the other hand, the repair facility “infrastructure” is lacking in many cases, and this should be considered as part of any evaluation to locate aeroderivative units in developing countries.
Heavy-frame units generally start more slowly than aeroderivatives. Inspection and overhaul intervals on heavy frame units are typically based on “equivalent hours,” which are affected by many factors, such as actual operating hours, number of starts, number of trips, number of fast ramp rates, and so forth. The simple cycle gas turbines evaluated in this study are based on natural gas. The advantages of simple cycle units compared with other power generation options are low cost, compact footprint, and quick start-up times. The major disadvantage of simple cycle gas turbines is the high operating cost due to high fuel costs.
Both types of gas turbines are sensitive to ambient temperature and suffer significant derating on hot days. The high temperature derating can be reduced by employing evaporative cooling or mechanical chilling on the compressor inlet air. Evaporative cooling works best for low- humidity operation. Mechanical chilling can be employed for either high- or low-humidity applications, but the chilling equipment is more costly than evaporative cooling.
Heavy-frame units are available up to 300 MW for 50-hertz (Hz) ratings. Maintenance costs are lower, but overhauls are performed on-site, which requires significant outage times. These outage durations can range from a few days for a combustor inspection to about a month for complete overhaul.
Gas Turbine Combined Cycle
Combined Cycle Market Trends and Technology Description
Combined cycle gas turbines are commonly used for generating electrical power from natural gas. The primary advantage of combined cycle units compared One feature commonly implemented on with other power-generation options is high combined cycle plants is the provision of efficiency; overall efficiencies of large combined supplemental fi ring in the HRSG to generate cycle units approach 60 percent on a lower additional steam cycle power. This provides a heating-value basis.
Combined cycle units can be based on both aeroderivatives and heavy-frame gas turbine technology. Several aeroderivative gas turbines are suitable as the prime mover for plants with ratings of up to about 100 MW. Larger plants will generally be based on heavy-frame gas turbines.
Large combined cycles based on “F-Class” gas turbines typically employ a reheat steam cycle and provide steam at three pressure levels: 140 bar for main steam, 30 bar for intermediate pressure steam that supplements reheat steam flow, and 5 bar for low-pressure admission. Several gas turbine/HRSG trains can be attached via manifold to a single steam turbinegenerator (STG), or a multi-unit plant can comprise independent gas turbine/HRSG/ STG trains. The manifold configuration will have a lower cost and smaller footprint, while the independent trains will have better operating flexibility since an STG outage will not bring down the entire plant.
Start-up times for combined cycle plants are highly dependent on steam turbine size and on whether the plant is going through a cold start or a hot start. Start times can range from 30 minutes for a small unit undergoing a hot start to six hours for the cold start on a large, multiunit plant.
Gas Turbine—Combined Cycle Package with Standard Components: Single fuel gas turbine (natural gas), generator, steam turbine-generator, heat recovery steam generator, starting and lube oil systems, gas turbine controls, air filter, silencer, exhaust stack with silencer, vibration monitoring, and plant control system.
□il-Fired Steam Plant
The oil-fired plant cost estimates include market demand factors and are based on the following equipment and systems:
- Steam generator and accessories.
- Steam turbine and accessories.
- Main steam and reheat steam systems.
1
- Condensate and feedwater heating system.
- Turbine and steam line drains.
- Heater vents and drains.
- Auxiliary steam and condensate return systems.
- Condenser and circulating water system.
- Wet mechanical cooling tower.
- Condensate storage and transfer.
- Plant make-up water system and service water system.
- Demineralized water system.
- Closed cooling water system.
- Compressed air system.
- Boiler chemical feed system.
- Combustion air and flue gas system.
- Auxiliary boiler system.
- Selective catalytic reduction system (Should not be a requirement in Nigeria).
- Wastewater treatment system.
- Fuel storage tanks.
- Fire protection system.
- Instruments and controls.
- Structural steel.
- Electric wiring.
- Motor controls.
Natural Gas-Fired Steam Plant
The oil-fired plant cost estimates include market demand factors and are based on the following equipment and systems:
- Steam generator and accessories.
- Steam turbine and accessories.
- Main steam and reheat steam systems.
- Condensate and feedwater heating system.
- Turbine and steam line drains.
- Heater vents and drains.
- Auxiliary steam and condensate return systems.
- Condenser and circulating water system.
- Wet mechanical cooling tower.
- Condensate storage and transfer.
- Plant make-up water system and service water system.
- Demineralized water system.
- Closed cooling water system.
- Compressed air system.
- Boiler chemical feed system.
- Combustion air and flue gas system.
- Auxiliary boiler system.
- Selective catalytic reduction system (Should not be a requirement in Nigeria).
- Wastewater treatment system.
- Fire protection system.
- Instruments and controls.
- Structural steel.
- Electric wiring.
- Motor controls.
DiESEl-GenErator Plant
Technology Development, Plant Descriptions, and Scope
Diesel-Generator Plant Description. Diesel engines differ from the previously discussed technologies in that they are of a size amenable to distributed generation. This analysis is for 1-MW and 5-MW units. Even at 5 MW, the engine is prefabricated and requires minimal engineering to be installed and begin operation. Over the past 20 years, efficiencies have improved and emissions have been reduced with refined combustion control. The reciprocating engine in this study is a compression ignition engine fired with fuel oil.
Historically, reciprocating engines have been used in standby and emergency applications, for peaking power service on intermediate to base-loaded facilities and cogeneration applications.
The diesel engine package typically provided by most OEMs consists of:
- Lube oil system.
- Radiator for cooling.
- Electric start system.
- Air intake filter.
In addition, the plant scope includes:
Fuel oil storage tank.
Concrete.
Piping.
Electrical.
Instruments and controls.
