Spotlight Publication: Nigeria's Largest Power Generating Station, Egbin Power Plc

SPOTLIGHT ON EGBIN POWER PLC

Special Edition

= Largest power generating station in Nigeria = 1,320 MW installed capacity with 6 Units consisting of 220MW each = The only Steam Power Station in Nigeria = Located in Africa biggest city and fastest growing economy in the world = Over 400 Nigerian engineers working in the plant

CyberSecurity in the Energy Sector: Safeguarding Enterprises and Critical Infrastructure

Sub-Sahara Africa Oil and Gas Prospect: Quick Regulatory Approval as Key to E&P Sustainability

"Since we took over Egbin Power Plant, we have rehabilitated all the 6 units and now it works at 100 per cent of its capacity. We spent over $428 million rehabilitating the facility" - Egbin CEO

Egbin Power Plant Future Outlook: Oil and Gas Republic Media Tour at Egbin Power Plc

$3 $3 $2.5 EDITOR-IN-CHIEF Owoyimika Tobi Timothy CONTENT I TECHNICAL & CREATIVE WRITER Obineme Ndubuisi Micheal SENIOR NEWS WRITER Ojiaku Chima Justin ENERGY CORRESPONDENT Jackson Olagbaju BUSINESS DEVELOPMENT EXECUTIVE Genevieve Aningo BRAND AMBASSADOR Chiamaka Nwokeukwu Nigerian Nollywood Actress CONTRIBUTING AUTHORS Osaneku Monday Nzei

CONTENTS Page 5

Industry News

Page 7

Oil and Gas News

Page 10

Power Sector

Page 13

Cover Story

Page 18

Spotlight on Egbin Power

Page 28

Exclusive Interview

Page 33

Photo Gallery

Page 37

Maritime Industry

Page 38

Middle East Report

Ayobami Adedinni

SPOTLIGHT ON EGBIN POWER PLC

Special Edition

= Largest power generating station in Nigeria = 1,320 MW installed capacity with 6 Units consisting of 220MW each = The only Steam Power Station in Nigeria = Located in Africa biggest city and fastest growing economy in the world = Over 400 Nigerian engineers working in the plant

CyberSecurity in the Energy Sector: Safeguarding Enterprises and Critical Infrastructure

Sub-Sahara Africa Oil and Gas Prospect: Quick Regulatory Approval as Key to E&P Sustainability

"Since we took over Egbin Power Plant, we have rehabilitated all the 6 units and now it works at 100 per cent of its capacity. We spent over $428 million rehabilitating the facility" - Egbin CEO

www.oilandgasrepublic.com

INDUSTRY NEWS

TCN's interim Managing Director is Phenomenal - Dallas

By Obineme Ndubuisi Micheal

Egbin Power CEO, Dallas Peavey has applauded the appointment of the new Interim Managing Director/CEO of the Transmission Company of Nigeria (TCN).

Speaking in an exclusive interview with our journalist, Dallas Peavey who is the Managing Director/CEO of the largest power generating station in Nigeria, Egbin Power Plc, said “We have reached 1,100 MW. I told you that our capacity is 1, 320 MW but it came down to 1,100 MW because at that time, TCN could not take the power because of the issues in their systems which are frequent even today” He said, "If you just came from the control room, you will see we have just 2 units running simply because gas is not always available and TCN’s technical issues. They have a system that is older than our plant. They have

never done any major capital or manpower expenditure.

They have engineers that have almost all retired. The people that they have don’t have the experience or educational level.

"But I will say that over the past few weeks, they have brought in a lot of educated people. You know the new MD of TCN is phenomenal. You have heard people talking about the fact that he is a banker. But where did he start his career? TCN. So, he knows transmission and distribution inside out. But he just started. It’s gonna take him years to improve the system that has been moribund for years, he added”

Industry Leaders and Power Sector Operators to Gather in Lagos for Power Nigeria 2017 Buhari’s public commitment to invest heavily in the power sector, the Power Nigeria exhibition and conference takes place at a critical time for contractors, consultants, distributors and traders to forge strong Informa Exhibitions is set to organize a 3- relationships with international and local days conference and exhibition in Lagos on suppliers.

5 - 7 September, 2017 at Landmark Centre, Lagos. Nigeria’s leading power exhibition, Electricity delivered safely, reliably and Power Nigeria, is dedicated to the affordably is commensurate with the growth burgeoning Nigerian power industry. Prior of a nation and the single, most impactful to this B2B trade event, the organisers of element when it comes to personal comfort.

Power Nigeria, Informa Exhibitions, will According to report, Nigeria produced about gather a large number of leading power 5,000 MW of power on the National Grid for personalities and stakeholders to present about 180 million people in 2016, falling plans for the future of the Nigerian Power extremely short of expectations. Government Sector. incentives have made Nigeria a highly competitive destination with massive With Informa’s strong track record of untapped resources in power (generation to organising exhibitions (including the distribution). world’s largest power event, Middle East Electricity), Power Nigeria is poised to Power Nigeria exhibition and conference has become the country’s main hub for trade become the platform where the who’s who of and knowledge share within the Nigerian the Nigerian power industry - from decision power sector.

The overwhelming makers and industry leaders to experts and sentiment that the Nigerian power market engineers - gather to collaborate towards a has great potential but the sector requires brighter future for the major action. With President Muhammadu

By Obineme Ndubuisi Micheal country. The 2017 edition of Power Nigeria will be its brightest one yet, with over 200 exhibitors from 12 countries and a special country pavilion from the middle east featuring their companies.

The exhibition will be held in conjunction with the three-day Power Nigeria Conference, which starts with the Government and DISCO states of address on day one, where delegates will get to hear from the Hon. Minister of Power, Works and Housing, Babatunde Fashola, NERC, and many others. The second day of the conference will focus on key finance issues of the Nigerian power sector; with the gas to power workshops. Over the years, Power Nigeria has grown to become the place where the Power Industry’s who’s who comes to learn, liaise, and do business.

Consistent growth has made Power Nigeria a must attend event in the country’s energy industry. Come discover the latest services and innovations on 5 – 7 September 2017, 10AM – 5 PM at the Landmark Centre, Victoria Island, Lagos, Nigeria.

INDUSTRY NEWS

Don advocates off grid supply as solution to

By Ayobami Adedinni Nigeria's Energy Crisis “You now look at the enabling law itself i.e. the sector law, the Electricity Power Sector Reform Act 2005. That law assumes that there is nothing called state.

Everything in that law talks about, Federal Government, National grid and if NERC, the regulator does things that only state can do or ought to be doing under the constitution.

“So, that law violates what the constitution says. And pursuant to that law, they now have a lot of regulatory framework- which we call regulations such as regulations on metering, captive among others. Some of these laws also contradict the Act and the constitution,” he said. He stated that the government should not be funding the sector anymore because the sector has been privatised.

An Energy/ Electricity Law Expert, Yemi Oke has advocated for the adoption of off grid energy supply as solution to Nigeria’s energy crisis.

Speaking in an exclusive chat with our correspondent, Oke who is a senior lecturer, Faculty of Law, University of Lagos said because of the weak transmission network of the Transmission Company of Nigeria, (TCN), there is need to enhance the grid’s capacity in order not to collapse the system.

“The same thing happened in the petroleum sector, when those depots were not functioning, we started seeing trucks on the road, taking fuel from Lagos to up North and other parts of the country while government was trying to do a Turn Around Maintenance (TAM) for the Depots, NNPC and the refineries pending that, there must be anunderstanding”, he said.

According to him, a major contributor of this is the Electricity Power Sector Reform Act, 2005 which he said is full of lapses with the He said, “The grid is weak and dilapidated, and not in agreement fine, then decentralise. Don’t put it on the Constitution. He said, “The reason for that is because of a lot of lapses in the grid yet. Later, you can now enhance the grid capacity, so that you can put more framework. When we talk of the legal generated power on the grid. framework, we are talking of the “What I am saying is that we should even constitution of the Federal Republic of look at off grid generation now. The Nigeria---which is the highest of the legal infrastructure of the TCN is weak; they framework that we have. cannot even take 5,000 mega watts (MW).

Forget the assumption that government “We have a problem at hand because the will give us 40,000 MW which s not constitution envisages that both states and realistic nor is it going to be possible. federal governments will be involved in power and that if it is respect of areas The installed capacity is about 5,000 MW covered by the national grid, the national so if we have more than that, we cannot put assembly will have power to make laws it on the grid. “The argument now is that, and also setting up of institutions. why put everything on the grid? The grid is weak. It is like saying, you have diesel or “But if it in respect of areas not covered by the National Grid, item 14 says the state petrol which you want to put into the pipeline. We are saying wait, this pipeline Houses of Assembly will have powers to make laws and also setting up of is weak. Instead of going through the pipeline, if we put it through the pipeline it institutions in the areas of electricity is going to explode. Why not put it in jerry generation, transmission and distribution. can, tanks. Once we have that, the essence The question is, are the states doing that? Is is the people will still have fuel while we the law being implemented? fix the pipeline.

Speaking further, he said the law has done little to enable the Nigerian Electricity Regulatory Commission (NERC) achieve its objectives adding that the starting point is to get the framework right. He stated, “You have to look at the constitution, the Act and the regulatory framework. Are they in line?

Are they able to help the regulator achieve the intended objective in the sector? My honest view is no.

“To that extent, we have been having a lot of problems. This is why we have been seeing a lot of inconsistency in the sector such as Discos not remitting, tariff is low, fraud, not metering everyone that ought to be metered among others that we need to put in much effort to have a solid sector.

“For instance, the moment you signify that you want to prepaid meters, you realise your bill will start to go up astronomically.

“These fraudulent elements are there because the Discos are here to make money even when there is no money to be made from Nigerians.

“But then the regulatory framework should be such that they will make money without undermining the interest and rights of Nigerians. Striking a good balance is what I am talking about. We cannot say the Discos should go away neither can we allow to deny Nigerian consumers of their rights through efficient and effective regulatory framework and regulations,” he added.

LOCAL CONTENTS

TCN commissions 66MVA 132/33kV Power Transformers to Boost Electricity Supply In a bid to ensure further expansion of grid capacity, the Transmission Company of Nigeria has completed the installation and commissioning into service of two 66MVA 132/33kV power transformers in its Katampe and Alagbon Transmission stations in Abuja and Lagos respectively.

In a statement signed by its Assistant General Manager, Public Affairs, Ndidi Mbah, she said that the 132kV voltage level section of the Katampe Substation which operates with 2x 60MVA capacity transformers, has in the past weeks been functioning with only one 60MVA 132/33kV power transformer because the second one developed an internal fault that necessitated its replacement. This according to her has resulted in load shedding

in areas like Gwarimpa, Jabi, Lifecamp, Maitama and Wuse 2, from 1st March to 10th April, 2017.

In her words, "With the successful installation and energizing of a 66MVA 132/33kV power transformer at Katampe by TCN engineers, on Tuesday, 11th of April 2017, the bulk load wheeling capacity of the transmission substation at 132kV voltage level increased from 120MVA to 126MVA. "This means that the substation now has the capability to wheel power at full capacity to distribution load centers. Also, with the installation and commissioning of a 66MVA 132/33kV power transformer in Alagbon Transmission station,

Ikoyi, last week, the station now has a total of 3x60MVA and 2x66MVA power transformers, bringing the total capacity of the substation to 312MVA on 132kV voltage level.

"Consequently there has been improved power supply to Ikoyi, Victoria Island, Dolfin Estate and Marina in Lagos State", she added. She however reiterated its resolve of the company to continue to further expand its grid capacity, to ensure that it continues to efficiently move bulk electricity from generating companies to distribution companies nationwide.

