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Nigeria is one of world’s most significant power markets – Bolze

By BusinessNews Staff on April 14, 2014

President and Chief Executive Officer of GE Power and Water, Stephen Bolze, speaks with Kunle Aderinokun about the company’s operations in Nigeria and what to expect in terms of power in the country within the next few years…

What informed General Electric’s decision to invest heavily in the power sector in Nigeria?
GE has been a long-term partner with Nigeria; it goes back to over 40 years. This is long-term partnership, not only in the government but with many of our customers here in the country. What is significant right now is that Nigeria is one of the most significant power markets in the world right now, particularly with the activities going on in the privatisation. What you see going on is a number of power projects emerging because of privatisation and GE has always been committed to developing the power market and investing here locally. Just to give you a sense, in the last two years, we have doubled the size of our team here in Nigeria and you also saw last year, we announced $1 billion investment over five years to develop a local servicing and manufacturing capability in Calabar.

Last year, GE signed a country-to-company agreement with the government of Nigeria to generate 10,000 megawatts of power in the next 10 years. How does GE intend to achieve this considering that it does not own any power-producing company in Nigeria?

I think the most interesting thing going on right now is based on the privatisation. These projects are starting to take place now. So we announced an MoU formed with the government of Nigeria, a year ago, for a 10,000 megawatts to work with partners. We now, today, have more than 3,000 MW out of those 10,000 MW in the pipeline. So things are moving up.

What is GE’s view about the on-going power sector reforms in Nigeria? Does GE think they are far-reaching enough?

The reform is good because it puts the focus on the power sector. If you look at the opportunity within Nigeria, it has more than 160 million people and less than 10 gigawatts on the grid. For a country with this size of population, you should have nothing less than 50 gigawatts. So the reform is putting attention on that and providing electricity to everyone will take time. And the reform activities and the privatisation activities are the right steps to move forward on that right now. GE with our customers here in Nigeria, 4 gigawatts of the 5 gigawatts online come from GE technology and another 4 gigawatts are being built. So, that technology will bring more power to the citizens of Nigeria but I think the reform activities are just going to continue to accelerate a number of investors coming into Nigeria to build on that.

GE is working closely with the Independent Power Producers. A lot of people believe your role is just to supply turbines and other equipment?. Is this impression correct?

Like I said, GE’s relationship with Nigeria spans over 40 years now. We have over 400 employees in Nigeria. We announced over $1 billion investment over the next five years, $250 million of that is capital expenditure but with that investment, we are going to employ 2,000 Nigerians, not only within GE but also with the supply base. So, I will say the partnership with Nigeria is for Nigerians. A big part of what we do is to train Nigerians. But to the point on IPPs, we are definitely spending time with the IPPs, the various people that are looking to buy this power. That’s one of the key areas that I spend time with while I’m in the country. On this trip, I was in Abuja as well as in Lagos and spent time with the ministries, spent time with our IPP customers, spent time with our suppliers. These are partnerships, our team is here in Nigeria, every year we grow, it’s more so that way. GE works to solve one of the world’s toughest problems. The problems could be healthcare, aviation or power. One of the biggest topics in the world right now is providing power to enable people live modern life; that is, electricity at the home. And gas turbine technology is one piece of what we are doing in Nigeria but you have to be able to service it, maintain it for 30 to 50 years, so we work with partners to do that. But I will tell you the other side is that Nigeria has also been an area that is very open to new technology. If you look at how telecommunication works here in Nigeria, a lot of the cell towers are not on the main grid, they actually needed to be backed up by diesel power. That is the only way your phones work. What we are doing now is rolling out some of our latest battery technology, energy storage. That will be used as a way to cycle between diesel and battery technology to run those cell towers with less diesel usage, for cost saving and to the benefit of the environment. What is great about Nigeria as we look at it as a company is that we are helping to solve some of the problems in Nigeria, modern life and electricity. Number two is: we can bring gas turbine technology, we can also bring battery technology, which helps to enable what’s going on in telecoms sector, which is different from other parts of the world.

There are indications that the Federal Government will soon beam its searchlight on compliance with the local content in the power sector. How prepared is GE to ensure compliance?

Very much so. Compliances are our core and we recognise them in countries. As you said local content is very critical because it’s about technology, it’s about training, it’s about capability building and if you look at GE’s commitment to local development of suppliers as well as local sources, we always want to be at the front end of that. I think it’s being recognised by some other senior officials here within Nigeria and it’s something that I track as a global leader; I look at what is our capability of local content sourcing by countries around the world. It’s just fundamental to our strategy.

Looking forward, in the next five years, where do you envision GE to be, in terms of provision of power solutions?

I will say in the next five years, GE will help to double the amount of power that is available to Nigerians. That is going to be great power. Right now on the grid, power is in the neighbourhood of 5 gigawatts which flows into households and others. We are looking at the government and other customers taking that up to 10 gigawatts. That is a lot of power added to the system, which helps for more consistent power in broader areas. At the same time, the industrialists in Nigeria need loads and some of those people are setting up their captive power and we are supporting those opportunities also. But in the next five years, it’s about how do you expand as quickly and as reliably as you can with our customers to power grid in Nigeria? And if you look at that, there are too many power grids in the world that are not going to get anywhere doubling its size in five years. Nigeria is unique.

What could be attributed to GE’s success in Nigeria and other countries?

One, which goes back to the days of Thomas Edison in 1890, it is in our core to bring out technological invention that could impact on the world. I think that is in our core and it will never go away. Two, we are very much a global company because if you look at what’s going on across sub-Saharan Africa, Middle East, North Africa and Nigeria, we have more and more people in the company than are within the country. Our innovations can scale the globe but they are going to be applied locally. And so our leadership development, which is one of the things people have also linked GE with over time. That leadership development, technical training and leadership training are done very much globally in ourselves. The leadership team that I’ve been spending the last two days with in Nigeria, they are all Nigerians.
They’ve been trained. There is a few that we brought from our headquarters to help accelerate the training but they are here, for sure, on short assignments as we get our team here on board. And the goal is, what part of the brand? We want the brand to be technology, we want to be big global solution and we also want to be local.

[This Day]

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