President Muhammadu Buhari’s administration will come to an end on May 29th, 2023, leaving behind a mixed record of achievements and challenges.
One of the notable legacies of the administration is the initiation and development of several energy projects in the country. As the Buhari administration prepares to step down, there are concerns that some of these projects run the risk of being left unfinished.
In this article, we will examine six significant energy projects worth billions of dollars that the Buhari administration has initiated and their current status.
Oloibiri Oil Museum and Research Center (Ongoing): On February 8, the Federal Executive Council approved the construction of the N117 billion Oloibiri Oil Museum and Research Center. The centre is being promoted by the Nigerian Content Development and Monitoring Board (NCDMB), the Petroleum Technology Development Fund (PTDF), Shell Petroleum and Development Company (SPDC), and the Bayelsa State Government.
- The museum will store historic data, equipment, and tools used in Nigeria’s oil and gas industry for posterity, and a functional research centre where prototypes can be tested and validated. Julius Berger has been awarded the contract to execute the project.
- James Akwaji, a production engineer, expressed concern that the Oloibiri Oil Museum and Research Center project may not be completed before President Buhari leaves office in May 2023. He fears that the next administration may abandon the project, and the funds allocated for it may not be utilized for that purpose since the administration that initiated the project would have left office.
Siemens Power Deal (Ongoing): The $2.3 billion Siemens Power Deal, a bilateral agreement between the Nigerian and German governments, was initiated in 2018 under the Presidential Power Initiative (PPI) to double Nigeria’s installed power generation and distribution capacity.
An Implementation agreement was signed on July 19, 2019, between the Federal Government of Nigeria and Siemens. The PPI is structured into three phases: quick fixes in the transmission and distribution grid network to increase operational capacity from 5GW to 7GW, further upgrades to increase capacity from 7GW to 11GW, and upgrading the grid from 11GW to 25GW, including building power generation plants.
Despite facing some delays, the project remains ongoing. Peter Obi of the Labour Party has pledged to complete the project if he is elected as the next president. During a presentation at Chatham House, a UK-based policy institute, he said:
- “We will immediately complete the $2.3 billion Nigeria-Siemens network improvement deal to achieve 7,000 MW stable capacity by the end of 2023, 11,000 megawatts by 2024, and 25,000 megawatts by 2025.”
- The CEO of Habitat Group, Olokunbola Gboyega, supports the Siemens project in Nigeria, believing it will contribute to the country’s growth by adding 7,000 MW to the national grid. He suggests that Nigeria needs around 100,000 MW for its development and recommends that the next president should focus on developing more hydropower projects to address the power sector’s capacity issues.
- However, the project has failed to live up to expectations since the death of the former chief of staff to the president, Abba Kyari in 2020. While it remains a major initiative of the current president, likely, it may not ever materialize. The Nigerian Electricity Sector continues to face a major funding shortfall caused by perennial deficiencies in the market structure.
Kolmani Integrated Development Project (Ongoing): The $3 billion Kolmani Integrated Development Project (KIPRO) was inaugurated by President Buhari in November 2022. KIPRO is located at the boundary of Bauchi and Gombe states and encompasses oil prospecting licenses (OPLs) 809 and 810 in the Kolmani field in the Gongola Basin of the Upper Benue Trough.
The initial phase of the project includes an In-Situ oil refinery with a capacity of up to 120,000 barrels per day, a gas processing plant of up to 500 million standard cubic feet per day, a power plant with a capacity of up to 300 MW, and a fertilizer plant with a daily output of 2,500 tons.
- Oil and gas analyst, Dan D. Kunle, noted that the success of the Kolmani drilling campaign and the development of Nigeria’s oil and gas resources will depend on several factors, including government policies, investment, and environmental regulations.
- However, it will be up to the incoming administration to make the necessary decisions and take the appropriate steps to ensure the sustainable and responsible development of these resources.
- It is important to consider the environmental impact of the drilling and extraction process.
- The government must ensure that proper environmental regulations are in place to prevent any negative impact on the surrounding areas and local communities. Another factor to consider is the potential for job creation and economic development. The successful exploration and extraction of oil and gas resources can lead to job creation and revenue generation, which can have a positive impact on the overall economy.