Europe’s Largest Recruitment Firm, Coberon Chronos Group Extends its Recruitment Business into the Nigerian Market

Chronos Consulting has extended its recruitment, payrolling, contracting , RPO and software services into Nigeria with a fully staffed operation in Lagos. Working in partnership with Oil & Gas Republic the Group already has over 2,000 vacancies in the oil and gas sector and over 1,000 vacancies in other key sectors of the Nigerian economy. Here are a few areas in which Oil & Gas Republic and the Coberon Chronos Group are active: Oil and Gas Nigeria is the 13th largest producer of petroleum in the world according to recent report and was the world's fourth-largest exporter of LNG in 2015, and the leading oil producer in Africa.

(The country joined OPEC in 1971). Petroleum plays a large role in the Nigerian economy, accounting for 40% of GDP and 80% of Government earnings. The Niger Delta Nembe Creek Oil Field was discovered in 1973 and produces from middle Miocene deltaicsandstone-shale in an anticline structural trap at a depth of 2–4 km. Chronos Consulting and Oil & Gas Republic are experienced in offeringservices to the oil and gas industry in Nigeria.

Telecommunications Nigeria has one of the fastest growing telecommunications markets in the world, major emerging market operators (like MTN, Etisalat, Airtel, Globacom etc..) basing their largest and most profitable centres in the country. The government has recently begun expanding this infrastructure to space based communications. Nigeria has several space satellites which are monitored at the Nigerian National Space Research and Development Agency Headquarters in Abuja. The Chronos Group and Oil & Gas Republic have over 20 years experience in the Telecom sector and work with some of the world's largest telecom providers.

Financial Services Nigeria has a highly developed financial services sector, with a mix of local and international banks, asset management companies, brokerage houses, insurance companies and brokers, private equity funds and investment banks. Please feel free to contact either Oil & Gas Republic staff or Chronos Group staff for more information about our services in this sector.

Mining/Mineral Resources Nigeria also has a wide array of underexploited mineral resources which include natural gas, coal, bauxite, tantalite, gold, tin, iron ore,

By Obineme Ndubuisi Micheal limestone,niobium, lead and zinc. Despite huge deposits of these natural resources, the mining industry in Nigeria is still in its infancy. Chronos and Oil & Gas Republic can help you find the correct expertise and staff in Nigeria in this critical sector.

Agricultural business Agriculture used to be the principal foreign exchange earner of Nigeria. At one time, Nigeria was the world's largest exporter of groundnuts, cocoa, and palm oil and a significant producer of coconuts, citrus fruits, maize, pearl millet, cassava, yams and sugar cane. About 60% of Nigerians work in the agricultural sector, and Nigeria has vast areas of underutilized arable land. The Chronos Group and Oil & Gas Republic have over 10 year's experience in recruitment for agribusiness projects worldwide.

Other sectors It also has a manufacturing industry which includes leather and textiles (centred Kano, Abeokuta, Onitsha, and Lagos), car manufacturing (for the French car manufacturer Peugeot as well as for the English truck manufacturer Bedford, now a subsidiary of General Motors), t-shirts, plastics and processed food.

LOCAL CONTENT

CSR in Action: Chevron Nigeria’s New Approach to CSR in the Niger Delta Region

By Obineme Ndubuisi Micheal

Mr. Esimaje Brikinn, General Manager, Policy, Government and Public Affairs, Chevron Nigeria Limited

Mr. Esimaje Brikinn was among the keynote speakers at the Sub Sahara Africa Upstream Oil and Gas Summit and Exhibition 2017. The 3-day summit was organized by Zenith Professional Training (ZPT), the event brought together most of the IOCs operating in the Niger Delta region.

Speaking at the summit, Mr. Esimaje Brikinn, General Manager, Policy, Government and Public Affairs, Chevron Nigeria Limited said that, Chevron have a substantial footprint in the Niger Delta region of Nigeria where they are active in oil and gas Exploration & Production (E&P) activities.

“As the Niger Delta people has been persistently requesting for an improvement in their social economic development of their communities and we as a company has taken a bold step of making sure we establish a working relationship with the stakeholders in the communities, he added” In his presentation, Mr. Esimaje Brikinn further explained more about the 2003 inter-ethnic crisis in the western Niger Delta region of which Chevron has several of its operations and facilities in that area. He said, “The crisis has nothing to do with our projects and the relationship we had with the communities. Unfortunately for us, the crisis got into some devastating dimension which made us shutdown our operations for some period of time but as soon as we came back to commence operations we found out that our facilities were destroyed during the crisis” “We told the Niger Delta people that we have been doing our best for the communities and we were able to provide some social amenities for them in terms of infrastructural development, building schools for them and with all these they could have protected our facilities during the crisis, he added”

He further explained that the Niger Delta issues is a sign post to any company looking forward to doing business activities in the region and the issues also serve as a wake-up call to companies operating in the region to be very mindful of the issues on ground and to making sure they contribute enormously for the development of the communities they operate in. Chevron been an IOC operating in the region looked deeply into the issues on ground and came up with a strategic action plan to connect with the community stakeholders and try to understand the level of commitment to be made in contributing to the social economic development of their well being.

executed in order to address their needs and these projects are executed and handled by the community people.

“We also did a follow up on the model to making sure the communities are been carried along organizing various forums and making them understand our motive on how we intend to continue working with them in terms of capacity building, he added”

According to him, the model gave the community the right to take ownership of the kind of capacity building given to them. The communities are the beneficiaries with a full ownership to the projects which is been handled by He said, “A robust engagement themselves through the planning platform was established which led process and execution. Some of to a well organized multithese projects are water, electricity, stakeholder forum in order to get a schools, community scholarship clear picture of the issues, cultures and it has been making great and people living in the community progress in improving their social and coming up with solutions on economic well being. how best to tackle the issues.

He said, “The model creates a “We were able to discuss directly medium for the people to speak out with the community stakeholders their grievances to the community through various meeting, sorting leadership in order to come up with out solutions on how best we can possible solutions and to avoiding contribute to the growth and conflicts between rival development of the communities, communities. It has also created job he added” opportunities, training and build relationship with both Speaking further, Chevon Nigeria communities” came with a different approach this time by setting up teams internally “The model is not only a paperwork responsible for community but it has been tested and confirmed engagement and social investment. by experts in the field of social economic development. Other In achieving this, “We created a IOCs have been asked to copy our multi-stakeholder partnership model for their own operations in model which is well known as a the Niger Delta region as it also got Global Memorandum of a high level of endorsement from Understanding (GMOU). The industry experts, he added” model was our new approach to Corporate Social Responsibility For the sustainability of the model, (CSR) in the region and we engaged there is a continuous monitoring their leaders together to openly and evaluation process on how it discuss what their people want for has been evolving through various their social economic well being. stakeholders meeting looking into what is needed to be removed and “The GMOU is a multiwhat is needed to be added . stakeholder partnership initiative where the communities will have to identify what project should be

OIL AND GAS NEWS

Stakeholders Call for Quick Regulatory Approval as Key to E&P Sustainability in the Oil and Gas Industry

By Ayobami Adedinni

Zenith Professional Training (ZPT) organized a 3-day summit which took place on 5th – 7th April 2017 at Federal Palace Hotel, Lagos.

The event gathered IOCs operating in the Sub-Sahara Africa region.

From left to right, Powell Maimba(CEO,GalanaOil, Kenya), Dapo Ayoola,(Dapo Ayoola Managing Director & CEO ,ZP Training),General Manager, Deepwater Exploration, Shell Nigeria Exploration and Production Company (SNEPCo) Engineer Gbenga Adewuyi, Principal Partner,Darko,KeliDelataa &Co, Ghana, John Darko

Oil and Gas Stakeholders in Africa’s sub Saharan region have called for quick regulatory approval as solution to enhancing the Exploration and Production potentials in the region.

Speaking at the Sub Sahara Africa Upstream Oil and Gas Summit and Exhibition 2017 which took place on 5th – 7th April 2017 at Federal Palace Hotel, Lagos. They identified delay in regulatory approval and limited infrastructural growth and development as hindrances to the prospects in deepwater exploration.

In his presentation, Managing Director, Shell Nigeria Exploration and Production Company (SNEPCo), Bayo Ojulari who was represented by General Manager, Deepwater Exploration, Engineer Gbenga Adewuyi, said there is modern day preference for gas and the available new grounds are in the offshore.

He said, “There are delays in regulatory approval from when you find oil till when you eventually get approval.

You spend an average of 12 years compared to that of Australia which is 3 to 7 years. There is limited infrastructural growth and development where we need to influence the policy makers on how to address the issue of logistics,” he said.

“We contribute less than 10 per cent of the world’s needs whereas we have the potentials for 3 times more. From 2005 to 2014, exploration activities show that we are actively looking for these resources,” he added.

According to him, the issue of insecurity has led to cost escalation implication, high risk projects and high capacity exposure. He said, “This requires a diverse and comprehensive skill set among the various economic blocs across sub Saharan Africa.

How much do we allow the flow among the different trade blocs if we want our investments to be sustainable?

On his part, Chairman, Petroleum Institute of East Africa and Managing Director, GalanaOil, Powell Maimba said local content has to be looked at on the basis of competence rather than to score political gains.

“We don’t have a standardized fiscal policy in sub Saharan Africa. We have ECOWAS, East African Community, and Southern African Development Community, (SADC) but there is no harmony.

Our strength lies in understanding our environment. We need world wide access to skilled workforce.

He said, “When people are looking for oil, they have no idea what will come up out of it. It is not about the big machines but how far you can do to explore the opportunities that the oil and gas provides. The role of the politician is not to determine economic activity.

“We should not frustrate mega projects because of local content. Local content has to be looked at on the basis of competence. Thus , it has to be redefined,” he added.

POWER SECTOR

FG Approves Payment Plan to Address Liquidity Issues in the Nigerian Power Sector

By Obineme Ndubuisi Micheal

Osogbo - Nigeria’s Minister of Power, Works and Housing, Babatunde Fashola announced that the Federal Government have taken action to approve a payment assurance guarantee to address the liquidity challenges in the Nigeria Power Sector. The announcement was made at the 14th Monthly Power Sector Operator’s Meeting hosted by Transmission Company of Nigeria which was presided by the Hon. Minister of Power, Works and Housing.

Speaking at the event, the Minister said, Government is very committed to tackle the challenges in the sector. The Government is now stepping up brilliantly to its responsibility by confronting the challenges and in achieving this, it has reconstituted the regulatory commission to perform their

these issue and will allow them to take their decisions. Those who do their work diligently, honestly and deliver accordingly will receive their entitlement and payment" According to the Minister, there are proposition across the entire value chain of the Power Sector that will enable operators to perform their duties efficiently.

As side from the verified DISCOs debts, government have been working smart in verifying other debts incurred but unfortunately some of the DISCOs duties to its maximum capabilities. The Minister used the hasn’t been able to provide the medium to clarify issues and complains from some DISCOs information that is needed and the association saying that the N701 billion recently released is Minister said, "we will not pay debt not enough for the industry. that cannot be verified" The Minister said, “We didn’t sign contracts with an association but we signed a business contract with 11 DISCOs companies. The regulators knows what to do on

Nigeria's New Energy Recovery Program to Mitigate Issues on Gas, Transmission, Metering and Load Reductions

By Obineme Ndubuisi Micheal The Federal Executive Council of Nigeria (FEC) has approved an energy recovery program to resolve issues on gas, transmission, metering, load reduction, contract enforcement, customer’s service and consumer protection among others.

The announcement was made known by Hon. Minister of Power, Works and Housing, Babatunde Fashola at the 14th Monthly Power Sector Operators Meeting hosted by the Transmission Company of Nigeria (TCN) in Osogbo, Osun State.