Onshore Wind Farms
Technology Development, Plant Descriptions, and Scope
Wind turbine components include the rotor blades, generator (asynchronous/induction or synchronous), power regulation, aerodynamic (Yaw) mechanisms, and the tower. Wind turbine component technology continues to improve, including the blades (through increasing use of carbon epoxy and other composite materials to improve the weight/swept area ratio); generators (doubly-fed induction generators and direct-drive synchronous machines providing improved efficiency over broader wind speed ranges); power regulation (through active stall pitch controls); and towers (tubular towers minimize vibration, allow for larger machines to be constructed, and reduce maintenance costs by providing easier access to the nacelle).
Advancements in wind turbine technology, increased operating experience, and mass production of components have driven the costs of wind power down more than 80 percent over the past 20 years. A compilation of data from the Lawrence Berkeley National Lab shows the cost of U.S. wind projects as between US$3,000-4,000/kW in the early 1980s, while the current cost of projects is between US$1,000-2,500/kW. The bulk of an installed cost is accounted for by the turbine itself, which generally makes up about 65-80 percent of the total installed cost. Civil work, including the foundation and roads, is the second biggest piece, typically making up 5-15 percent of the installed cost, followed by project financing/overhead, grid connection, and electrical installation, each of which generally accounts for 1-10 percent of the total installed cost. Last, land accounts for 1-3 percent of the total installed cost of a wind farm.
Phntavoltaic Solar
A photovoltaic (PV) or solar cell is made of semiconducting material. The two main categories of technology are defined by the choice of the semiconductor, either: (1) crystalline silicon (c- Si) in a wafer form or: (2) thin films of other materials. Typically, each c-Si cell generates together in a series to produce a module with an under toughened, high-transmission glass.
The electricity produced by a PV cell is direct current (DC) and an inverter is used to convert the electricity to alternating current (AC). Other than the PV module, additional system components include support structures, inverters, and wiring.
Currently, the crystalline technology makes up the bulk of the market sales compared to thin film. However, thin film is less expensive than crystalline and the thin film market is growing. Because thin film’s part of the market share is estimated to be around 35 percent by 2015, the study also contains a technical assessment and market discussion of the thin fi m technology.
The generation technology plant cost centers for the nine generation plant options include equipment, materials, and labor. The items listed in each subsection are not meant to be a complete definition of scope, but rather are intended to describe the highlights of the items included. The estimates are based on fully constructed, functionally complete, and operational plants that generate electricity.
- Single fuel gas turbine.
- Steam turbine.
- Dry low NOx control.
- Starting and lube oil systems.
- Fuel forwarding system.
- Gas turbine controls.
- Air-cooled generator.
- Air intake filter and silencer.
- Exhaust stack.
- Plant control system.
- SCR (if required).
- Water treatment.
- Earthwork.
- Foundations.
- Structural steel.
- Piping.
- Electrical.
- Construction labor.
- Engineering and home office expenses. Indirect costs.
STRATEGIC ACTION PLAN ®
Determine the route of the National Gas Pipeline (AKK) and the PMS pipelines. Draw the map, and acquire all available land around the pipelines for free handover to the power generation permit holders. Acquire a map of where wind, solar and voltaic power plants can be situated around the country. Obtain at least 20,000 hectares at every 100km radius within the mapped region for free handover to power generation permit holders to build wind, solar, and voltaic plants.
Determine the location of coal deposits, refining plants and conveyor systems in a map. Acquire large land (over 20,000 hectares) around the coal zones and handover for free to permit holders for use in building coal power plants.
Determine and acquire strategic hydro flow points for the potential development of mini and macro power generation dams. This identified locations will be acquired and freely allocated to entrepreneurs with permits.
Obtaining a permit is free and the conclusion of a process of light documentation.
Special Purpose Vehicles (SPV)-The Industrialization Strategy
Ministry of Power can allow SPVs to form under special approval program.
The SPV will get defined under a particular power generation capacity and approved cost. The SPV will be split into units’ equivalent to the naira value of the approved cost for developing the power plant.
An all-or-nothing campaign is started by a ministry approved contribution collection agent (modified Osusu system) on behalf of the SPV.
Contribution to the campaign translates to ownership of the SPV (power plant) and participation in the profit generated by the power plant. This arrangement is done outside the scope of the stock exchange and gives direct ownership to the contributors. Contributors can trade their ownership to others but cannot unilaterally request refund of their contributions (refund are automatic if the campaign targets are not met). Interest generated from depositing the fund in the bank is used to fund the campaign. A service charge of 52 naira is used to effect reversal if the campaign target is not met.
Trading/transfer of contributions and ownership is done through a blockchain platform managed by the Ministry of Power, in collaboration with Central Bank of Nigeria, NIBSS and a recognized local e-platform with experience in currency/commodity trading.
Pension Fund can be directly invested as SPVs to own power generation plants.
Power transmission should be part of the supply chain and value chain of the wire
rolling, cable making, pylon fabrication, and coil making industry. Power
transmission should form a part of their market share. This means it should form a
part of their portfolio holdings, thus creating an incentive for expansion and
specialization in the power sector.
Regulatory impediments and international commitment on environment that are
related to power plant activities will be ignored, not enforced and systematically
repealed by government at all levels. Ministers and policy makers should be
continuously trained and encouraged to see those regulations and declarations as
drawbacks to institutionalization of industrialization. The systematic moratorium on
environmental regulations will only be lifted when true industrial capacity has been
achieved by Nigeria.
