Ladies and Gentlemen:
The number and array of exhibitors at this event clearly speaks volumes about the investment appetite for Nigeria’s power sector.
More than anything that I could possibly say about the attractiveness of the Nigerian power sector; these exhibitors cum investors, who have voted with their feet by coming here, say it all.
As Mr. President recently remarked in the United States, this is an investment destination that the rational investors cannot ignore.
Are there challenges?
Yes, there are. And I will speak about a few.
Those are the risks of entrepreneurship.
But the opportunities and the return on investment clearly outweigh the challenges.
They are opportunities in a market that is transiting from Government control and operation for 63 years between 1950 and November 2013, to Government regulation and private sector operation in the last 3 (THREE) years.
Let me reiterate very clearly, that while this administration remains committed and focused on improving our collective power experience, and while I understand the need to act expeditiously in order to stimulate the economy back to growth and inclusion, we must bear in mind that the transition is only less than three years on, and we must manage our expectations for results within the context of the unfruitful power experience of 63 years.
As I have said before, our approach is simple and methodical.
Start from getting incremental power from all sources; solar, coal, hydro, gas, bio-mass, nuclear, wind and whatever is possible; and I am happy to report gradual and sustained progress in this regard in spite of the setback caused by vandalization and sabotage which we will certainly resolve.
Our responsibility as Government is therefore to provide an environment that enables the private sector thrive, deepen its investment, and contribute to our stock of incremental power.
Our policies seek to ensure that investors who play by the rules will recover their investments and a decent profit, while we protect consumers from people who want to profiteer.
Our monthly power sector meetings is one of the initiatives for constant interaction and problem-solving to facilitate interaction between Government and the private sector, and also between operators, so that issues and problems can be resolved in an efficient and businesslike manner.
As I mentioned earlier, there are challenges in the sector and this is part of the occasional risk that make reward worth the venture.
One of the challenges that currently the afflicts the sector is the liquidity issue.
I can say categorically that Government is aware of these issues ranging from the volatile foreign exchange rates to MDA debts, to collection losses.
These issues require all operators in the value chain, not only Government, to act with a common commitment, with transparency and with candour.
As I said at my inception of duty tour, we will pay all properly verified debts and we have started working with ministries and departments to ascertain the actual quantum of debts, with a view to solving them.
The bulk trader, NBET is working to raise funds to provide financial security for the sector.
What we need is full disclosure from all operators in and open manner to assist us ascertain that the debts are legitimate so that we can take the next steps.
What we do not need is a media war between operators about who is the cause of the problem.
That does not solve the problem and neither does it help us serve the people on whose behalf we hold office and whose patronage sustains our businesses.
What we do not need are sensational and exaggerated media statements that can cause panic in the industry.
What we do not need are unguarded statements that either mislead the public or threaten our national security, because debts are owed.
This brings me to a publication to which my attention was drawn, in the Punch newspapers of 18 September 2016, credited to the Managing Director of Egbin Power; titled “Nigeria may soon be in total darkness, Egbin CEO.”
Personally, I think the statement was in bad taste, it was inflammatory and insensitive to our national security.
Yes, Egbin is being owed. Egbin had been owed before this administration.
But unpaid debts to Egbin or any other operator may lead to the power plant being closed down, which would be regrettable and must be avoided; but it does not mean that Nigeria will be in darkness.
Leadership positions in critical services such as energy, are positions of enormous responsibility which demand some introspection and moderation in public communication.
What the Managing Director did not tell the newspaper is the number of meetings my ministry and other senior government officials have had with the owners of Egbin, unless he is unaware, which would also raise doubts about what he knows.
What he did not also tell the newspaper was that some payments were approved this year for Egbin and some other operators and that this is a continuing system of claims and settlements.
It is not normally my style to take up individual newspaper reports, but an ominous proclamation of national darkness borders on national security, and I cannot resist the sense of duty to assure our people that we are working to solve the problems.
My final comment on the matter is in respect of a somewhat misleading statement, credited to the same person, claiming that the transmission system cannot support the 1320 MW from Egbin or 5000 MW.
This is certainly not true.
Yes, the contract of Manitoba has expired and, after some consultation, Government has decided not to renew; but instead, to develop a more robust expansion and management plan.
Today, the carrying capacity of the National Grid is has grown from tspo 5300 MW and it is still growing because our contractors are back to work, and the expansion program continues while we are solving problems.
This factual situation flies in the face of the incorrect assertion that the grid cannot support 1320 MW by Egbin or indeed 5,000 MW.
Finally, on this matter, there is the suggestion that the transmission system should also be sold.
Before I comment, let me say that to the best of my knowledge, India, South Africa, Brazil, Mexico and China have privatized their power sector and none of them privatized all the 3 (THREE) generation, transmission and distribution at the same time.
Best practice has been to privatize 2 (TWO) and leave 1 (ONE); and there is no rule about which one to privatize or leave.
That said, subject to what the Government-in-Council may decide, my personal view is that while we are in a transition of making the best of the privatization of generation and distribution, it is sensible to wait for those sectors to stabilize, achieve efficiency and service delivery before even contemplating privatization of transmission, if at all we are so disposed.
My position appears reinforced by the liquidity issues we are talking about and the current ability of government to at least fund some of its transmission projects.
That said, ladies and gentlemen, this exhibition is most welcome, it speaks eloquently to the possibilities of enterprise and reward in the power sector.
It challenges Government to do its best so that you can do your business and contribute to building this economy.
All of us are leaders in our positions, whether public or private.
In the face of challenges, we owe the public disclosure because they have a right to know; but we owe a greater duty, to inspire hope in them rather than cause panic among them.
That is why we are leaders.
Thank you for inviting me and I wish you a very successful interaction.
Babatunde Raji Fashola, SAN
Honourable Minister of Power, Works and Housing