“Every loss must be accounted for and paid for. This is a business and in every business that is properly managed when losses begin to occur those who are responsible for managing the business will be held accountable for the losses either by losing their job, make a refund, resign from the job. We are heading into that direction where any losses will be accounted for whether it is from the Government or the private sector, the Minister added”

The Minister also said, “it is high time for every operators involved in the business to perform their duties as required or quit the The Minister said, Government is determined to enforce policies on the sector power sector business. As we all know, not to the operators only but including to its large part of the Nigerian Power Sector is own self. Government is not above the low. currently managed by private investors and

therefore the responsibilities for compliance for loss reduction, service efficiency, improved customer service and general access to power will be strict to the operators in order for them to perform efficiently” In conclusion, The Minister urged the operators to work according to the terms and conditions under which they acquired the assets and understand fully why they are contracted to do the work and also know the consequences involved if they are unable to deliver as expected.

POWER SECTOR

Federal Government will not pay debt that has not been verified – says Fashola

By Ayobami Adedinni

Nigeria’s Minister of Power, Works and Housing, Babatunde Fashola has said that the government will not pay for debts owed to DISCOs that have not been verified.

The Minister made this known at the 14th Monthly Power Sector Operators meeting held in Osogbo, Osun State at National Control Centre. The event was hosted by the Transmission Company of Nigeria (TCN).

The Minister said, the government is working hard to ensure that the debts are paid only when they are verified accordingly.

He also said that, ”On the issue of debt, government is verifying DISCOs’ debt. We will not pay any debt that has not been verified. There are some DISCOs that have not

submitted their report in order to be Speaking further, he urged electricity verified but I want to assure you that customers to stop acts that are we are verifying those that have done capable of compromising the sector so” adding that goverment will ensure Since February, government has been full implementation of the law for working in stepping up to its any erring customers. responsibilities adding that the recent ”Customers must understand that statements by some DISCOs recently Energy theft is a serious offence. will not deter government from its Stop assaulting DISCOs staff, he duties saying that the governmnt does added" not have contracts with association.

He said, ” Recently, some DISCOs “Those who damage power assets are association have been saying that the economic saboteurs.If you perpetrate N701 billion recently released is not this act and have doubts, go and seek enough for the industry. We did not profesional advice because we will sign contracts with any association ensure the full enforcement of the but the 11 DISCOs. regulation.

“There was a transformer problem in “We have paid N374,551 million Abuja and it was me the customers debt owed by the Federal Secretariat were calling. You must be ready to to Abuja Disco and We will make serve. sure we track every loss and make “If you are not ready to serve because sure those losses are accounted for,” you are in doubt,go and seek he added. professional advice over your obligations, ” he added.

COVER STORY

By Riaan Badenhorst

I

n today’s highly interconnected world, reliable energy delivery requires cyber-resilient energy delivery systems. A country’s security, economic prosperity, and the well-being of its citizens depends on reliable energy infrastructure.

grids) is a reality, however these systems can infrastructure, without impacting on the be highly exposed from an IT security operational continuity and consistency of perspective, which creates major challenges technological processes. for the electric power sector.

Kaspersky Lab’s solution protects SCADA The risk of cyber-attacks in the energy sector level control centers and Substation is greater than ever before and,as a result, IT Automation Systems on every level: upper security has become a key point of level of automation including: Servers, Malicious attacks on industrial systems – discussion within the industrial sector.

HMI, Gateways, Engineering workstations. including industrial control systems (ICS) Modern electrical power grids are complex Secondary automation equipment: and supervisory control and data acquisition networks, with integrated automation and Protection relays, Bay Controllers, Merging systems (SCADA) – have increased control functions, that communicate through units, RTU and other substation bus and significantly in recent years. As the Stuxnet open protocols and do not have sufficient process bus IED and overall network and BlackEnergy attacks have shown, one built-in cybersecurity functions to combat infrastructure. infected USB drive or single spear-phishing the increasingly sophisticated range of email is all it takes for attackers to bridge the security threats they face. air gap and penetrate an isolated network.

Traditional security is no longer enough to An effective security approach and protect industrial environments from cyber solutionis needed, to further help the energy Kaspersky Lab’s recent threats. As threats targeting critical sector in managing this. Such an approach to report on industrial infrastructure increase, choosing the right cybersecurity in the energy sector must advisor and technology partner to secure accumulate intelligence on the latest threats, cybersecurity found your systems has never been more in order to develop protection technologies that 92% of externally important. that are effective. This is especially true for industrial infrastructure, which has specific available industrial As a result of technology innovations, ‘self- threats, highly customised hardware and control system (ICS) contained’ electrical power control systems software, and strict requirements for can no longer be considered isolated. Rather, reliability. devices use open and most are now globally integrated, insecure Internet connecting with other corporate services. In Kaspersky Lab offers Kaspersky Industrial the energy sector, new levels of connectivity, CyberSecurity (KICS) for Energy, which is connection protocols. combined with the pervasiveness of IT and dedicated to helping energy companies Internet technologies in daily life (smart secure every layer of their industrial

COVER STORY

E

lectrical power equipment automation, control and protection are no longer handled by closed systems and, as things stand, detecting a potential threat can be extremely difficult, both technically and organisationally. The energy sector needs to start paying very careful attention to IT security of their industrial infrastructure.

Energy enterprises need to bolster their defenses to combat increasingly prevalent cyberattacks and avoid the nightmare scenario of complete loss of service – not to mention the impact that this would have on citizens and society in general, should an attack happen.

There may be some overlap in the threats, however there are significant differences between the cyber securityrequirements of ICS environments and those of general business.Corporate environments focus on safeguarding confidential data; when it comes to industrial systems,where every minute of downtime or error counts, uninterrupted operations are the ultimate priority.This is what distinguishes industrial cybersecurity from other businesses – and makes working withthe right security vendor so important.

Industrial cybersecurity solutions should include three key pillars: • A process-based approach to security implementation • Employee awareness/education • Technologies created specifically for industrial environments

the energy sector that need more attention, in order to safeguard enterprises and critical Infrastructure in thisindustry. These include: • Open and unprotected communication lines between protection and control system components, as well as between power infrastructure facilities.

• Lack of cybersecurity awareness among employees - a limited number of technical personnel maintain large numbers of devices that are oftendistributed on a territory and function without permanent monitoring.

On-site personnel often lack even a basic knowledge of cybersecurity.

Riaan Badenhorst, Managing Director, Kaspersky Lab Africa industrial cybersecurity. It’s a process that begins withan audit, prepares people for change and moves through gradual roll-out with minimal disruption.

• People: Every employee – from business to factory floor – plays a role in cybersecurity.

Trainingand education, such as Kaspersky Industrial Protection Simulation (KIPS) game, is vital.

• Technology: Kaspersky Lab has developed solutions based on unique technologies, designed specificallyfor industrial security needs. Fault-tolerant and non-disruptive, they can even work in air-gap conditions.

Safeguarding Enterprises and Critical Kaspersky Lab’s industrial cybersecurity Infrastructure in the Energy Industr:y approach is holistic: Through our research, Kaspersky Lab have • Process: There’s no out-of-box solution for identified a few key challenging areas within

• Security requirements are not followed information security requirements are rarely considered in the device or software design and development processes for technological infrastructures.

• Complexities of contractor access control the use of contracting organisations for certain types of maintenance work is common.Consequently however, it is extremely important to provide only temporary access to a limitedamount of equipment that has no influence on other system components, and cancellation ofaccess on completion of the work is vital.

• Long lifetime of vulnerable components the lifetime of devices and protection and control systems is 20-30 years. This means that insecure systemsinstalled today will only be replaced in a couple of decades or so.

In addition to this, the lack of guidelines defining actions to be taken when suspicious activity is detected within automated systems, also leads to an organisation being vulnerable. Furthermore, the lack of documents and practices relating to the

investigation of disturbances in technological environments - including malicious influence on control systems through information technologies, also leads to further vulnerability (for example, due to their age, some reference documents for the investigation and classification of technological disturbances do not even consider cybersecurity incidents as a possible cause of malfunction).

If such an incident even takes place, the concern is that the real causes will not be revealed. As a result, the appropriate measures will not be taken and the incident may reoccur. Given these realities, it is evident that the energy sector needs to invest in IY security that effectively safeguards their infrastructure and takes all of the above into account.

The IEC 62351 “Power systems management and associated information exchange - Data and communications security” standard describes in detail the possible tools for complex information security provision at electric power facilities. However, most of the proposed solutions can only be implemented with a complete replacement of automation devices as soon as they require format and communication protocol procedure modifications.

Even though a full implementation of IEC 62351 looks like a distant prospect under the circumstances, part of the requirements can be fulfilled and applied to modern systems. Kaspersky Industrial CyberSecurity (KICS)is a holistic solution for industrial infrastructures that fulfills these requirements. companies using Kaspersky Industrial CyberSecurity are Latvian SIA VARS that specializes in the storage and shipment of liquid chemicals; TANECO Russian oil refining company that is part of Tatneft Group.

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Latus SARDZE and Kaspersky Lab worked together to identify the major priorities for the deployment of Kaspersky Industrial CyberSecurity. The operating system had to be rebooted within a strict time period, a process window had to be created, resource consumption by the product needed to be manageable and notifications could not be shown on the ICS/SCADA operator’s display.

A number of factors make the terminal unique: it is located in a free economic zone of an ice-free deep-water port, has convenient transport links and collaborates closely with chemical and petrochemical terminals located nearby.

The VARS petrochemical terminal includes several key sites with critical infrastructure: • A loading/unloading platform, equipped with loading points that can simultaneously handle 12 rail tank cars or 20 rail containers,

Case Study: Kaspersky Industrial CyberSecurity

COVER STORY

SIA VARS SPECIALISES IN THE STORAGE AND SHIPMENT OF LIQUID CHEMICALS (ACRYLONITRILE), OVERSEEING THE JOURNEY FROM RAIL TO SEA SHIPMENT The company is the only petrochemical terminal in the Baltics for receiving, storing and shipping acrylonitrile. It handles 205,000 tonnes of acrylonitrile a year and operates on a 24-hour basisusing Kaspersky Industrial CyberSecurity.

No more than 10 people are employed across all of these key sites, making efficient process automation key to the safe operation of the business. enabling product loading at a rate of up to 110m3/hr • A tank farm of six tanks, each holding 2,000m3 • Onshore and offshore product pipeline sections - two strings with a diameter of 200mm and each with a pipeline length of 1,200m • A gas cleaning unit designed to capture and clean acrylonitrile vapours from exhaust gases that form during loading and unloading operations and during storage in tanks • A fixed offshore shipping berth Challenge As operations at VARS involve the handling of hazardous toxic materials, it is very important to eliminate any human errors.

Operational processes are therefore automated and managed by ICS/SCADA. Because of this reliance on automation, information security is critical. A random virus attack or internal security breach may present a threat not only to the business itself but also to employees and the environment, as the company is located only 120 metres from the Baltic Sea and is very close to the populated area of Ventspils. The stable running of the shipment terminal is essential to the business.

“If the VARS terminal stops operating, this could disrupt the normal functioning of the plant, which would cause significant financial losses and technology problems associated with the restarting of the chemical facility,” says VARS Technical Director,

Roman Yanukovich. The fact that this is an industrial network, however, means it is impossible to use standard IT security software designed for corporate environments.

The Kaspersky Lab Solution “Having spoken with our partner SIA Latus SARDZE and having studied the market, we opted for the Kaspersky Industrial CyberSecurity solution to protect the industrial control system for the acrylonitrile shipment and storage line,” says VARS Technical Director, Roman Yanukovich.

