Dr. Soky Amachree Chairman of Sigma-Base Technical Services Limited looks at the West Africa Power Pool and the importance for member countries to put into place critical regulations for power implementation and to guide potential investors through the region. 

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Steady supply of power is the bedrock of economic growth, progress, and development. It facilitates the eradication of poverty and improves security. While developed countries enjoy uninterrupted power supply, developing or under-developed countries suffer chronic epileptic power supply. In Nigeria, more than 65 per cent of the population needs access to electricity. Without reliable power, children struggle to study after sunset, failing to achieve their best. Businesses cannot thrive and create opportunities, and efficient healthcare remains a mirage that leads to avoidable deaths. The same picture is accurate for much of Africa.

The West African Power Pool (WAPP), whose mandate is to ensure the promotion and development of power generation and transmission facilities, and the coordination of power trade between members’ states is a required resource in the pursuit of reliable power supplies.

 

A call for early regulation

To avoid the “Oil Boom-Doom” Syndrome, members’ state of WAPP should ensure that enforceable policies are in place and are in order. This will guide development partners and prospective investors targeting the region’s energy resources to build capacity and prosperity.

In the absence of a reliable power supply, children who are leaders of tomorrow struggle to study after sunset, and we cannot get the best out of them.

ECOWAS Parliament

Nigeria’s President BolaTinubu recently assented to the Electricity Act 2023, which authorizes states, companies, and individuals to generate, transmit and distribute Electricity. This is part of the Presidential Power Initiative (PPI) aiming to modernize and upgrade power transmission and distribution infrastructure across Nigeria by 2025. It endeavors to facilitate investments in critical infrastructure to support power delivery and service to Nigerians. It incentivizes development partners to enter WAPP and invest in all areas of power generation and the community by contributing to their empowerment through private public partnerships supporting critical infrastructure benefiting from reliable power, including roads, schools, and hospitals. Technology Transfer Initiatives (TTI) in partnerships with local companies should be acted upon in the interests of all partners, both development and regional content, in consensual agreement.

Why countries should form management boards

For a structured approach, the development partners should deal with the local content development and management boards of the countries where they operate. Development partners can identify suitable partners to work within the host country through such boards. Nigeria has developed a robust Nigerian Content Development and Monitoring Board (NCDMB). Other countries in the West African power pool could collaborate with the NCDMB and replicate this organization in their host countries for the smooth operation of the WAPP.

More than 65 per cent of the Nigerian population does not have access to electricity.

The critical functions of the NCDMB are;

  • To review, assess, and approve Nigerian content plans developed by operators.
  • To set guidelines and minimum content levels for project-related activities across the oil and gas value chain.
  • To engage in targeted capacity-building interventions that would deepen indigenous capabilities – human capital development, infrastructure and facilities, manufactured materials and local supplier development.
  • To grow and manage the Nigerian Content Development Fund.

To establish, maintain, and operate the Joint Qualification System (NOGICJQS) in conjunction with industry stakeholders.

  • To monitor Nigerian content compliance by operators and service providers. This

will be in terms of cumulative spending, employment creation, and sources of local goods, services, and materials utilized for projects and operations.

  • To award certificate of authorization for projects that comply with the Nigerian content provisions
  • To conduct studies, research, investigation, workshops, and training aimed at advancing the development of Nigerian content.

Governments and power

The need for governments to make policies to represent and protect the true interests of their citizens in WAPP cannot be over-emphasized. Governments are to ensure that there is a positive trickle-down. The effect of investments made into fossil fuels and low-carbon energy domiciled in host communities ensures they positively impact local content and communities served. It will ensure that local content plays a significant role in exploiting investments to build opportunities in their communities. Policies geared towards win-win outcomes for all stakeholders should form the agenda.

Community-oriented production strategy 

Communities in the Niger Delta Region of Nigeria feel that in the past, they have not benefited adequately from the resources sited in their communities and have suffered degradation of their environment caused by imprudent oil exploitation, leaving them without compensation. A study has identified the need for oil and gas companies in Nigeria to operate a policy that is sensitive to community feelings and to work accordingly, out of which the Sigma COPS was born in the 21st century.

Such policies should be geared towards ensuring a win-win situation for all stakeholders including governments

The cardinal objective of the Sigma COPS Model is for the host and local communities to be equal stakeholders, with 10 per cent of oil and gas businesses going into their lands. They are also to be involved in the operation of production facilities to encourage investors and local communities to take necessary steps to protect oil and gas assets and facilities in their communities.

The COPS Model is recommended for implementation in the West African Power Pool Project, as well as other development projects in the African continent.

Goal and objectives of the COPS model

  • Create employment opportunities for young people in local government areas; capacity building, wealth creation, and prosperity.
  • Generate revenue for host communities to embark on developmental projects to generate lasting peace in local government areas in the Niger Delta, empowerment and wealth creation.
  • Provide gas to run host community generators to foster development in the Niger Delta.
  • Generate additional revenue for the government in the form of wealth creation and prosperity.
  • Expected results from the adoption of the Cops model
  • Operates in a win-win Environment
  • Ensures oil and gas operation on a sustainable basis, which is consistent with the sustainable development policy.
  • Creates capacity-building opportunities for the host communities to be involved in oil and gas operations in their domain
  • Creates resources for the host communities of the oil companies’ idle oil fields for their development. Most of these idle fields were abandoned as a result of youth violence.
  • Provides gas for the generation of Electricity for the Host Communities to foster development in the Niger Delta.
  • Increases the funds available for the Government through royalties and taxation of the produced hydrocarbons to foster the Country’s development.
  • Creates opportunities for business, education, and government collaboration for effective capacity building in the industry and host communities in particular. Fig. 1 shows this Model.
  • Brings peace and security to the Niger Delta to support the socio-economic development of the region’s states and reduce the confrontational behavior of youths to the barest minimum, which is peace in the Niger Delta.

In order to avoid the “Oil Boom-Doom” syndrome, the Governments of the countries for the WAPP must ensure that they put specific policies in place and enforce their

Local content development policy for the power and energy industries 

The cardinal objective of the local content development policy should be to transform West Africa’s power and energy industries into an economic engine for job creation and national growth by developing in-country capacity and indigenous capabilities. This will ensure that a greater proportion of the work will be done in the region with the active participation of all sectors of the economy. Oil and gas-producing African countries unite and develop an Africa regional power and energy industries initiative for implementation. Nigeria can take the lead in this initiative. Nigeria passed the long-awaited petroleum industry bill into law, the Petroleum Industry Act (PIA), in 2021. It is recommended that other African states enact such laws.

The purpose of the PIA is to reform the industry for better performance and bring it in line with modern-day oil and gas industry standards of efficiency, effectiveness, and transparency. The Act also gives communities that are either hosts or are impacted by oil and gas activities in Nigeria has a stake in the ownership of petroleum assets through dividend payments, similar to land owner royalty through the instrumentality of host community development trusts.

Other countries in the West African Sub-Region may consider designing and implementing such an Act, allowing national oil and power companies and development partners to invest and build capacity in WAPP in very competitive terms relative to other oil and gas jurisdictions. Furthermore, local companies will also be in an advantageous position to ensure the growth and development of local power and energy in West Africa. It will be a win-win situation for all stakeholders, governments, national power, energy industries, development partners, investors, communities, and local companies.