Lead Strategy for Industrialization of the Power Generation Sector
As can be seen from relevant screenshots, part of the job of the US Department of Energy is educating active and prospective operators of power generation plants on optimization methods and guidance on establishment of power plants. Even at the high-tech level of the operators, the American investors, educational system and capitalist mantra of the USA and its society, the Department of Energy continues to play lead role in educating and encouraging participation in power generation. The tutorial guides are broken down to very low complexity that allows any enthusiast to participate in the sector. It achieves a level learning that gives confidence to potential investors to fully comprehend the big picture and to relate all micro activities in the construction phase to the macro conception, which is the real goal and fundamentals. The guides are holistic and covers all possible inquiry and challenges a prospective or active operator might have regarding entry and operations in the power sector. They also indicate the active role the Department plays in pioneering and spearheading research in the power sector that are then utilized by all parties consisting of equipment manufacturers, power plant builders and operators.
The strategy of the US Department of Energy will be explained hear and related to the Nigerian environment. It will form part of the proof of concept for the recommended proposal to the Ministry of Power by Northern Pacific Global Investment Services (NPGIS).
Although text books on Power generation already exist, we shall use the American and Chinese Experience to show that simple concise editorial rewritten in the socio-economic context of a particular population have greater impact in influencing social change and social action on a pervasive rate. We will show how countries with a large power generation capability have used such strategy to instigate an appetite for investment in the Power sector, tolerance of government policy on power and even influenced the negotiations and business partnership-intelligence of local entrepreneurs with their policy makers. The elusive Chinese Price Structure is analyzed to show latency in economic wisdom and application. The concept of business-conversion and shrewd practices is used to show how price structure can emerge that defies conventional economic arithmetic. It follows the factoring of redundant resources into the operations during early construction as a near zero sum economic boost that can be used to hedge-out competition and gain market dominance. A simplistic explanation is this; If SEDI is commissioned to construct Turbines for the power sector. SEDI can force the price of such construction not only from cheaper labor, but also from having free raw materials which it obtains from decommissioned rail lines and train bougies. The free raw materials are not factored when estimating what the cost of its production should be, since it is done outside conventional accounting and price analysis system. SEDI can thus continue to far outdo other competition that account for material cost during its production cost calculation. SEDI could be seen as a larva in its cocoon feasting on the nutrients (raw materials) in the cocoon to gain strength (low price strategy) until it fully develops (known brand with quality) and can survive in the open world (competition). Its activities in the low-price days will continue to give it service contract like equipment maintenance and upgrade.
As part of this strategic development document, we have highlighted specific resources around the country that are redundant, in decay and abandoned. This resources which lie wasted around as monuments, around airports and in scrap yards will be donated freely to participating equipment manufacturers using the Ministry of Power proposed logistics intervention fund (LIF) to dismantle and move them freely to the storage of the equipment manufacturers.
The Logistics Intervention Fund (LIF) is proposed for the Ministry of Power. It shall comprise a budgetary funded unit of experts in engineering, negotiation, haulage, and accounting. It is a development assistance scheme with a targeted economic outcome of disrupting the price structure of Nigeria made power equipment. The ministerial unit will develop contract terms with the equipment manufacturers, design and implement audit methods for guaranteeing transparent and fair usage of supplied raw materials, identify new reusable redundant and abandoned raw materials, negotiate their takeover, plan and implement dismantling of the raw materials, implement their identification, spectroscopy, quantification, and identification; supervise and undertake the sorting; plan and execute the haulage to the equipment manufacturers site.
ARE FOREIGN POWER PLANT SUPPLIERS NEEDED IN THE REBOOT 2.0 PLAN?
The role of foreign power plant suppliers and their joint venture partners are Examined and reappraised to clearly understand and proof that these suppliers cannot be and should not be elementary development partners in any real industrialization drive because they are incorporated entities with loyalties to their shareholders and sponsors and not to any developing economically struggling nation. It should be understand that at every level in the value-chain, this companies will always be willing to collaborate with the opportunities at that chain, thus if the local equipment manufacturers capacity are built-up and developed as a priority by the ministry, the foreign collaborators will always innovate ways to partner at the level of the local manufacturers sophistication. It could be through technology transfer, specialized components design and fabrication, alloy supply, joint venture agreement, manufacturing license, and other more equitable innovations that does not interfere with the industrial democratization, investment option assortment and pervasion of power generation in Nigeria. The Chinese experience indicates that during the era of pervasive power generation plant construction in China, the Chinese equipment manufacturers (obviously with state assistance) were able to negotiate and obtain open manufacturing licenses that allowed them to use the technology designs and expertise of western equipment makers. The size and energy target of the local manufacturers backed by government approvals (contract award) were bargaining chip to negotiate with the westerners. As an example, Imagine the government issuing Moll to SEDI granting it approval to produce total of 30,000 Megawatts in turbines for the power sector in the next 8years. That is all the bargaining chip the SEDI management need to negotiate good technology deals with foreign manufacturers that does not compromise its ideals of equipment development and technology incubation in Nigeria. The agreements can be developed without undermining the democratization and true-privatization schemes defined in the previous sections. A template for the agreement between Ministry of Power with the local equipment manufacturers will be developed by Northern Pacific for the Ministry and designed in such a way that it achieves all the intention and objective of the Ministry of Power.
Foreign Precedent in Power Sector
Industrialization
The American and European electric power industrialization occurred before the era of analytical recording and industrial sociological research. What we have with regards to the American early experience are curated history, with no significance in strategic planning. The need for historical precedence has been solved by the great Chinese experience which occurred in the era of record keeping, documentation, data analytical sciences and prolific researching. It is from these historical experiences that proof for some of the postulations and research findings in this document are tested. Cognizance is taken of the differing cultural, political, global and economic landscape between present-day Nigeria versus the Chinese experience. Analytical models were developed by Northern Pacific to study and evaluate all the findings in this report. The models were developed from research data that are considered reliable from peers in various fields related to the subject matter. It consists of data from Nigeria, Africa, the World Bank, Chinese experience, the Northern Hemisphere, Asian experience, the eastern European methodologies and every other available reliable data. Some of the in-house proprietary models are presented as simplified flowcharts used in arriving at a development strategy for the Ministry of Power.