“What interested us most was the application control whitelisting mode that only allows trusted programmes to be launched.”

Roman Yanukovich, Technical Director, SIA VARS also said "Kaspersky Industrial CyberSecurity meets thier requirements in full and has also enabled functions such as device control as well as centralised control and monitoring of the protected units.“

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ANECO is a Russian oil refining company and part of the $15 billion Tatneft Group. The company was created in 2005 to drive oil and petrochemical production in the Tatarstan region of the country. It is the first industrial facility of its scale built from scratch in post-Soviet Russia. The project continues to increase production, contributing significantly to the Tatarstan economy. By unit capacity, Tatneft is now Russia’s largest oil refinery.

The next phase of development will see TANECO expand its mix of petroleum products in line with international production standards and environmental compliance.

TANECO’s strategy is to focus on hi-tech, efficient and environmentally friendly oil refining processes. The company plans to create a range of oil-based products, strengthening vertical integration within the Tatneft Group.

Challenge TANECO’s success is heavily reliant on the continuity of manufacturing processes. The company uses industrial control systems (ICS) to deliver a technology edge over the competition and minimize production costs.

However, the growing level of production automation and the use of technologies originally designed for corporate networks in its industrial infrastructure have exposed the company to the risk of cyber-attacks.

COVER STORY

TANECO PROTECTS VITAL OIL PRODUCTION

TANECO initially brought in Kaspersky Lab to audit the IT security of its rail discharge terminal handling vacuum gas oil (VGO) supplies. Kaspersky Lab was then challenged with implementing a pilot project to demonstrate cyber security functionality for operator/engineering workstations and SCADA servers.

attempt by an outside laptop to one of the controllers. The attackers were attempting to modify the operation settings of a sensor.

expanding the availability of the industry’s expertise in a way that no other private security vendor has done before.

Part of the cybersecurity system would also need to monitor the integrity of the industrial network and control the critical parameters of the process flow. The requirements also stated that the solution should not interfere with the existing industrial control system.

“The project demonstrates that solutions like this can be used successfully with industrial facilities. TANECO plans to further expand cooperation with Kaspersky Lab in providing security for its industrial networks.”

Kaspersky Lab actively collaborates with other vendors and organisations, such as OPC Foundation, a global organisation establishing data and information transfer standards for multi-vendor, multi-platform, secure and reliable industrial interoperability independent from markets.

The Kaspersky Lab solution Marat Gilmutdinov, Head of Industrial Control Systems Department, TANECO, says the business has worked with Kaspersky Lab for years: “We’ve relied on Kaspersky Lab for many years to protect our corporate network. We didn’t think twice when it came to choosing who to trust with the information security of our industrial facilities.

“Having analyzed the potential threats faced by hi-tech oil refineries, we opted for the Kaspersky Industrial CyberSecurity solution by Kaspersky Lab. It was important for us to buy a solution developed domestically by a vendor capable of providing prompt assistance with any possible issues during deployment and operation.”

Marat Gilmutdinov, Head of Industrial Control Systems Department, TANECO said that “ The performance of Kaspersky Industrial CyberSecurity exceeded all our expectations. Just months after deployment, the solution detected an unauthorized connection attempt by an outside laptop to one of the controllers.”

Results Gilmutdinov says the project to secure the VGO discharge terminal was completed successfully, with Kaspersky Lab experts working alongside TANECO’s in-house team: “The capabilities of Kaspersky Industrial CyberSecurity exceeded all our expectations. Just months after deployment, Kaspersky Industrial CyberSecurity detected an unauthorized connection

Prompt detection of Cyber threats targeting programmable logic controllers helps to enhance overall protection of the process control system.

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oday’s approach to cybersecurity highlights the importance of accumulating intelligence on the latest threats, in order to develop protection technologies. This is especially true for industrial infrastructure, which has specific threats, highly customised hardware and software, and strict requirements for reliability. As a security vendor, we have years of experience analysing threats and helping industrial operators with threat prevention and detection, incident response, staff training, and the prediction of future attack vectors. We are confident that sharing intelligence, or, in a broader way, exchanging knowledge between vendors and operators, is an important step towards more secure critical infrastructure. By establishing Industrial Systems Computer Emergency Response Team (known as Kaspersky Lab ICS-CERT) we are

Protecting ICS environments calls for a very different approach from that used for securing business IT systems. For business IT networks, the first priority is maintaining the confidentiality of sensitive business data – and, although availability of the IT service is important, it’s not as vital as confidentiality and integrity. However, the reverse is true for industrial control – where continuous availability of the process is paramount. It’s all about protecting the process and eliminating disruptions.

The other vital difference is related to the technologies that are used in ICS environments. Although business IT networks are largely based on a few standard operating systems, applications and hardware components, this isn’t the case for industrial systems.

ICS environments can be extremely customised and complex – full of proprietary technologies, SCADA servers, HumanMachine Interfaces, PLCs and legacy or obsolete sub-systems. This adds to the security challenge as every business’s control infrastructure is unique and the security solution has to be tailored to fit this.

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Egbin Power Plant is at the Forefront of Nigeria’s Energy Revolution Egbin Power Plant is located at Ikorodu, a city in northeast Lagos State, Nigeria. It is located along the Lagos Lagoon and shares a boundary with Ogun State. The Plant is the largest power generating station in Nigeria and one of the largest in the West African sub-region with an installed capacity of 1,320 MW consisting of 6 Units of 220MW each. Not only by the integrity of its generating capacity.

Transmission Company Of Nigeria (TCN) Issues: Oil and Gas Republic Journalist in an exclusive interview with Egbin CEO, he said, "The power plant generating capacity is 1,320 MW but it came down to 1,100 MW because at that time, TCN was unbale take the power because of the issues in their systems. In the control room, there are only 2 units running simply because gas is not always available and TCN’s technical issues. They have a system that is older than Egbin power plant"

Despite all the challenges in the Nigerian power sector, Egbin has been thriving and is at the forefront of Nigeria’s Energy Revolution. Some of the key issues is highlighted below as it becomes a major challenge:

Breaching the gap and improving the management system, "TCN should bring a lot of educated and experienced professionals that knows very much about transmission and distribution systems in and out. In doing this, there will be improvement in the system that has been declined over the past years, Egbin CEO said”

Liquidity (lack of funding): Given that the electric power sector is an unbroken interconnected chain of activities from generation to transmission to distribution to end users at homes, offices and industries, its alarming liquidity challenge certainly becomes one of the common issues in the sector.

The investment in the power sector requires huge amount of funds, noting that the non-availability of adequate fund constituted a hurdle to speedy development of the sector.

To addressing these liquidity challenge, all players should call for more investment and stick to the specified rules and regulation governing the Nigerian power sector.

Inadequate Gas Supplies: Sabotage of gas pipelines has decommissioned power plants and their ability to provide adequate power supply.

Obsolete Equipment: Prior to the privatization of the plant in November 2013; most of the auxiliaries like the demineralization plant were not functional, spare parts necessary for plant operation and preventive maintenance were unavailable and that most of the equipment were obsolete. To continue enjoying and increasing the plant capacity, the equipment should be upgraded to latest technological solutions.

Tariff: Nigeria Electricity Regulatory Commission (NERC), being the regulator for the industry has the mandate to approve tariffs. In an effort to make electricity tariffs more affordable, NERC should provide a cost reflective tariff for the operators based on prudent costs and create an enabling environment, while at the same time protect the interest of electricity customers to ensure they get value for money.

...KERL has turned around the plant and operated the assets efficiently and satisfactorily since take over.

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gbin Power Plc hosted a media tour for Oil and Gas Republic journalists in order to provide them valuable insight on the challenges and success stories recorded since take over. The objective was to globally expose and showcase the capabilities the plant has possessed in power generation to the entire nation.

Oil and Gas Republic is an international media and publication organization covering the entire value chain of Energy, Mining, Oil and Gas Industry. The media tour at Egbin Power Plant was an interesting journey to discover the potentials and giant behind the Nigerian Power Sector.

The Plant is the largest power generating station in Nigeria and one of the largest in the West African sub-region with an installed capacity of 1,320 MW consisting of 6 Units of 220MW each. Not only by the integrity of its generating capacity, but also because of the quality of industry professionals working in the plant.

Egbin Power Plant was handed over to KEPCO Energy Resource Limited (KERL) in November

2013 by the Bureau of Public Enterprises (BPE) as part of the Nigerian Federal Government power sector privatization program. Despite the wide-ranging challenges and increased operating costs, KERL has turned around the plant and operated the assets efficiently and satisfactorily, investing substantially in the plant since take over. Egbin is constantly involved in deploying technology and empowering its people to ensure it significantly reduces the environmental and public health impacts of its operations.

REGIONAL PROFILE

FEDERAL REPUBLIC OF NIGERIA

LAGOS STATE

The City of Lagos is Africa's Largest and fastest growing Over 1,000 people enter Lagos State every economy in the world

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he city of Lagos, officially called Lagos State, is a state located in the southwestern geopolitical zone of Nigeria. Lagos has a rich history of economic growth and transformation although it covers the smallest area of Nigeria's 36 states, occuping an area of 3,577 sq km. 22% or 787sq. km. Lagos State is the most populous city in Nigeria, fifth largest economy in Africa and the seventh in the world.

The latest reports estimate the population at 21 million, making Lagos the largest city 3Founded: May 27, 1967 in Africa. Ikeja been the capital city of 3Area: 1,381 mi² Lagos State, is a well planned, clean and 3ISO 3166 code: ISO 3166-2:NG 3Population (2006 census) quiet residential and commercial town • Metropolis 8,048,430 with shopping malls, pharmacies, • Estimate (2012 by LASG) government reservation areas and Murtala 16,060,303 Mohammed International Airport. It now 3Points of interest: Lagos Island, boasts a shopping mall, Ikeja City Mall, Victoria Island and much more.. which is the largest mall in the Mainland of 3Lagos Metropolitan Area: Ìlú Èkó Lagos State. Some suburbs include (Yoruba) Ikorodu, Epe and Badagry, and more local 3Nickname(s): ""Eko akete"" Lasgidi 3Motto: Èkó ò ní bàjé o! councils have recently been created, bringing the total number of local governments in Lagos to 57 (This includes lagoons and creeks, such as Lagos Island, Local Community Development Areas or fringing the southwest mouth of Lagos LCDAs).

Lagoon while protected from the Atlantic Ocean by barrier islands and long sand Today, Lagos has emerged as a major hub spits such as Bar Beach, which stretch up for the headquarters of national and global to 100 kilometres (62 miles) east and west companies and the complex business and of the mouth. professional services in diverse industries such as: consulting, manufacturiing, construction, oil and gas, agriculture, telecom, markteting, legal, health etc. The city of Lagos occupies an area of 3,577 sq km. 22% or 787sq. km of which consists of

day in search of business and job opportunities; and the state welcomes them with open arms. Through various initiatives, the state has been able to create millions of jobs for its millions of people and also grow its economy. Its government in December 2014 articulated the Lagos State Development Plan (LSDP) for 20122025. The plan aims to transform Lagos into a model megacity that is productive, secure, sustainable, functional and safe.

The main “pillars” of the vision are economic development, infrastructural development, social development, security and sustainable growth.

January 26th, 2017, Lagos State Governor Akinwunmi Ambode made history when he disbursed about N1 billion to 705 beneficiaries of the Pilot Scheme of the N25 billion Employment Trust Fund (ETF), an initiative of his administration to drive the growth of the Micro, Small and Medium Enterprises (MSMEs). The partners include Price Waterhouse Coopers (PWC), which verified all the applications and auditted the processes, Fate Foundation, LEAP Africa, Nigerian Association of Small Scale Industrialists (NASSI), Women in Management, Business and Public Service (WIMBJZ), National Automobile Technicians Association (NATA) and Cooperative Societies, which provided applicants for the pilot scheme through their membership.