Nigeria-Morocco Gas Pipeline (Ongoing): The Nigeria-Morocco Gas Pipeline is a 5,600 km gas pipeline that will traverse 13 African countries – Nigeria, Benin, Togo, Ghana, Côte d’Ivoire, Liberia, Sierra Leone, Guinea, Guinea-Bissau, Gambia, Senegal, Mauritania, and Morocco. The pipeline’s development is expected to span several government administrations and is planned to feature 13 compressor stations. Of the 13 countries through which the pipeline will pass, only seven have so far been included in the Memorandum of Understanding, namely Nigeria, Morocco, Ghana, The Gambia, Guinea, Guinea-Bissau, and Sierra Leone.
Oil and gas analyst, Etulan Adu, noted that the Nigeria-Morocco gas pipeline may not be a priority for any new government coming in due to the country’s current debt profile. Adu suggests that it would be better to focus on floating liquefied natural gas (FLNGs) which require less time to build and commission, as opposed to the pipeline which would solely rely on more financing from foreign investors. Additionally, Europe may not be interested in investing more in the pipeline project due to geopolitical concerns.
Kano Solar Power Plant (Completed): In January 2023, President Buhari commissioned Nigeria’s first-ever grid-connected solar power plant, a 10-megawatt (MW) facility in Kano State. The Kumbotso Solar Plant, developed by the Nigeria Sovereign Investment Authority (NSIA) and Haske Solar, was tendered in 2020 and is being implemented by Haske Solar Company, a special-purpose vehicle established by the NSIA. Haske Solar is 80% owned by the Federal Government of Nigeria, 15% by Kano State, and 5% by the Kumbotso Local Government Area.
The plant is expected to provide a much-needed boost to industries in the state that rely on electricity to power their operations. The next administration will only need to monitor its progress through the project developer, NSIA, as it provides power to industrial hubs in Kano state.
AKK Gas Pipeline (Ongoing): The $2.8 billion Ajaokuta-Kaduna-Kano natural gas pipeline is being developed by the Nigerian National Petroleum Corporation (NNPC) and will transport natural gas from southern Nigeria to central Nigeria along a 614 km route. This pipeline project represents the first phase of the 1,300 km-long Trans-Nigerian Gas Pipeline (TNGP) project, which is part of Nigeria’s Gas Master Plan to utilize the country’s surplus gas resources for power generation and consumption by domestic customers.
The pipeline is being developed on a build-own-operate-transfer (BOOT) basis under a public-private partnership (PPP) and is being supervised by Nigeria’s Infrastructure Concession Regulatory Commission (ICRC). The strategic importance of the AKK gas pipeline project became more pronounced in the second quarter of 2022, as reported by Nairametrics, as Europe, the largest buyer of Russian energy, weighed the likelihood of gas-supply disruptions amid the ongoing war with Ukraine.
- Oil and gas analyst, Kayode Oluwadare, noted that given the significance of the project, it is essential that it transcends administrations and is completed as soon as possible. However, this will require a concerted effort from both the government and other stakeholders involved in the project.
- He said that it is important to ensure that the necessary funding is available, that the project is executed efficiently and effectively, and that there is adequate security in the regions where the pipeline will pass through. Oluwadare notes that natural gas is a cleaner alternative to coal and other fossil fuels, and its utilization can help to reduce greenhouse gas emissions and mitigate climate change. Therefore, completing the project will not only benefit Nigeria’s economy but also contribute to the global efforts to address climate change.
- The Buhari administration initiated several energy projects that are ongoing and worth billions of dollars. As the administration ends, some of these projects run the risk of being left unfinished, which could have negative consequences for the country’s energy sector and the overall economy.
The incoming administration needs to prioritize the completion of these projects, as they have the potential to create jobs, boost economic development, and improve energy access for Nigerians.
Additionally, the government must ensure that proper environmental regulations are in place to prevent any negative impact on the surrounding areas and local communities. Finally, the successful completion of these projects will require a concerted effort from both the government and other stakeholders involved in the projects.