Currently, China has an installed coal fired capacity of approximately 400 GW. Its capacity is growing by 50-120 GW per year. Before the late 1990s, the Chinese power sector consisted exclusively of subcritical coal-fired plants ranging from a few megawatts (1-10 MW) to standardized 200-MW, 300- MW, and 600-MW units. All of these power plants were manufactured domestically under licensing agreements with foreign suppliers. Units above 200- 300 MW utilized technology obtained through licensing agreements with Western suppliers. One such agreement for boiler technology was with Combustion Engineering Inc., which was later acquired by Alstom. The technology was made available to all of the leading local manufacturers (Harbin Boiler Group, Shanghai Boiler Group, and Dongfang Boiler Industrial Group, as well as smaller manufacturers such as Beijing Boiler Works and Wuhan Boiler Co.).
China started using supercritical technology in the 1990s, first with 10 units (4x320MW; 4x500MW; and 2x800MW) procured from Russia. The first plant utilizing Western technology was the Shi Dong Kou plant, commissioned in 1992. It consisted of 2×600- MW units with 25.4 MPa/5389C/5659C steam conditions. The second plant utilizing Western technology was the Waigaoqiao plant in Shanghai (next to the Shi Dong Kou), which consists of two 900-MW units with steam conditions of 24.7 MPa/5382C/565eC. The project was financed with a World Bank loan in the mid-1990s. Since then, many more supercritical units have been built. As of the end of 2006, China had 46 supercritical plants in operation representing 30 GW of installed capacity; most of them have been designed for 24.7 MPa/565QC/565-593QC, but two have ultra- supercritical (USC) steam conditions of 24.7 MPa/6009C/600eC.
The first USC plants (Huadian’s Zouxian and Huaneng’s Yuhuan power plants) started operating in November-December 2006. By the end of 2007, approximately 120 GW of installed capacity was expected to utilize supercritical steam conditions. Sixty percent of the future plants are expected to utilize supercritical and USC steam conditions.
An interesting development is that each of the Chinese manufacturers has developed a joint venture or licensing agreements with one of the international suppliers. This is a departure from the past, when all the Chinese suppliers obtained “blanket licensing agreements.” More specifically, Shanghai Boiler Works has teamed up with Alstom and Siemens; Harbin Boiler Group works with Mitsubishi; and Dongfang Boiler Industrial Group has a joint venture with Hitachi. Additionally, the fifth-largest manufacturer (Wuhan) was recently acquired by Alstom, which reportedly plans to expand its capability to produce both subcritical and supercritical plants.
The manufacturing capacity of China is estimated in the range of 100-120 GW per year. While no specific estimates are available, 30-50 percent of this comes from second- and third-tier manufacturers (the first tier being Harbin Boiler Group, Shanghai Boiler Group, and Dongfang Boiler Industrial Group), each of which is capable of manufacturing subcritical units up to 300 MW. Reportedly, the first-tier manufacturers are booked for the next two to three years (2008-2010) with domestic orders for supercritical and USC plants. However, even these manufacturers have expressed interest or have already participated in recent commercial projects outside China. The second- and third-tier Chinese manufacturers are facing a shrinking domestic market and are under pressure either to upgrade to supercritical or to seek markets outside China. As a result, the potential for exports of both subcritical and supercritical plants by Chinese manufacturers is real. Export of subcritical plants is possible and is already taking place; supercritical plants are likely to follow in the coming years, especially if China’s rate of economic growth slows down. In this context, it is important to review the prices of power plants manufactured by Chinese suppliers.
Approximately 50 percent of the costs is estimated to be material costs. The fact that these prices have stayed at the same level while international commodity prices have experienced a substantial increase in the last two to four years raises questions regarding their pricing structure. It is certain that labor costs alone provide China with a competitive advantage that may be reflected in its 20-40 percent lower production costs. This (even when international commodity prices are used) is likely to give Chinese suppliers an advantage to compete in the global ma
Diaspora Remittances- Forms, Nature and Pattern
An understanding of the value, form, nature and pattern of remittances will validate the strategy proposed by NPGIS for tapping into the resources and opportunities provided by diasporans in industrializing power generation in Nigeria.
Remittances to low- and middle-income countries reached a record high in 2018, according to the World Bank’s latest Migration and Development Brief. The Bank estimates that officially recorded annual remittance flows to low- and middle-income countries reached $529 billion in 2018, an increase of 9.6 percent over the previous record high of $483 billion in 2017. Global remittances, which include flows to high-income countries, reached $689 billion in 2018, up from $633 billion in 2017. remittances to low- and middle-income countries ($462 billion) were significantly larger than foreign direct investment flows in 2018 ($344 billion). In 2019, remittance flows to low- and middleincome countries are expected to reach $550 billion, to become their largest source of external financing. Remittances to Sub-Saharan Africa grew almost 10 percent to $46 billion in 2018, supported by strong economic conditions in high-income economies. As a share of GDP, Remittances to Nigeria recorded a value of 6.1% of GDP totaling a value of $25 billion in 2019. Since many transactions are unrecorded or take place through informal channels, the actual amount of remittance flows into the country is arguably higher. The graph below shows a four-year data for remittances to Nigeria in comparison with exports for the same time.
INVESTMENT FROM SHARE OF DIASPORA REMITTANCES
The collected data indicate an appreciation in the volume of diaspora remittances into Nigeria. When compared to India on a percentage of diasporans to remittance, Nigeria is far higher than India and indicates a deep interest and connection of Nigerian diasporans with their native country, Nigeria. It offers an economic potential that can be tapped on the sentimental and emotional level if properly structured and managed by government. This document presents opportunities for the Ministry of Power to utilize the economic muscles and corporative constellations of diasporans to achieve industrialization of the power generation sector.
