In line with the Federal Government’s effort to diversify sources of power, the Manufacturers Association of Nigeria (MAN) has signed a memorandum of understanding (MoU) with Geogrid LighTec Limited, a privately held independent power generation company to deliver 15 megawatts (mw) off grid power to the association.
The Vice President, North West zone, MAN, Ibrahim Usman, disclosed at the signing ceremony in Lagos that the embedded 15 megawatt generation which would be within the Ikeja industrial cluster would have five megawatts dedicated to Cadbury with the remaining 10MW to other members.
He noted that the partnership would not only enable manufacturers to concentrate on their core business of manufacturing because of the reliable and affordable power supply, it would also enhance the competitiveness of their goods on the market.
Usman, who remarked that MAN would be paying on per kilowatt-hour basis, advanced that the tariff might be between seven to eight per cent higher than what is being paid to the distribution companies (discos) currently.
Speaking further on the higher tariffs, he added, “The high tariff is acceptable by MAN members because although we have the discos power coming in, but it is very unreliable, and taking into cognisance other expenses that come with self generation along power from the discos, it is affordable.”
On the exact cost of the tariff, Usman maintained that at the appropriate time it would be declared, “Because there are lot of parameters to be considered, hence we can’t declare publicly some information now.”
Chairman, Geogrid LighTec, Emmanuel Ocholi, said the arrangement is commencing with the distribution of 24/7 power generation through the use of gas.He was however quick to note that they do not have control on the supply of gas, thus the hybrid nature of their equipment. “Our hybrid equipment uses gas in bulk, but when there is no supply, we can switch to diesel,” he added.
Asked about the life span of the MoU, the Geogrid boss said it will subsist for as long as they are able to keep their licence renewed as well as meet their own terms of agreement. “But with our current licence expiring in 10 years, we will keep working till then.
Oil and gas expert and a commercial lawyer, Ayodele Oni, argued that the agreement is a significant move because it came in at the right time, when electricity supply was becoming a huge burden for manufacturers.
Oni explained that the partnership would be tap from recent regulation, as the law gives the right to supply power directly to clusters, which before now didn’t have legal and regulatory support.
He noted that notwithstanding that the generation would be more expensive than grid power, but it is cheaper than self-generation, and would impact the economy positively.