LAGOS STATE: Future Proofing City

Lagos welcomes one of the biggest single power generating stations in Africa, Egbin Thermal Power Station

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he decision to site a thermal power station in Lagos metropolis came up in 1982 by the Federal Government of Nigeria under President Shehu Shagari. The Egbin Power Plant is located at Ijede, near Egbin Town of Ikorodu Local Government of Lagos State. The power station is located about 40 km North East of the City of Lagos. It is situated by the Lagoon around Ijede village. Egbin Power Plant, one of the biggest single power generating stations in Africa, with an installed capacity of 1320 MW consisting of 6 Units of 220MW each.

Egbin (part of Ijede) was a settlement for peasant fishermen and farmers but was displaced to give way for the project with its housing estate and the people met there were resettled at Ipakan community leased from Ijede People, the largest portion of the land was collected from different families in Ijede Town. The first unit of the plant was commissioned in July 1985,while the last was commissioned in September 1986.Egbin generates almost a quarter of Nigeria’s electricity.

Lagos State been the fifth largest economy in Africa, welcomes a large number of multinational companies and is home to almost half of Nigeria’s skilled workers. It is one of Africa’s biggest consumer markets and boasts a higher standard of living than anywhere else in Nigeria. With the large number of companies

trooping in to Lagos, it has made the economy to be in the hands of the private sector. The Lagos State Government has formulated policies that will make the private sector to thrive in the State and providing adequate security and infrastructure development. The construction and installation of Egbin Power Plant in Lagos is part of the success stories in the State. Lagos State Government has also continued to execute developmental projects expanding the infrastructural profile of the state's landscape and also instituting numerous welfare and empowerment schemes for its citizens.

Ikorodu is the fastest growing exurb near the Lagos metropolis Comprehensive College Aga, Government College Ikorodu, Ipakodo Grammar School, Shams-El Deen Grammar School, Ikorodu High School, De-Multilaurel comprehensive Seatos Schools, Ikorodu, Ikorodu is the fastest growing exurb near the college, Lagos metropolis, owing in part to the influx Government Technical College, Oriwu Senior Model College, Civil Service Model of people from Ikorodu's surrounding towns and villages attracted by the town's proximity College, Igbogbo, Goshen International School, United High School, Oreyo Senior to Lagos. Within the Ikorodu area, there are over 50 public primary schools and 12 Grammar School, Elepe Senior High School, secondary schools. Ikorodu boasts on several Yewa Grammar School, Aga-Ikorodu, Lagos private nurseries, primary and secondary State Polytechnic Ikorodu schools, and one tertiary institution.

More interesting, Caleb University is a Local secondary schools includes: Royal Le private university located in the Imota area of Hope International School, De-Young the town.

The town of Ikorodu itself is home to branches of several established Nigerian banks.

Ikorodu is a city and local government area in Lagos State, situated approximately 36 km north of Lagos, Nigeria. It is located along the Lagos Lagoon and shares a boundary with Ogun State. At the 2006 census the population was 535,619.

Ikorodu is bounded to the south by the Lagos Lagoon, to the north by a boundary with Ogun State, and to the east by a boundary with Agbowa-Ikosi, a town in Epe Division of Lagos State. The town has grown significantly in the past 40 years and is divided into sixteen or seventeen "Ituns" or minor areas. The main industries in the town are trading, farming and manufacturing.

Nearby major towns include Imota, Ijede, Igbogbo and Bayeku, all of which constitute their own Local Council Development Area with their own traditional rulers (Obas).

Together these areas make up Ikorodu Division. Ikorodu Division has a large industrial area containing several factories.

LAGOS is my Success Story LAND OF BUSINESS

50 YEARS

...AND STILL COUNTING

Dallas Peavey

SUCCESS STORY

NIGERIA

Dallas M. Peavey, Jr., MD/CEO Egbin Power Plc

Track Record at Egbin Power Plc

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5 years ago, when we took over Egbin Power Plant none of the 6 units at the facility had ever been overhauled but since we took over Egbin, we have overhauled 3 of the 6 units meaning that the remaining 3 units have not been overhauled. We will start overhauling the remaining 3 units this year as we have a power purchase agreement (PPA) with the government- NBET that will last for 20 years and which has already began since October, 2013. Currently, we have 17 years left on that agreement.

Based on the agreement, if we don’t perform, we won't get money.

We have spent over $428 million rehabilitating the Egbin facility. There was one unit 6 that had been down for 12 years but we have done a proper rehabilitation on it and it is now working 100 per cent of its capacity. It costs us $778 million when we purchased the facility.

In terms of job creation, we employed 107 graduate engineers from Nigerian universities and we have integrated them into Egbin and our affiliate companies such as Ikeja Electric and First Independent Energy. As we speak, we currently have 400 Nigerian engineers fully employed at Egbin. In achieving this milestone, we trained our engineers to be more efficient and also understand how the plant operates.

History: Egbin Transition from a Government Agency to a fullfledged Private Commercial Organization

Following the transition from a government agency to a fullfledged private commercial organization, Egbin Power PLC’s perspective to sustainability is gradually transforming to one of stakeholder value creation. Sustainability is at the heart of its operations, services and maintenance programs, by these means, the company ensure that they are always living its core values.

In line with the Board Charter, some of the main responsibilities of the Egbin Board of Directors include company policy formulation, enterprise risk management framework design, performance accountability and responsibility, corporate governance and MEMART adherence.

Others are ensuring effective internal control system, performance appraisal of senior This is captured through management and board members, SPICES: and overseeing a sound Safety: We ensure safety in all our communication mechanism areas of operations. through the Board approved Professionalism: To deliver on all communication policy and our endeavors with the highest level effective stakeholders’ dialogue. of professionalism The instruments of sound corporate Integrity and Discipline: To governance are designed and maintain integrity through approved by the Board of Directors discipline in all our actions of Egbin Power PLC for Commitment to Stakeholders: To implementation and execution by maintain our commitment to the Corporate Governance and deliver quality service to all our Compliance Department of Egbin stakeholders Power Plc to foster the values, Environmental Consciousness: principles, standards and norms of To ensure all our operation are behaviours enshrined in our environmentally friendly corporate governance guidelines, Sustainability: To remain codes of ethics and human resource committed to building a sustainable guidelines. business.

In ensuring that the goals, Upon takeover of Egbin Power objectives, policies and corporate PLC by KEPCO Energy Resource strategy established by the Board of Limited (KERL) – the preferred Directors of Egbin Power PLC are bidders for the power asset, the completely executed and achieved, organization held its inaugural the daily operations of Egbin Power board meeting in November 2013, PLC have been consigned to the where a new 7-member board was direction and control of the inaugurated and the Board charter executive management team led by guiding the operations of the Board the Managing Director and Chief approved.

Executive Officer - Dallas Peavey Jr.

EGBIN POWER PLC

New directions, new challenges Egbin Power Plc was officially handed over to KERL in November 2013 from a government managed to a private sector managed power sector. This will definitely take sometime and it is also a learning process by all of the industry players. Despite the challenges in the entire value chain which includes debt owed, KERL has turned around the plant and operated the assets efficiently and satisfactory, investing substantially in the plant since take over. As part of its continuous efforts in ensuring transparency and that the assets, operations and relationships of the organization are satisfactorily and responsibly managed, through adherence to international best practices.

Key Facts About Egbin Power Plant

400 engineers working at Egbin Power Plant

Capacity: 1320MW

N106 billion (naira)

largest power generating station in Nigeria consisting of 6 Units of 220MW each.

debt we are owed till date

$428 million (USD)

$35 million (USD) other accumulated debt we owe

$1.4 billion (USD) overall investment at Egbin Power Plant

6 Units at Egbin consisting of 220MW each

spent on rehabilitating the facility

N40 billion (NAIRA) debt we owe gas companies

SUCCESS STORY

EGBIN POWER PLANT MODEL

Over 6 million homes in Nigeria receives Electricity Supply from Egbin Power Plant Egbin Power Plc which is located within Egbin Town, in Ikorodu Local Government of Lagos State, South West Nigeria, is the largest power generating plant with over 30 years of operation. Egbin contributes over 20% to the overall generation output of electricity in the country.

Egbin operates a closed cycle system of power generation. The process involves getting ground water from the wells, after which the water is pre-treated and separated into Portable water (Human Consumable) and Process water.

The process water is further treated, through different resin vessels, ranging from anion, cation, mix-bed resin vessels, According to Egbin CEO, every etc., after which it comes out as megawatt, 1100 homes are provided with light. When you multiply that 1,100 times demineralized water. The demineralized water is pumped into a 705 tons/hour 5 times 1320, that is almost 7 million people that are affected because of power boiler, where it is heated through a series of from Egbin. He said "When we put in the convoluted tubes, to attain a temperature of 541 degrees centigrade at a pressure of additional 1,700 MW, we will have over 12,500Kpa. At this temperature and 3,000 MW that puts 21 million people on pressure, the fluid is termed superheated electricity. Who does not deserve light? steam.

The superheated steam is sent into You deserve to get home, put on your TV, the steam turbines, which shares the same work on your laptop, entertain your family shaft with generator rotor. The steam sent and enjoy� into the turbine, causes the rotation of the www.egbin-power.com shaft.

Egbin Power owns and operates Six 220 megawatts (MW) Steam Turbines, one 24 megawatts (MW) Gas Turbine and one 1.5 The steam turbine is divided into three High Pressure turbine, Intermediate megawatts (MW) Diesel Generator. The Pressure turbine and Low pressure turbine. steam turbines are dual-fired (natural-gas The superheated steam leaves the boiler and high pour fuel oil).

and passes through the High pressure turbine, which has 8 stages (Blade and Nozzle). Upon leaving the High Pressure turbine (HP Turbine), it is resent into the boiler for further heating to gain more heat energy, before passing through the 6-stage Intermediate Pressure Turbine (IP Turbine).

The steam at this temperature and pressure, still possessing some energy, passes through a cross-over pipe into the 10-stage Low Pressure Turbine (LP Turbine) for further energy extraction.

SUCCESS STORY

EGBIN POWER PLC

Egbin to double plant capacity to 2670MW by Q4, 2020 Over the years, Egbin Power Plc has acquired a reputation as the symbol of indigenous expertise in the Nigerian Eectricity industry through its series of groundbreaking innovations. The company’s successful acquisition in 2013 by the partnership between New Electricity Distribution Company and the Korean Electric Power Corporation (NEDC/KEPCO) acquired Egbin Power plc, has inspired a new direction of excellence, world-class performance and best heath/safety/environmental standards for the company and a clear testament about the maturity of indigenous players in electricity sector and an overwhelming testimony about their capacity to execute and deliver best-inclass projects.

Egbin Power Plant,a thermal power station with an installed capacity of 1320 MW consisting of 6 Units of 220MW each a landmark decision was constructed near Lagos to shore up power supply in the nation. This would set the tone for the construction of Egbin Power Plant, one of the biggest power stations in Africa The partnership with KEPCO brings to Egbin decades of sustained excellent performance as KEPCO, the largest electricity utility company in Asia in terms of Transmission and Distribution, is amongst the largest nuclear power exporting companies and is also involved in every form of generation from wind, thermal, coal, solar, mass, hydro and renewable energy.

Recently, it has expressed interest in investing about $630 million in Tanzania energy sector,

and is considering putting up a natural gas-fired power plant in the East African country. This would be a huge boost to Tanzania’s power generation, and is the newest public-private partnership project expected to turn around the energy sector in the country.