The statistical chart indicates that the ratio of Nigerians to Indians in Diaspora is on an average of 1:10. This figure, when compared to remittance indicate that for the year 2018, Nigeria recorded $25
billion in remittances as against India’s $79 billion. This figure Indicates that remittances to Nigeria stands at 32% of the Indian recorded value.
To understand and determine the commitment and level of economic connection of diaspora to their native country, an analysis and comparison of per capita contribution is made between the Nigeria diaspora community and the Indian diaspora community. The analysis is done by splitting the total remittances as a unit per diaspora person. The value is then displayed on a chart to compare the level of involvement of Nigeria Diaspora to the economic growth and betterment of the country. The figure is used in making a prediction on the viability of investment drives solicits the participation of Nigerians in diaspora towards the industrialization of the power generation sector.
Unit per Person Remittance for Nigeria = 25 billion USD /1.25 million people = USD20,000
Per Person Remittance for India = 79 billion USD /17.9 million people = USD 4,400
Diaspora remittances far outdo Foreign Direct Investment (FDI) to Nigeria. This is an indication that the reliance on FDI as vehicle for industrialization should be reassessed with the view to add a greater reliable source. Among the benefits of remittance over other forms of foreign capital flow include its less cyclical and volatile nature; greater sentimental attachment to the national priority and understanding of the socio-economic landscape of the country; meaning that remittances can be more reliable than other sources of foreign capital flow.
OPPORTUNITIES FOR THE POWER GENERATION SECTOR
Efforts that will be used to attract investment into the sector include reduction in the cost of remittances and subsidizing the cost of remittances for remittances that are targeted directly into the sector. This is invented as an incentive to motivate investment-type participation in the power generation sector. When it is publicized that the COT for remittance into special investment vehicles that are targeted for the construction of power stations, Nigerians in diaspora will most likely be willing to participate and build confidence in the investment vehicles. The strategies for the implementation of a reduction in cost of remittance will be developed by NPGIS and implemented by Ministry of Power in direct participation of the Central Bank of Nigeria and the Major Fintech operators in Nigeria. NPGIS has also developed special logistics agreement with Post operators for novel solutions to drastically fall-down the cost of remittances to a target group of diasporas who are willing to subscribe to the investment and industrial operations packages of the Ministry. Currently, the cost of remittance quoted by several operators averages lOpercent of the remitted cost. This value is considered high and an exploitation by many Nigerians in diaspora. Although the cost has not significantly dampened the intensity and propensity to remit funds back to the country, it presents an opportunity for investment vehicles to innovate means to funnel the funds towards their portfolios by offering opportunities for Diasporans to remit funds at cheaper rates while also making long term secured investment with their remittance. Since the Federal Ministry of Power are the principal managers of an investment landscape that has innumerable potential to yield massive profits and long term wealth to a wide flock of Nigerians, it is suggested that the ministry solicits financing and participation of the Diasporans through a multidimensional approach that holistically reduces the cost of participation in the power generation sector of Nigeria. The proposed multidimensional approach to attracting investment and tremendous participation of diasporans in to the powergeneration sector shall study and provide include the following cause of action:
- Examining the current flow of remittance and its utilization on the basis of percentage consumption to investment.
- Understanding the trepidation of Diasporans on financial impropriety, mismanagement, and astuteness of acquaintances in Nigeria.
Our research shows that Nigerians in Diaspora desire to maintain a strong
bond and connection to the home land, and therefore remit funds as a means
to build their local presence, ties and stake in the country. They tend to fee! a
strong emotional attachment to the country which presents itself as an
opportunity for the industrialization of the power generation sector.
Cooperative participation in the power sector is to be packaged as an avenue for maintaining a strong and decisive root both in the economy of Nigeria and in the social and political control of Nigeria, it is an opportunity to own an investment that have a long-term generational sentiment and economic power. While they might find it difficult in owning the power generation infrastructures in their
host country of residence, they have an opportunity to own the Nigerian power sector now that it is in the formative stage. It is through this form of sentimental appeal backed by facts and done in full transparency and trust that the confidence of the Diaspora community will be gained and enable the ministry to unlock the full avalanche of financing that the diaspora can bring to the fold.
It should be noted that advantages of engaging the diaspora community include the ease in convincing them and educating them on the concept of investment in power generation and on the process of investment, additional derivable benefits that are predicted include the ability for them to attract additional FDI into the sector.
GOVERNMENT ENGAGEMENT
The Government of President Mohammadu Buhari has instituted efforts to engage the Diaspora as a block. The government became the first to underscore the importance and role of the diaspora community on an official level. It has continuously allocated resources towards the integration of Diaspora affairs and engagement as an integral part of government and governance. The efforts of the government can be seen through several milestones which include the signing of the Diaspora Commission Establishment Bill into law in July 2017. The Law established the Nigerians in Diaspora Commission (NiDCOM), which was set up to engage and utilize the human, capital and material resources of this demography in the socio-economic, cultural and political development of Nigeria. The effort of the government is a conscious recognition of the importance of Diaspora as a socioeconomic resource which can be tapped on a national level for National development. It signals the governments openness to innovations that affects and can harness the potentials of the Diaspora community.
The strategy proposed in this text shall utilize the operations and resources of the Nigerians in Diaspora Commission to reach the diaspora community. Some of the solutions innovated as part of this consulting service shall be delivered through the platforms established by NiDCOM.
This does not represent the only means to reach out to and influence engagement of the Diaspora community. The community will be reached both through their Nigerian acquaintances and the various interests they represent in Nigeria.
