If we have gas pipelines in Nigeria, the development of the country will be faster than it is now.

Patrick NZEKWE General Manager CLARKE ENERGY

Gas access to power growth in Nigeria

September 12, 2018

Patrick Nzekwe, the general manager of Clarke Energy, talks to TOGY about the market for gas engines in Nigeria, the country’s need for gas infrastructure development and the outlook for power sector. Clarke Energy specialises in engineering, installation and maintenance of reciprocating engine-based power plants and gas engine compression stations.

• On infrastructure: “We need infrastructure and development. If we have gas pipelines in Nigeria, the development of the country will be faster than it is now. The east needs energy and industries, but because of lack of gas they can’t cope.”

• On investment: “The government could invest just USD 2 billion from our reserves into processing plants and pipelines across Nigeria, which would be a positive change and allow growth. If you do that, you will find more industries springing up.”

• On power revenue: “The government should provide a metering system for all people. Put all the penalties in place for those who abuse it and make sure the meters work, then you have an attractive business for investors with cashflow guarantees.”

• On manufacturing: “There are opportunities to manufacture locally and to develop a broader base of consumers. As soon as you are able to do that, you become like an adult in the Nigerian system. As long as you keep importing, you are just like a one-man business; you may have to shut down any time there is a difficulty.”

Most TOGY interviews are published exclusively on our business intelligence platform TOGYiN, but you can find an abridged version of our interview with Patrick Nzekwe below.

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How has the market for gas engines evolved in recent years?
2016 was a disaster for us. The state of the economy was not ideal. People wanted to buy and had the money, but foreign currency was not available for people to buy from outside. The net result was that nothing was sold.
It was a chance to get stronger, and in 2017, things started to improve. Now we are about at pre-crisis levels. People are beginning to make inquiries about investing in power, buying our engines and maintaining their spare parts, which is keeping all of us busy.
In the short term, 2018 looks like a good time for us to expand our horizons from Lagos, which has been the main hub for our business in Nigeria. We are now receiving a lot of inquiries in the eastern part of Nigeria, in Abbah, as well as areas where there is no gas. To be able to go forward, however, gas has to be able to reach these areas. We need infrastructure and development. If we have gas pipelines in Nigeria, the development of the country will be faster than it is now. The east needs energy and industries, but because of lack of gas they can’t cope.

How important is gas infrastructure development in Nigeria?
Flaring is a waste. Some governments in the past wrongly supported it because they didn’t want to invest in gas. However, if you provide gas, industries will spring up at the grassroots because industry wants to run on efficient, concentrated energy. The government could invest just USD 2 billion from our reserves into processing plants and pipelines across Nigeria, which would be a positive change and allow growth. If you do that, you will find more industries springing up. People will be busier, there will be less agitation, fewer local people will be unemployed and the country will be better for it.

What is your perspective on Nigeria’s power sector development?
The current government is doing a lot of work to see if they can improve the power situation in Nigeria. The Ministry of Power is taking the right perspective, talking to the right people and looking at the issues that are most relevant. Unfortunately, the government has a long way to go to be able to attract foreign investors and get the right money for the job.
The government has been promising to launch an effective metering system. But in Nigeria more than 50% of people outside the major cities have not got meters, and it’s difficult to get them to pay the correct money without them. The ones that are installed usually fail. It’s almost equivalent to not having meters at all. The government should provide a metering system for all people. Put all the penalties in place for those who abuse it and make sure the meters work, then you have an attractive business for investors with cashflow guarantees.

What opportunities do you see on the horizon for Clarke Energy in Nigeria?
There are opportunities to manufacture locally and to develop a broader base of consumers. As soon as you are able to do that, you become like an adult in the Nigerian system. As long as you keep importing, you are just like a one-man business; you may have to shut down any time there is a difficulty. Once you can manufacture, you are able to do things at home, and from there you can start thinking of local input in the manufacturing process. If you are producing here, Nigeria is ready for business. In the past everything was imported.
I believe that Clarke Energy can move in the next five years to become a major player in the field by providing energy to industries in Nigeria and to other parts of the region, and we will be very happy to do that and help Nigeria grow and prosper.

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