The firm’s Chief Executive Officer, Mr Dallas Peavey, said the construction of the plant is expected to commence any time after the company, under Sahara Group, has inked the investment pact with the host government.

Egbin is resolute in its commitment to using continuing investment in new technologies and robust human capital to deliver world class services in power generation and supply in Nigeria, and ultimately, other parts of Africa.

Egbin is constantly involved in deploying technology and empowering its people to ensure it significantly reduces the environmental and public health impacts of its operations. The company continues to pursue investments and partnerships that will facilitate compliance widely acclaimed HSE standards.

This pursuit is a passion shared by every member of the Egbin family who are bound by the credo: Safety First, All the Time.

A safety-focused organization, on execution of its industry-defining projects, it maintains and adheres to the highest safety standards which guarantees the safety of its employees and other stakeholders. The company is also looking at renewable energy in Kenya, ethiopia and olther countries and plans on doing photovoltaic (PV)

solar in order to reduce internal usage in order to have more power to sell to the grid.

A photovoltaic system, also PV system or solar power system, is a power system designed to supply usable solar power by means of photovoltaics. It consists of an arrangement of several components, including solar panels to absorb and convert sunlight into electricity, a solar inverter to change the electric current from DC to AC, as well as mounting, cabling and other electrical accessories to set up a working system. Utility-scale solar photovoltaic technologies convert energy from sunlight directly into electricity, using large arrays of solar panels.

Solar photovoltaic technologies convert solar energy into useful energy forms by directly absorbing solar photons—particles of light that act as individual units of energy—and either converting part of the energy to electricity (as in a photovoltaic (PV) cell) or storing part of the energy in a chemical reaction (as in the conversion of water to hydrogen and oxygen).

Dallas Peavey has built a 667 MW PV power plant in California which is the largest in the world and he says the company is looking at doing 10-20MW PV solar which will be used to complement baseload.

Off-grid was where PV got its start – with so many applications for stand-alone power, and continual new developments and cost reductions in energy storage technology, this sector of the market is growing like never before.

COMPANY PROFILE

EGBIN POWER PLC

Egbin hits another milestone in Africa's power generation A photovoltaic system, also PV system or solar power system, is a power system designed to supply usable solar power by means of photovoltaics. It consists of an arrangement of several components, including solar panels to absorb and convert sunlight into electricity, a solar inverter to change the electric current from DC to AC, as well as mounting, cabling and other electrical accessories to set up a working system.

Over the years, Egbin Power Plc has acquired a reputation as the symbol of indigenous expertise in the Nigerian Eectricity industry through its series of groundbreaking innovations.

The company’s successful acquisition in 2013 by the partnership between New Electricity Distribution Company and the Korean Electric Power Corporation (NEDC/KEPCO) acquired Egbin Power plc, has inspired a new direction of excellence, world-class performance and best heath/safety/environmental standards for the company and a clear testament about the maturity of indigenous players in electricity sector and an overwhelming testimony about their capacity to execute and deliver best-in-class projects.

Egbin Power Plant,a thermal power station with an installed capacity of 1320 MW consisting of 6 Units of 220MW each a landmark decision was constructed near Lagos to shore up power supply in the nation. This would set the tone for the construction of Egbin Power Plant, one of the biggest power stations in Africa The partnership with KEPCO brings to Egbin decades of sustained excellent performance as KEPCO, the largest electricity utility company in Asia in terms of Transmission and Distribution, is amongst the largest nuclear power exporting companies and is also involved in every form of generation from wind, thermal, coal, solar, mass, hydro and renewable energy.

Recently, it has expressed interest in investing about $630 million in Tanzania energy sector, and is considering putting up a natural gas-fired power plant in the East African country.

This would be a huge boost to Tanzania’s power generation, and is the newest public-private partnership project expected to turn around the energy sector in the country.

Egbin is the only steam power station in Nigeria. Electricity is generated through steam

The firm’s Chief Executive Officer, Mr Dallas Peavey, said the construction of the plant is expected to commence any time after the company, under Sahara Group, has inked the investment pact with the host government. Egbin is resolute in its commitment to using continuing investment in new technologies and robust human capital to deliver world class services in power generation and supply in Nigeria, and ultimately, other parts of Africa.

Egbin is constantly involved in deploying technology and empowering its people to ensure it significantly reduces the environmental and public health impacts of its operations. The company continues to pursue investments and partnerships that will facilitate compliance widely acclaimed HSE standards. This pursuit is a passion shared by every member of the Egbin family who are bound by the credo: Safety First, All the Time.

A safety-focused organization, on execution of its industry-defining projects, it maintains and adheres to the highest safety standards which guarantees the safety of its employees and other stakeholders.

The company is also looking at renewable energy in Kenya, ethiopia and olther countries and plans on doing photovoltaic (PV) solar in order to reduce internal usage in order to have more power to sell to the grid.

Utility-scale solar photovoltaic technologies convert energy from sunlight directly into electricity, using large arrays of solar panels. Solar photovoltaic technologies convert solar energy into useful energy forms by directly absorbing solar photons—particles of light that act as individual units of energy—and either converting part of the energy to electricity (as in a photovoltaic (PV) cell) or storing part of the energy in a chemical reaction (as in the conversion of water to hydrogen and oxygen).

Dallas Peavey has built a 667 MW PV power plant in California which is the largest in the world and he says the company is looking at doing 10-20MW PV solar which will be used to complement baseload.

Off-grid was where PV got its start – with so many applications for stand-alone power, and continual new developments and cost reductions in energy storage technology, this sector of the market is growing like never before.

'Nigeria has the most promising opportunities, smartest and most educated people in the world. The business and economic development is driven by a stable power supply and that is the only thing we are lacking' - Dallas Peavey Dallas M. Peavey Jr is the Managing Director and Chief Executive er of Offic room, you will see we have just 2 units Egbin Power Plc, largest power generating station in Nigeria of theand largest one running simply because gas is not always in the West African sub-region with an installed capacityWofconsisting 1,320 M available and TCN’s technical issues. of 6 Units of 220MW each. In this exclusive interview with Ndubuisi Obineme They have a system that is older than our Micheal, Oil and Gas Republic's journalist during the media tour at Egbin Power plant. Tghey have never done any major Plant located in Ikorodu, Lagos State. Dallas takes us through the company's capital or manpower expenditure. They activities and success stories recorded since take over. have engineers that have almost all retired.

The people that they have don’t have the experience or educatyional level. But I will say that over the past few weeks, they have OGR: Please can you give us an We have a maintenance schedule that we brought in a lot of educated people. You overview of Egbin in the last 3 and a half can repeat every 3 to 5 years for the next 17 know the new MD of TCN is phenomenal. years? years. We have a power purchase You have heard people talking about the agreement (PPA) with the governmentfact that he is a banker. But where did he DALLAS: When we took over this facility NBET that is good for 20 years that began start his career? TCN. So, he knows 3 and half years ago, there was not more in October, 2013. So, we have 17 years left transmission and distribution inside out. than 200 MW. This project has 6 units of on that agreement that if we don’t perform, But he just started. It’s gonna take him 220 MW each with a combined capacity of we don’t get money. The sad thing is that years to improve the system that has been 1320 MW. When we bought the facility we are owed N106 billion. We have moribund for years. and all of the surrounding property, it was continued to spend money on only doing a little over 220 MW on 2 maintenance. You know, we brought in Everybody blames everything on gas but machines which means they could not 107 graduate engineers from local that is not it. You know yesterday we were reach 100 per cent of their capacity. So, universities and we have integrated them doing almost 500 MW easily because we since we took over, we have rehabilitated into Egbin and our affiliate companies --- had gas. We have been doing that since all the 6 units. We had one unit 6 that had Ikeja Electric and First Independent Friday. The reason is that they blame it on been down for 12 years. We rehabilitated it Energy. gas, vandalism but the fact is that it is not and now it works at 100 per cent of its all about gas. We have the gas and as soon capacity. If you went to the control room, When we took over, we had over 1,000 as we start getting gas, we will start you saw that it was running. Now to the employees but now about 400. What we bringing additional units. We don’t do recent past, we have spent more than $428 did was with the technological advances, politics. We just generate electricity for million rehabilitating the facility. during the overhaul--- mind you, we have Nigeria. That’s all. not eliminated any job. What we have done You know it costs us $778 million when we is bring in what is called Human Capacity Yesterday, we had almost 600 MW and purchased the facility. We have overhauled Investment. So that they understand, how within 30 minutes, it dropped to 500 MW 3 of the 6 units meaning the remaining 3 the plant operates and how to be efficient in without any explanation. And at the same have not been overhauled. When we came what we do and that we are not a time, the frequency and line voltage in for 35 years, none of them had ever been government company anymore. dropped way down which means TCN cant overhauled. That is almost impossible. get it through their system . when the We have reached 1,100 MW. I told you that frequency is high, it means they are not our capacity is 1, 320 MW. It came down to putting it in the right place. I think it’s lack In this case, for more than 35 years, no major work was done on the plant. We 1,100 MW because at that time, TCN could of investment of those years and lack of not take the power because of the issues in experienced business people—they are have overhauled from start to finish 3 which means that we are going to start this their systems which are frequent even government employees, if the power today. If you just came from the control geoes, it’s okay but if it doesn’t, they don’t year. care because they make the same amount of money.

INTERVIEW

You can call them at 2 o’clock in the morning, you will get no response because they don’t care. If I have an issue, I will call the MD and he will make calls and people will respond. If I have issues with gas, I will call MD , NGC and he makes calls and people respond but if I don’t get a response from them , I will call the VP’s office.

Anytime you call someone, you get a response.

We have 330KV lines and 132 KV lines so that we can evacuate our power efficiently.

What’s the biggest electricity user in Nigeria? Lagos, right? Lagos has 7 steel mills and each one can use power from 0MW in 60 seconds upto 39MW

Egbin Power Plc Media Tour

think because they have seen the success of Gencos. We have all the power that we can produce. I think that’s why they have the current MD in office. He is a businessman. He will put the procedures in place so that they don’t work as a government entity anymore but a private company because a private company works towards positive results.

OGR: What are some of the other challenges faced by Egbin power plant?

DALLAS: One of the issue asides Forex, TCN, gas and all of that is security. We have got the largest power plant not just by the size of the plant but by the surrounding megawatts we give them . They have not property. You know , we have 683 hectares done that. Even we just got paid for the that we purchase with the power plant. We But the way it is now, because of the lack of month of November, 2016, five months have 400 homes that have been built on our gas and issues with TCN, they are rejecting later and they only paid 18 per cent of what property and we are working at building the load, they are selling their gas to they owe. If you are owed N100 and you the second phase to double the capacity. somebody else—we cannot produce are paid N18, how can you live on that?

We are going to do that by Q4, 2020. In enough electricity to solve all of that about 3 years, we would have more than challenge being used in lagos.

OGR: What do you have to say about doubled the capacity. We have some the newly constituted NERC? individuals who have tried to come in to OGR: Last year, there was a report that sabotage our switchyard. They have come debt you are being owed is affecting DALLAS: What I would expect is for in and done all kinds of damage. your business, what’s the update and them to look into and evaluate what we how much do you owe? have done in the last 3 and half years. They OGR: Why do you think they are doing have a lot of work to do. I think they are that?

DALLAS: We are been owed N106 very intelligent people. Mr. President and billion. I owe the gas companies N40 his group selected these people because of DALLAS: I think because it was owed by billion. And we have other business like their expertise and because they know government before. But we have got to Korean Electrical Power how the system should be. They should protect the plant because this is the number Company(KEPCO), we owe them about work with the Gencos and Discos and one asset in all of Nigeria in terms of $35 million. So you can see just those two ensure we all follow the same rules and infrastructure. When we took over the alone and that does not include the service regulations. I think for my template, the facility, we had over 500 homes that took on our debt. We owe 14 different banks.