STRATEGIES FOR REACHING AND ENGAGING THE DIASPORA COMMUNITY
Since the Diaspora community already have institutions that they are reliant on in remitting funds back to Nigeria with a high degree of trust, engagement of the Diaspora community by the Ministry of Power for participation in the power generation sector should be at the instance of already established and trusted channels. Among the channels already interfacing with the Diaspora community are the financial institutions, the fintech companies. Other identified channels are local alma-mater unions, the Nigeria immigration commission, the airline operators, and the local community level town unions. These channels provide an interactive layer that the Diasporans already utilize in engaging and interacting with the Nigeria environment. They are all mediums that present themselves for utilization by the Ministry of Power in attracting industrial level participation of the Diaspora community in the Nigeria Power sector. The strategy for doing this is simply for the Ministry to adopt innovative solution from NPGIS and other Development Consultants that reduces the cost and complexity of entry into the sector and bundles this solution into the primary packages and services offered to the Diasporans.
The role of financial institution in the relationship between remittance and industrialization is entirely supportive. This implies that in light of the volume of remittance inflow, the role of financial institutions in supporting investments and business development cannot be neglected. Since the Diaspora community already rely on financial institutions, investment packages that are bundled through these institutions platforms butthat are tangible, practical and advertised by the Ministry of Power as vehicles for entry into the power generation sector as direct owners of the facilities will be subscribed to massively by the Diaspora community.
The investment packages will be bundled in ways that allow subscribes to exercise their ownership rights to decision making and inclusion of their acquaintances in the derivable and sentimental benefits of such investment participation. When they are bundled through the financial institutions’ platforms and when the operators of the financial platforms are able to give clarity and motivation to Diasporans, then it would be easier and worthwhile for Diasporans to commit to such investment drive.
Our advisory is backed by our research experience and studies that points out that in countries with high remittance inflow and improved financial institutions that offer simplified investment vehicles in addition to their core roles, remittances are better utilized for investment and business development. Examples of where this interaction has been successfully tapped is in Mexico, where it was found that 27% of firms in Mexico were reliant on remittances from abroad to finance their liquidity and that remittances represent 20% of the capital invested for business development.
Taking a cue from Chinese industrial growth and the relevance of migrant input, it is evident that the active participation of the government and its dynamic policies targeted at encouraging migrant input to the economy had a great impact on Chinese industrial development.
The role of the Ministry is to hire consultant firms with an understanding of the proposed development strategy, to coordinate interaction with financial institutions, the NIBSS, the Central bank, the Tech Community and Engineering entrepreneurs. The objective of the interaction will be to design solutions using the NPGIS Industrialization strategy that can be embedded in the platforms and solutions offered by financial institutions to the Diaspora community. NPGIS already have success models that can be implemented out-of-the-box by the identified parties.
The increased participation and remarkable successes of fintech startups in the remittance space is part of an opportunity presented by the high cost of remittances. The Fintech are continuously innovating new solutions that allows them to better compete and outdo existing competitions from the remittance ecosystems. Their ultimate goal is to drive the cost of remittances to the values
projected in the sustainable development goals of the united nations, which is 3%. The present value of about 9% for remittance into Sub- Saharan Africa continues to present a challenge that will lead to new innovations and opportunities for regulatory refocusing. It is these opportunities and the propensity for innovation by FinTech that presents avenues for the Ministry of Power to adopt the recommendations and services of a development consultant partner like NPGIS in synergizing corporations among entrepreneurs, regulators and the ministry. The synergy will create products that incentivizes Diaspora communities to subscribe to investment bundles that are sentimentally and clearly packaged for the subscribers to increase their investment and wealth profile while also achieving the primary social aim of remittances as well as subsidizing the cost of remittance and cost of business for diasporans and fintech respectively. This kind of synergy recognizes the social and emotional importance of remittances while also presenting opportunities to extends and increase the economic impact of the flow. It is understandable that over 70% of remittances are intentioned for consumption in activities like purchase of food, drugs, transport, wellbeing and other necessities. While this intended use cannot be morally exchanged or appropriated for investment in the power generation sector, innovations can be structured that allows the inclusion of the recipients into financial networking pyramids and investment safety-webs that safely places them as recipients of the profitability of a remittance that has been injected to them through a well operated investment vehicle that serves them now and all through their future. These solutions are already modeled and ready for implementation. They are designed to be transparent and allows for integration of an entrepreneur’s personal preferences and style. They are unique and trusted because the involve tangible engineering products and activities that can be possessed and taken inventory of. By offering opportunities to entrepreneurs of new ways to achieve remittances and means to outdo competition by falling the cost of remittances offered to diasporans, the incentive for adoption of the investment vehicles as an offered package by the FinTech would have been created.
Solutions are currently being pioneered by the development consulting firm, NPGIS, that will provide avenues for remittance to the Power sector through collaboration with the telecommunication operators and the CBN. The solution, when unveiled to the Ministry will allow the direct injection of massive, low-transaction cost remittances to investment vehicles targeted at the power sector. This are all part of integration of fintech and communication solutions as a broader plan to spark and unleash industrialization of the sector.
