‘Pushing for electric cars in Nigeria, not of immediate priority’
Rere Obaisi is the Managing Director of Reohob Nigeria, a Renewable and Security Systems company. In this interview with KINGSLEY JEREMIAH, he discusses critical issues in the Nigerian power sector.
What’s your take on the electricity market in Nigeria?
It is under-utilised; a lot of electricity is lost in transit and I have always blamed the Nigerian system for mismanagement. We’re not producing enough and the little being produced is not managed properly. If everybody understands that Nigeria’s main problem is mismanagement, that would be a good start. Regarding the electricity aspect, we’re not generating enough but with the right management, we could transit from where we are now to the level we should be
From fiscal to regulation, tariff and others, what do you think must change to move the sector forward?
A lot of things have to change and each has a role to play, including tariff. But tariff is not the key problem. Production is the first. You don’t complain about people not being able to afford what you’ve not produced. Tariff, being one of the problems, can be managed. The more access we have to power supply, the more productive you are, investors generally avoid Nigeria because of the cost of powering whatever is being set up. Most of these industries and companies are now closed down because the amount they spend on power (Generators and Diesels) is exorbitant. Tariff is the secondary problem while production is the primary problem.
Despite being privatised, a lot of taxpayers’ money has gone into the power sector. Are you in support of continuous government funding of the sector?
I don’t have enough information to say the government shouldn’t pump in more money, when companies want to scale, they talk to investors needing a particular amount, they go through their books, if it’s good enough they release the funds, if it’s not they won’t. There has to be some form of results for you to ask for more funds, nothing happens without the government’s knowledge and I think they’re doing quite a lot about it. There’s a lot of billions in the energy sector, the government is pushing it and they’re giving the private sector a percentage of it. If the system feels that privatization of the power sector isn’t doing well, the government can come back.
Nigeria recently signed an agreement with Japan and Israel, the plan is to make sure we drive electric vehicles in Nigeria, how feasible is that?
It’s feasible but not necessary and should not be the priority. The people pushing the electricity vehicle agenda are producing so much carbon, Nigeria and Africa generally generate less than three per cent of what the carbon the world is generating, so we’re not a threat. Do we have enough power to electrify the cars for them to function properly? There has to be constant power for all of this to happen as well as enough electric charging stations. Electric charging system wouldn’t work without a power supply.
Looking at what you are doing in London, do you have an expansion plan that addresses the electricity issues in Nigeria and other African countries?
We’re in the pipeline of getting investors. We want our product to reach more people and we’re looking for investors. We already have some who are interested. The whole idea is to manufacture solar products with good quality and less cost so more people can purchase. The products would also sell in other African countries. We have interest in South Africa, Cameroon and others. But for now, we’re focused on Nigeria, so we’re transitioning from using other people’s products to using our own certified products. It makes more sense to produce locally here, reduce importation, retain resources, provide more employment and improve the economy than to import finished products.
Do you see the potential for the export market for electricity and energy products in Nigeria, knowing well that we currently serve some neighbouring countries?
I believe that the principle of giving is to give when you have excess, in the U.K, when you generate solar power you can send it to the grid, whatever you consume in that period would be subtracted from whatever you sent to the grid, if there’s an excess you get a cash back for it, that’s the only way it can work.
I believe we should have manufacturing industries of solar systems and batteries in Nigeria, which would boost the energy transition. People who have the means should set up a manufacturing industry here so a larger percentage of the money for production stays in the system.
With the FX issue, what has been the experience for operators like you?
Having access to FX itself is the challenge as it’s very costly. It has increased our cost of solar panel batteries by at least 30 per cent. Right now, we’re running a discount because a lot of people are finding it difficult to purchase these products. Foreign exchange affects everything, with time everything should get better as both factors affect the consumer market.
Nigeria recently launched its energy transition plan to meet net zero targets. What’s your take on it?
I think it can work and work has started. It is also an investment opportunity. To be realistic, Africa is not generating as much carbon as the developed world, so our plan is not because we want to save the planet, it’s mainly because we need power. Investment in the energy transition is a good one. We’re looking at spending billions of dollars over time, which still boils down to management. I must say that the Rural Electrification Agency is really doing their best. A couple of projects are already generating and if managed well would recover funds over time. From information gathered, the oil sector is ready to work with the Nigerian government to push energy transition. It is going to work. Some people have the net zero plan for about 8-10 years from now, while ours is quite longer, about 30 years. I think that is good.