Minister has done an excellent job because over our estate. You know because we are you know, when he started, we had less isolated. Because we housed our In order to address, the liquidity challenge, than 3,000MW but we got to 5200MW employees here, we had to provide homes stakeholders have called for more within a short period because of gas and for them. We had 153 that were living in investment. What do you say? because TCN can’t keep up. But you see our homes who did not work for Egbin, now that we are almpost back to that.

TCN or the government. They had just We have already invested over $1.4 Because he has been trying to bring money taken over our homes. So, we had to go billion. The problem with that is we from government to try to support Gencos, there and remove them . we have had to expected at some point to start breaking Discos and inparticular support TCN. I take them to court, they took us to court--even and actually try to get a return on our think TCN has to step up their game and I we won every case but we have gotten 126 investment. When you buy a new car, you think they will but it’s justb going to take homes back that means we are still 27 to don’t buy because it is shiny, you buy time . on the fuel side, the government has go. They just refused to leave. People because in the next 2 or 3 years, it will get got to step in to pay us so we can pay the have built their homes right up to the plant. you where you need to go on time and gas people.

How can we expand the plant if you have dependable. With this plant, we have spent got people building on our property? almost 41.5 billion and from that we The issue of low transmission, obsolete expected to pay our gas bills . it’s hard to equipment has been said to be a major OGR: With this issue, is there any plan bring in additional investment if you cant cause of electricity supply issue in the to increase capacity? be guaranteed to be paid what you are country, do you think TCN should be owed. You habe NBET,FG about the privatised?

DALLAS: Of course. We are going to issues with the DISCOs. But our contract double capacity. You know, right now, it is says we sell power to NBET. We have no Yes, they should be privatized and I think 1320 MW. We have got plans to add 1700 concern with what happens at that end. It is even the government has said the answer to MW. We have started the process. By Q4, between the government and them. the that is yes. Because of capital investment 2020, that plant will be up and running. government guarantees to pay us for every over the years and lack of work plan and I

'Nigeria has the most promising opportunities, smartest and most educated people in the world. The business and economic development is driven by a stable power supply and that is the only thing we are lacking' - Dallas Peavey - Cont.

When you talk about investment, that alone is $1.7 billion. That is the kind of investment that our company is serious about bringing in. we have to that because nigeria needs the power. You know for every megawatt, 1100 homes are provided with light. How many people are in a home on the average in Nigeria?

About 4 to 5. Now you multiply that 1,100 times 5 times 1320, that is almost 7 million people that are affected because of power from Egbin. When we put in 1,700 MW, we will have over 3,000 MW that puts 21 million people on electricity. Who does not deserve light? You deserve to get home, put on your TV, work on your laptop, entertain your family and enjoy.

OGR: In 2015, you contributed about 5.4 million mw to the grid, what is the figure for 2016?

DALLAS: In 2016, for the first 3 months, Egbin Power Plc media tour, Oil and Gas Republic Journalist, we were doing 1100 MW per hour for 24 Micheal spotted putting on a black shirt. hours times those first 4 months. After that, the gas supply dropped tremendously for the next 6 months. We were doing less OGR: Since you took over, have there OGR: How do you mean? than 600 MW for the last three months. We been issues of explosion on the plant? have been doing less than 400 MW. That is DALLAS: It has nothing whatsoever to less than 30 per cent of what we were doing do with the current tariff plan. It has DALLAS: We have never had any major in 2015 just because of gas and TCN. nothing to do with addressing the arrears failure of any kind in the last 3 and half years that we took over. We have had that are owed to us. It is for guarantee They have to do their part. You can blame going forward for new plants. Those are almost 700 days without a loss. We are the the world for causing your problem, but called Greenfield Plants. It does not deal number one in Nigeria for the size of you have got to deal with your own with any arrears. It only has to do with new company. Safety is priority to us. We are problem too. number one for energy, safety, plants going forward. environment and efficiency by NERC. If you saw this plant 3 and half years ago, OGR: So, what are you doing as regards when we took over, we could not even use that?

OGR: As an expatriate, what’s your this building. You couldn’t walk at night relationship with your Nigerian staff? here because there was no light. DALLAS: We will continue to work with Everything was in a deplorable state. we the Minister. We have tried to work with DALLAS: You will have to ask them. were even shutting down the school (General laughter). I have been working 2 NERC,NBET and the VP’s office. He is simply because they were deplorable. We the guy that keeps everyone together. He is years in Nigeria. Without a doubt, Nigeria had to renovate the hospital that we have the best individual I have ever seen to keep is the most educated and what I will call because if we didn’t, you’d have to go all the nation running. grounded group in the world because you the way to Ikorodu. have the universities--- so many private schools.

OGR: Is there any sign you will be So for us, we had to recoup part of that listened to? investment, in order for us to continue to be I also think Nigerians are the most tolerant. in business. At this point, we are N110 What I mean is that , you have a school, a DALLAS: I hear it every day from the billion in the hole.

Minister, the Permanent Secretary, NERC mosque and a church beside one another. and even the TCN ,MD. He has only been We have never had an issue of religion or You hear the stories about the FG putting there 6 weeks and he has turned it around otherwise. I am a Christian but I don’t have up N701 billion, if you read the details, that 30 degree from what it was. The problem is issues with either. has nothing to do with the current tariff he only has 1 years contract. For him to do plan. it, he has to have more support and more money because he is trying to make up for what has been deplorable for 40 years.

'Nigeria has the most promising opportunities, smartest and most educated people in the world. The business and economic development is driven by a stable power supply and that is the only thing we are lacking' - Dallas Peavey - Cont.

OGR: Please can you give an update on the proposed $630 million investment on natural gas in Tanzania?

DALLAS: We have put up bids in the procuring process for the supply of electricity. It is essentially half of what we are going to build for this phase 2 facility.. we are also looking at renewable energy in Kenya, Ethiopia and other countries. We are also looking at doing photovoltaic (PV) solar so that we can reduce internal usage in order to have more power to sell to the grid.

OGR: Stakeholders have asked gencos to tap into the renewable energy to increase output, what are you doing as regards that?

DALLAS: What we are looking at here is doing 10-20MW PV solar. The problem with renewable energy—whether it is PV solar or wind, at best you have 35 to 40 per cent availability for the full capacity. We Egbin Power Plc media tour, Oil and Gas Republic Journalist, all know in the rainy season, how many Micheal spotted at the plant information board. hours of sunshine do you have? You have maybe a total of 4 to 6 hours and that is not OGR: What is your advice to other 100 per cent. If you look into my history, I the world and it is less than 30 per cent.

GENCOs? From the ongoing development, I think have built a 667 MW PV power plant in Nigeria has the most promising California, the largest in the world.

DALLAS: We should continue to work opportunities in the world because you together as a group so that we all come up Solar is not the answer. It is only used to have both Oil and Gas. You have the complement baseload. If you don’t have a smartest and most educated people in the with a viable means so that we all survive because if we can get through the liquidity world. solid, firm, quality base load which is issue. As chairman of the Association of thermal and hydro, the rest will not work . people talk about replacing--- there is no The business and economic development Gencos, that’s what I say in every meeting. country in the world that can do that . USA is driven by a stable power supply. That is the only thing we are lacking. is the largest percentage of renewable in

World Record: Egbin Sets New Milestone of 700 Days without a Loss Time Incident OGR: Please can you give an update on the proposed $630 million investment on natural gas in tanzania?

OGR: Please can you give an update on the proposed $630 million investment on natural gas in tanzania?

OGR: Please can you give an update on the proposed $630 million investment on natural gas in tanzania?

DALLAS: We have put up bids in the DALLAS: We have put up bids in the DALLAS: We have put up bids in the procuring process for the supply of procuring process for the supply of procuring process for the supply of electricity. It is essentially half of what we electricity. It is essentially half of what we electricity. It is essentially half of what we are going to build for this phase 2 facility.. are going to build for this phase 2 facility.. are going to build for this phase 2 facility.. we are also looking at renewable energy in we are also looking at renewable energy in we are also looking at renewable energy in Kenya, ethiopia and olther countries. We Kenya, ethiopia and olther countries. We Kenya, ethiopia and olther countries. We are alkso looking at doing photo voltaic are alkso looking at doing photo voltaic are alkso looking at doing photo voltaic (PV) solar so that we can reduce internal (PV) solar so that we can reduce internal (PV) solar so that we can reduce internal usage in order to have more power to sell to usage in order to have more power to sell to usage in order to have more power to sell to the grid. the grid. the grid.

KERL invests over $428 million rehabilitating Egbin Power Plant Egbin Power plc was handed over to KERL in November 2013 by the Bureau of Public Enterprises (“BPE”) as part of the Federal Government power sector privatization program.

Despite the wide-ranging challenges and increased operating costs, KERL has turned around the plant and operated the assets efficiently and satisfactorily, investing substantially in the plant since take over.

According to Dallas Peavey, Egbin CEO, "we have rehabilitated all the 6 units. We had one unit 6 that had been down for 12 years. We rehabilitated it and now it works at 100 per cent of its capacity. We have spent more than $428 million rehabilitating Egbin Power Plant" "It costs us $778 million when we purchased the facility. We have overhauled 3 of the 6 units meaning the remaining 3 have not been overhauled. When we came in for 35 years, none of them had ever been overhauled, he added”

KERL will be investing in a new power project “Egbin 2”. This is a proposed combined cycle power plant (Gas & Steam), with a capacity of 1350MW. The project is expected to be completed over a five-year period, which will increase the total generation capacity to 2,670MW. KERL’s understanding of the need to build a sustainable organization prompted the decision to sign an “Operation and Maintenance” agreement, with Korea Electric Power Company (KEPCO) a world class electric power operator in Korea, as a technical partner. This partnership brought with it the needed rebranding of the organization which focused not only on the technical aspects of the organization – such as plant upgrades and rehabilitation, but also employee’s welfare through improved working environments and standard of living. With combined efforts of all its internal stakeholders, Egbin power plant presently operates at an increased efficiency of 32%,

exceeding the target of 28% for 2014. Egbin power plant is a dual fired power plant, with the option of generating power through the use of Natural Gas or High Pour Fuel Oil. In ensuring its commitment to a sustainable environment through reduction of greenhouse and smog gas emissions, the power plant operates mainly on Natural gas, thereby minimizing the use of High Pour Fuel Oil (HPFO) in the generation process. In order to manage future natural gas availability and ensure the minimal use of HPFO, thereby avoiding any crisis relating to power generation in the country, Egbin has signed several forward gas contracts, to ensure gas supply to the power plant for optimum electricity generation for the country.

Over 400 Nigerian Engineers Fully Employed at Egbin Power Plc developed several training programs to managerial competencies, computer proficiency and new technical knowledge trainings. These learning and development initiatives were facilitated locally, regionally and internationally.

The organization understands the need to identify, recognize, reward and keep motivating outstanding performance of staff members, and as such it has initiated programs that will identify According to Egbin CEO, "About 400 Nigerian engineers are fully employed in the and develop high potential staff. In addition, company and working in the power plant. We some quick wins have been implemented e.g.

Employee of the Month initiative to keep every brought in what is called Human Capacity staff member motivated and outstanding. Egbin Investment by offering an intensive training to the engineers so that they understand, how Power Plc is focused on capacity and capability development and has the plant operates and how to be efficient in what we do and that we are not a government company anymore” Egbin has introduced a new performance management framework in order to promote a performance-driven culture within the organization. The performance cycle consists of the goal setting exercise, a mid-year review and the end of year performance review.