Alma-maters and local town unions are social groups that allow peers to interact, share ideas and influence decision making at a corporate and personal level. Their prevalence in Nigeria is only being felt at all levels of society. The penetration and adoption of internet powered mass media tools have enhanced the liberalization of the interaction to more personal and intimate levels. Although social media groups are of different type and objectives, our research have identified two groups that transcend the web-space into the physical real-world space. This group type has a bond that exists outside of social media and have a bond that spans geography and personal achievement. This are the community town unions and the school (secondary school and tertiary) alma-mater groups. They represent a strong financial and social influence group that operate with a strong sentimental and emotional bond that can drive rapid social engagement, the type necessary for industrialization to occur. They are also powerful because of their ability to hold sentiments that are productive, devotional, and corporative. The focused alma-mater groups and town unions have been a strong link for the trusted interaction of Diasporans and compatriots at home. They present a channel for Diasporans to seek direction and understanding of the home terrain and for those at home to get insight into the global arena. They present an economic front that has never been utilized on a macro-economic scale but which holds all the potentials for ready harnessing of the resources that they hold. The Ministry of Power has an unabridged and innovative chance to utilize the power of Alma-maters and local town unions to achieve full and complete industrialization of the power generation sector. It is an opportunity because it gives the opportunity for members of this group to collectively criticize, analyze and resolve decisions on investment and collectively reach unison on investments and participation in the sector. The unions will lend their power of self-regulation and community support to fellow members. They shall have all the human resources to fully ascribe and consolidate the power generation supply chain to the benefit of all including that of the ministry of power and the Nigerian State.
The power of inclusion of this social group is in the level of capacity and expertise that they can unleash into the sector. For the alma-mater groups it is an opportunity for all the professional groups structured along alma-maters to fully delve into the sector in the most appropriate and efficient ways. They shall engage in areas they are experts at and offer true recommendations that are freely debated and optimized at their forum level before being scaled-up to the industrial investment vehicle level for implementation since they are co-owners of the vehicles. The most appropriate solutions will always be innovated and freely available in an open and democratic level. Manufacturing challenges will become group challenges and personal challenges, with innovations and solutions advanced in record time. The benefits for participation and entry will be both of economic and social value for members of this group.
The town union groups will bring perspectives that seeks to further the economic liberalization of the members, and the advancement of the interest of their native towns. The groups already have reliable role systems that ascribe responsibilities to individuals based on their exposed talents and professions. The initiative as proposed here shall allow these individuals to interact and contribute to the general growth and development of all. Advise shall be freely given to those with potentials to investment and encouragement given to all in their respective efforts at investing in what will be packaged as “opportunity to own the power sector for generations to come”.
The quintessential question is how do we bring the Alma-maters and local town unions on board to unleash all the above identified potentials?
The answer is “policy” I Through a simplified policy of the Ministry of Power, all interested town unions and alma-mater shall be invited to register as interest group in the power sector ownership scheme. The Ministry should also recruit the services of a data collection and retrieval agency that shall scout and retrieve a national list of all known / unknown alma-maters (secondary, university, polytechnic, departmental, faculty, school, social groups) and town union groups in Nigeria. The list shall be published on the website of the Ministry as a show of understanding of the existence of this groups. Unidentified groups shall be advised to update and add their information on the portal. The Ministry shall preoffer all the identified groups a collection of investment opportunities which shall include permit and land to establish power generation plants within their primary location (State or LG of the town, or school in the case of alma-mater); discounted price offer to members for direct purchase of ownership of a power plant through an existing SPV; Support in starting an SPV; offering predetermined ownership percentage to the groups for every individual who invests in a vehicle or appropriates investable fund to the power generation sector who identifies as belonging to a group. The percentage ownership incentives offered to groups are presented as counter-fund by the ministry to investment entities. They are issued as technology aids, equipment, raw materials and as cash in some rare cases.
The funds will not be generated directly from the federal budgetary allocation
of the Ministry of Power but through a robust Trust fund and Donation system
that will be established and managed for the Ministry by capable companies
like Orange Hook LLC.
Mentorship Strategies and Action Plan
The Nigeria culture has a unique mentorship system and goodwill trust system that has enabled the proliferation of commerce, flee market and market centres unlike any other comparative African nation. This business psychology of Nigerians transcends into the socio-economic relations and business understanding operating within the country.
The modulus operandi of the SPVs that will be innovated under this industrialization proposal shall be construed to align and recognize the business psychology prevalent in Nigeria. The SPV structure should show an understanding of the resilience of Nigerians for self-establishment, learning, belief in the serving-mentorship training scheme, and pathway to growth from hard work and loyalty. They are features which shall be smartly featured in the SPV structure and operational strategy.
We have developed a tangible sample skeletal framework that can be readily inculcated as a requirement for SPVs. The framework is presented as a comprehension passage that explores how a SPV shall be formed, managed and administered. It presents a list of dos’ and don’t, limits and benchmarks. The core strategies for the functioning of the SPV are packaged as an SPV “Power sector Directives” which although not binding in their applications and conformity gives expert opinion on criteria considered and followed by the Ministry in accepting and endorsing the activities of an SPV.
Companies in the power sector will have a mentorship program that teach startups how to gain entry into the sector. A mentorship program exposes entrepreneurs and staff of the company to opportunities for innovation and participation in the sector. An SPV in expected to submit a written mentorship plan during the early days of its formation. Although the Ministry does not mandate the mentorship plan as a pre-requisite for obtaining a power generation permit, it expects SPV that wishes to gain better endorsement and corporation in its SPV Support Program to have a mentorship plan. This plan enables an SPV to enjoy special privileges and intangible support like advertisement, public endorsement recommendations from the Ministry. The plan shall squarely specify the role of the CEO in the mentorship program. Roles of CEO can include appointment of mentorship coordinators, approval of fund for mentorship activities and presentation of award to participants.