Efforts were made to eliminate complexities and ensure better compliance through HR Representatives, departmental meetings, email communication and circulation of quick references and relevant FAQs. Egbin has taken the responsibility of ensuring adequate learning and development which covered areas such as soft skills and

upskill staff. Training programs were largely focused on the acquisition of basic skills required to perform work. This covered soft skills training (work productivity and management training) and Computer proficiency (focus on use of MS Office suite) in addition to the Technical training conducted in collaboration with Technical partners – KEPCO which covered classroom workshops and site visitation to KEPCO Training Institute in South Korea. Egbin has also introduced a core functional trainings based on identified skills gap of staff in addition to aggressive “hands-on” knowledge transfer programs coaching, mentoring, etc...

Photo Gallery

Snapshot of Oil and Gas Republic Journalists at Egbin Power Plc Media Tour March 2017

EGBIN CEO AND OIL AND GAS REPUBLIC JOURNALISTS

www.oilandgasrepublic.com

Photo Gallery

Snapshot of Oil and Gas Republic Media Tour at Egbin Power Plant

EGBIN CEO AND OIL AND GAS REPUBLIC JOURNALISTS

www.oilandgasrepublic.com

SUCCESS STORIES

EGBIN POWER PLC

Egbin Power expands its Investment Portfolio to the East African region A safety-focused organization,

on execution of its industry-defining projects, it maintains and adheres to the highest safety standards which guarantees the safety of its employees and other stakeholders. Egbin is also looking at renewable energy in Kenya, Ethiopia and other countries and plans on doing photovoltaic (PV) solar in order to reduce internal usage in order to have more power to sell to the grid.

A photovoltaic system, also PV system or solar power system, is a power system designed to supply usable solar power by means of photovoltaic. It consists of an arrangement of several components, including solar panels to absorb and convert sunlight into electricity, a solar inverter to change the electric current from DC to AC, as well as mounting, cabling and other electrical accessories to set up a working system. Utility-scale solar and is considering putting up a natural gas- photovoltaic technologies convert energy from sunlight directly into electricity, fired power plant in the East African using large arrays of solar panels. country. This would be a huge boost to Tanzania’s power generation, and is the Solar photovoltaic technologies convert newest public-private partnership project solar energy into useful energy forms by expected to turn around the energy sector directly absorbing solar in the country. photons—particles of light that act as individual units of energy—and either The firm’s Chief Executive Officer, Mr Dallas Peavey, said the construction of the converting part of the energy to electricity (as in a photovoltaic (PV) cell) or storing plant is expected to commence any time part of the energy in a chemical reaction (as after the company, under Sahara Group, has inked the investment pact with the host in the conversion of water to hydrogen and oxygen). government.

Egbin Power is investing in a Combined Cycle Power Generating asset in Africa Over the years, Egbin Power Plc has acquired a reputation as the symbol of indigenous expertise in the Nigerian Eectricity industry through its series of groundbreaking innovations. The company’s successful acquisition in 2013 by the partnership between New Electricity Distribution Company and the Korean Electric Power Corporation (NEDC/KEPCO) acquired Egbin Power plc, has inspired a new direction of excellence, world-class performance and best heath/safety/environmental standards for the company and a clear testament about the maturity of indigenous players in electricity sector and an overwhelming testimony about their capacity to execute and deliver best-inclass projects.

Egbin Power Plant,a thermal power station with an installed capacity of 1320 MW consisting of 6 Units of 220MW each a landmark decision was constructed near Lagos to shore up power supply in the nation. This would set the tone for the construction of Egbin Power Plant, one of the biggest power stations in Africa. The partnership with KEPCO brings to Egbin decades of sustained excellent performance as KEPCO, the largest electricity utility company in Asia in terms of Transmission and Distribution, is amongst the largest nuclear power exporting companies and is also involved in every form of generation from wind, thermal, coal, solar, mass, hydro and renewable energy.

Recently, it has expressed interest in investing about $630 million in Tanzania energy sector,

Egbin is resolute in its commitment to using continuing investment in new technologies and robust human capital to deliver world class services in power generation and supply in Nigeria, and ultimately, other parts of Africa.

Egbin is constantly involved in deploying technology and empowering its people to ensure it significantly reduces the environmental and public health impacts of its operations. The company continues to pursue investments and partnerships that will facilitate compliance widely acclaimed HSE standards. This pursuit is a passion shared by every member of the Egbin family who are bound by the credo: Safety First, All the Time.

Dallas Peavey has built a 667 MW PV power plant in California which is the largest in the world and he said "Egbin Power is looking at doing 10-20MW PV solar which will be used to complement baseload”

MARITIME INDUSTRY

Damen Pioneers Shipbuilding and Vessel Supply for the Maritime Industry in Africa

By Obineme Ndubuisi Micheal shallow-draft passenger ferries for the Ivory Coast. The contract represents part of a forward-thinking presidential plan that strives to reduce urban congestion and greenhouse gas emissions in the city Abidjan. Construction of all the ferries will take place at Damen Shipyards Kozle in Poland as the yard adheres to a tightly-planned production schedule to meet STL’s delivery requirements. The first four ferries was delivered in January 2017 and the rest will be delivered four at a time, every 8 weeks, in three batches.

Damen is an international shipyard group, operating 33 shipbuilding and repair yards with 9,000 employees worldwide. The company has delivered over 6,000 vessels in more than 100 countries and delivers some 180 vessels annually to clients worldwide. Damen operate in every market where there is an opportunity to improve, innovate and invest. The group listen carefully to their clients needs and invest a great deal in innovation, research and development.

As part of the company's success stories, Damen has been pioneering shipbuilding and vessel supply for clients in Africa starting from Nigeria, South Africa, Ivory Coast and much more...

In 2016, C&I Leasing Plc, a leading player in the Nigerian offshore support vessel market, has taken delivery of four Damen SPa 1605 ballistic protected security patrol vessels. The patrol boats is used to provide security patrol and escort services for LNG tankers calling in and out of the Nigerian LNG Bonny terminal.

Based on its unique, standardized shipdesign concept Damen is able to guarantee consistent quality. The company also focus on standardization, Damen Shipyards Group signed a modular construction and keeping contract with Société de Transport vessels in stock leads to short delivery Lagunaire (STL) to build sixteen times, low ‘total cost of ownership’, high resale values and reliable performance.

More interesting, Damen vessels are based on thorough Research and Development (R&D) and proven technology, offering a wide range of products, including tugs, workboats, naval and patrol vessels, high speed craft, cargo vessels, dredgers, vessels for the offshore industry, ferries, pontoons and superyachts. For nearly all vessel types Damen offers a broad range of services, including maintenance, spare parts delivery, training and the transfer of (shipbuilding) know-how. Damen also offers a variety of marine components, such as nozzles, rudders, anchors, anchor chains and steel works.

Just over a year after it took delivery of the second of two FCS 3307 Patrol vessels, Homeland Integrated Offshore Services Limited (Homeland) of Nigeria has ordered one more of the same class with an option on a second, to be named Guardian 3 and Guardian 4. The two vessels are being supplied as a turnkey solution. The Damen Group is taking care of delivery and crew training, as well as the design and build. Damen’s Local Service Hub in Port Harcourt, Nigeria, ensures that maintenance, repairs and any additional support is handled by Damen engineers.

In addition to ship design and shipbuilding, Damen Shiprepair & Conversion has a worldwide network of 16 repair and conversion yards with dry docks ranging up to 420 x 80 metres.

Conversion projects range from adapting vessels to today’s requirements and regulations to the complete conversion of large offshore structures. DSC completes around 1,500 repair and maintenance jobs annually.

MIDDLE EAST REPORT

Middle East Power Sector Set for Growth in Nuclear and Renewable Energy Investment According to news report, Masdar, Abu Dhabi’s renewable energy company, has signed a Cooperation Agreement at Abu Dhabi Sustainability Week with Qatar Electricity & Water Company (QEWC) and Nebras Power to develop renewable and sustainable energy projects. The agreement will strengthen mutual cooperation between Masdar, QEWC and Nebras in the development of commercially viable renewable energy projects in the UAE, Qatar, and international markets. It will also promote collaboration on research & development, education and raising awareness of the importance of sustainable development.

UAE Nuclear Power Plant Photo Credit: venturesonsite

such as the Smart Dubai initiative driving growth in this area. In terms of energy, this is crucial to improving efficiency and continuing to meet the city’s power needs.

Dubai Municipality are also in the process of rolling out the ‘Smart Palm’ project, consisting of recharge stations and info points with complimentary Wi-Fi, across Informa Exhibitions positions Middle East Dubai. Dubai’s Smart City strategy plans to transform a thousand government Power Sector and Opportunities in the services into smart services. The project Spotlight through organizing the region’s aims to encourage collaboration between largest Power and Solar gathering, the public and private sectors to achieve featuring over 50,000 attendees targets in six particular focus areas: Smart worldwide. Informa is the organiser of Life, Smart Transportation, Smart Society, Middle East Electricity Exhibitions and Smart Economy, Smart Governance and Conferences as the event creates series of features and interactive sessions duirng the Smart Environment. The strategy will rely on three basic principles – communication, event and it also creates ways to better integration and cooperation. manage Middle East Power Sector, making disparate electricity systems inter The UAE is encouraging the use of electric operable, installing energy management systems strategically throughout a city and cars and building the necessary infrastructure to support them. A number investing in smart meters and grids, and of initiatives including the development of then assuring an operational plan exists, ‘smart electrical grids’ to encourage improving the energy products used by owners of houses and buildings in Dubai to cities, how to make cities 100 per cent use solar energy and sell the surplus to the renewable and much more. government through the network itself, as well as “smart meters” that contribute to Alongside Dubai Municipality and the economizing the consumption of Environmental Centre for Arab Towns, electricity and water are being developed. who are Strategic Partners for the event, The Dubai Plan 2021 which plans to the organisers created a series of new develop Dubai into a “smart, integrated features, conferences and activations all focusing on the future of Smart Cities,and and connected city” has a strong focus on energy sustainability and using renewable the innovations which are set to lead the way both locally and internationally in the energy sources. Integration of Smart Cities plans with GCC housing projects will lead coming decade. Developing Smart Cities to the economizing of energy use at large. is a key focus of the Middle East energy industry, with key government projects Following the successful event, Middle East Electricity & Solar 2017, an essential event in the MEA power community’s calendar. The Middle East Power Sector is set for growth as the region has huge interest and potentials in Nuclear, Renewable Energy investment.

Masdar, has also acquired a stake in Hywind Scotland, a 30-megawatt (MW) floating offshore pilot wind farm in the North Sea. In the transaction Statoil and Masdar have agreed to share the development risk and Masdar will cover 25% of previous and future costs. Due to start commercial operation in late 2017, Hywind Scotland is the world’s first floating offshore wind farm. The objective of the Hywind pilot farm is to demonstrate cost efficient and low risk solutions for future commercial-scale floating wind farms.

To further showcase the recent projects execution in the region, the Construction of the 800 megawatt (MW) phase 3 of the Mohammed bin Rashid Al Maktoum Solar Park in Dubai has commenced since 2017.

A Masdar-led consortium was selected last June by Dubai Electricity and Water Authority (DEWA) to develop what will be the world’s largest solar park on a single plot on completion, after setting a recordlow bid price for solar power generation of US2.99 cents per kilowatt-hour (kWh).

Construction of the 16 square-kilometre Phase 3 expansion of the Dubai Solar Park will occur in three stages. The first 200MW stage is expected to be completed by the first half of 2018 and the next 300MW phase is due the following year, with the final 300MW tranche to come on stream in the first half of 2020.

The Mohammed Bin Rashid Al Maktoum Solar Park is expected to displace an estimated 6.5 million tonnes of carbon dioxide per annum on completion in 2030.

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