It is expected that for mentorship programs to be impactful, it should have a clearly stated objective that protegees and prospective participants would look to as a reward and motivation for participation. If the reward is cash-based, then it should be substantial to guarantee the protegees have a footing in setting up their own entrepreneurship gigs. The program can offer rewards like loan guarantees and collateral to the awardees and facilitate the loan collection process, including allowing the awardees to rent or freely use the equipment of the mentorship sponsors (the SPV). For SPVs in the power sector, having a plan that clearly states how the SPV plans to reward participants of its mentorship program assist the SPV in gaining more bonuses from the ministry since the mentorship directive is a core stratum in the ministry’s industrialization plan. The ministry
appreciates supportive efforts like free (subsidized) access to equipment of the parent SPV, issuance of recommendation letter to regulators (Ministry of Power), investors, creditors and suppliers on behalf of their protegees. It is also suggested that SPVs allow their protegees to try out independent practice and return back to the SPV without victimization if unsuccessful in their business escapades.
It should be required and highly recommended that a mentorship plan submitted to the Ministry should show an expansion and growth plan. The expansion plan recognizes the importance of the mentorship plan as a component part of a greater industrialization masterplan. It should state the commitment of the SPV to expand the reach of its mentorship program to reach more people and also to give more resource assistance to participants. It should be a commitment to expansion of quantity and quality of value offered through the scheme.
Mentorship plan should not be worded and structured to expect reciprocal reward from the protegees and participants, it should not be a tit for tat scheme. The ministry will be accessing plans for practicality and ability to implement with an open but pragmatic mind that recognizes innovation and challenge.
The plan should be innovative, suggesting new ideas and methods for growing the mentorship system, including innovative networking and peer support strategies. Plans should not be vindictive or appear to suggest negative detrimental ideas. The Ministry will reject plans it finds negating the principle of fairness or that are counterproductive to the sector or the mentorship program. Examples of plans that will be rejected include those that encourage violence, theft, ethnic provocations and dehumanizing to individuals, race, genders or groups. Ideas that encourage human and animal cruelty will be rejected outrightly and the sponsors sanctioned appropriately. The ministry shall specially reward and attempt to institutionalize mentorship proposals that it finds groundbreaking, disruptive and original. These ideas will be used as models in mentoring and educating SPVs on innovation in the mentorship program.
The mentorship program is suggested by NPGIS to be handled by a dedicated unit within the Ministry of Power with active partnership and support of the Ministry of Trade and Investment, the Ministry of
Science and Technology, the National Orientation Agency, The Ministry of Commerce and Industry, The Ministry of Labour and Employment and interested Non-governmental organizations (NGOs).
The Unit shall publish mentorship plan submissions of SPVs in the public domain through its web platforms and other means it deems necessary. An SPV can review or withdraw a submission at any time. Changes to the plan shall undergo renewed review of the ministry, the submission process shall be done at no cost to the SPVs as a means to encourage voluntary participation. Means to fund the capital expenditure of the mentorship program in the Ministry shall be through a public Trust fund and donation system that is suggested to be built for the ministry by experienced companies like Orange Hook ™ LLC USA. Orange Hook have the ability to develop and manage a robust Trust fund and donation system for the Ministry of Power at no direct cost to the Ministry. NPGIS offers to facilitate the agreement between Orange Hook LLC USA and the Ministry of Power. NPGIS also recommends to train the members of the Mentorship Administration Unit of the ministry on the professional administration of the mentorship system and the development of the work functions, operational framework of the mentorship system.
The mentorship plan does not have to follow any formatting methodology or writing style. SPVs are free to choose what appeals to their fancy and adopt any writing or formatting style. It should be noted however that the primary audience for the mentorship plan is the Ministry Mentorship Administration Unit. This unit of experienced bureaucrats would be trained to appreciate writings that are presented in simple clear language and basic document formatting.
The act of Mentoring is to support and encourage people to manage their own learning in order that they may maximize their potential, develop their skills, improve their performance and become the person they want to be. Mentoring ensures that knowledge, experience, and hard-won insight transfers from one person to another through personal interaction over time. The mentorship system will equip new entrepreneurs to have one of the most powerful assets any new business person can ever have: someone invested in you and your success. The mentorship program will engender selfgrowth of the sector as a single entity able to evolve and mature on its own.
Rationale for formalizing the mentorship system as an integral part of the power sector operator framework is supported by research analysis which indicates that companies whose founders have been mentored by top-performing entrepreneurs and systems are three times more likely to go on to become top performers themselves. Participating SPV should structure their business model with the mindset that new businesses would evolve from them and that some of their staff are in the system to develop the skillset, network and experience to start similar businesses as the SPV. These upcoming mentees should be seen as future companions in the energy generation space and not as hostile competitors. The startup of new companies from the SPV should be framed as furtherance of the legacy of the SPV and opportunity to influence the operations and direction of the power sector.
Through asking questions and challenging, providing guidance and encouragement, the SPV sponsors should allow the mentee to explore new ideas, opportunities, becoming more self-aware, rather than leaving it to chance. Organizations in the power sector should be able to create formal frameworks that actively seeks to assist and support staff members in acquiring a strong understanding of how entities and organizations in the power sector work (formally and informally), and ideally a knowledge and understanding of the key players in the organization. This will be combined with an understanding of both the strategic direction of the organization, its growth and development drivers, and those of the wider power sector. Armed with this type of mentorship, entrepreneurs will nucleate out of the system naturally and with better understanding and confidence in adding tangible error-free value to the power sector.
The Ministry holds the key in imprinting this philosophy during the formative stages of its industrialization drive as that will form the norm upon which future participants and operators in the sector will operate. It is easier to build the mentorship culture now that industrialization plan is being hatched and instituted. A well-implemented mentorship system would be a vehicle for technology transfer within the sector. This is a desired strategy in achieving growth and technology advancement that are consolidated in a sustainable way. Through the system, diffusion of technology and innovation will be achieved, thus reducing the complexity of operating in the sector, and invariably the cost of technology. The proposed template for integrating the mentorship system as a strategy for industrialization of the power sector will be implemented by NPGIS as an experienced consultant in Strategic Management.