investment opportunities in nws

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By:

H.E. Ambassador (Dr) G.B. Igali, OONPermanent Secretary Minister of Water Resources

FEDERAL MINISTRY OF WATERFEDERAL MINISTRY OF WATER


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Presentation Outline

1) Background

2) The Strategic Positioning of the Ministry

3) Dams and Electricity in Nigeria

4) Nigeria Water Resources

5) Status of Hydro-power Dams6) Dams Statistics

7) Investments In The Hydro-Power Sector

8) Challenges to Infrastructure Development

9) Private Sector Participation through Public PrivatePartnership (PPP)

10) Benefit of Private Sector Partnership

11) Conclusion

FEDERAL MINISTRY OF WATERFEDERAL MINISTRY OF WATERRESOURCESRESOURCES


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1. Background

y By the Decree No 101 of 23rd August 1993 (which was converted toAct of Parliament during the present democratic process in 1999)the right to the control and use of all surface and groundwater

resources and of all water in any water course affecting morethan one state, together with the bed and banks thereof, arevested in the Government of the Federation.

Fed Ministry of Water Resources 3


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Background Cont.y The rights to take and use such water for personal development

and commercial purposes may be provided to any person orpublic authority in accordance with the regulations madepursuant therefore.

y These rights are vested on the Minister of Water Resources whois to provide licence to the eligible persons or bodies.

y The development of hydraulic structures within river catchmentareas for multipurpose use is crucial to the development of thenation and this has been the main focus of this Ministry.

Fed Ministry of Water Resources 4FE

DERAL MINISTRY OF WATERFEDERAL MINISTRY OF WATER


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Background Cont.y As a matter of policy, the Federal Ministry of Water Resources

intends to install hydropower facility to all dams that possess thepotential to generate some electricity.

y All new dams to be constructed for multipurpose use will have ahydropower component.

y In coal rich areas of Nigeria (Enugu, Kogi, Benue, Nassarawaetc), it is also the intention of the Ministry to construct dams toprovide the water which is required in the process of generation

of electricity.

y This is due to the fact that water is one of the most importantcomponents of the Thermal power generation through coal.

5FEDERAL MINISTRY OF WATERFEDERAL MINISTRY OF WATER


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2. The Strategic Positioning of the Ministry

Control of Water Resourcesy In accordance with the provisions of the Decree (Act) the

Honourable Minister shall have power to:

y a) Define the places from which or the manner in which and the

times at which such water may be taken or used;y b) Fix in times of actual or anticipated shortage of water, the

amount which may be taken by any person for such purpose;

y Prohibit temporarily or permanent the taking or use of water

from any source for such purpose, when in his/her opinion, thetaking or use of such water would be hazardous to health;

6



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Control of Water Resources Contd.

y Prohibit temporarily or permanent the taking or use of waterfrom any source for such purpose, when in his/her opinion, thetaking or use of such water would be hazardous to health;

y Revoke a right to use or take water when such a right is likely to

override the public interest; etc.y The development (construction) of hydraulic structures is fully

captured in the Decree (Act), and such development must be inaccordance with the guidelines and regulations provided for theimplementation of the provisions of the Decree (Act).



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Policy Objectives

FEDERAL MINISTRY OF WATER RESOURCESFEDERAL MINISTRY OF WATER RESOURCES8

y The Policy Objectives in the current national water policy as itrelates to Dams and Reservoirs is therefore:

y To ensure proper harnessing and utilisation of the vast waterresources of the nation

y To de-emphasise building large dams because of high cost ofdownstream infrastructural facilities as well as highenvironmental consequences

y To ensure that water impounded behind dams is fully utilised forits intended purposes

yTo emphasise the building of small and medium dams inlocations where feasible because of low capital costs, easy tomaintain and cheaper to manage compared to large dams



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3. Dams and Electricity in Nigeria

y Prior to the promulgation of the Decree or enactment of this Act,Dam construction was conceived primarily for the provision ofelectricity which was vital to national development at the time.

y The Government then undertook these projects through

Electricity Corporation of Nigeria (E.C.N) which had someElectrical Engineers, Geologists, Hydrologists and MechanicalEngineers that worked in collaboration with foreign companiesto construct the dams.

y With the creation of the Federal Ministry of Water Resources in

the mid 1970s and the enactment of the appropriate Act, theMinistry is equipped with the relevant dam experts to superviseand manage the construction of dams for all purposes.



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Dams and Electricity in Nigeria cont.

Fed Ministry of Water Resources 10FEDERAL MINISTRY OF WATERFEDERAL MINISTRY OF WATER

y The Federal Ministry of Water Resources, by the Act ofParliament is statutory responsible for the control, developmentand use of all surface and groundwater resources and of all waterin any water course affecting more than one state, together with

the bed and banks thereof.y The development of hydraulic structures within river catchment

areas for multipurpose use is crucial to the development of thenation and this has been the main focus of this Ministry.

y In line with the present Government drive to produce enough

power for industrial development and economic stability of thenation, the Ministry is reorienting its programme in thisdirection.


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Dams and Electricity in Nigeria cont.

y Hydroelectric power plays a major role in shaping thesocioeconomic and political life of the world.

y Substantial clean and renewable energy comes from this source.The development of this vital sector in Nigeria and indeed mostparts of Africa has so far been unsatisfactory resulting incrippling power outages affecting production and economic lifeas a whole.



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4. Nigerian Water Resourcey Nigeria has abundant renewable energy sources and water

resources in the form of rivers, lakes and oceans. The land is welldrained by perennial rivers.The water resources and potential isestimated about 267.3 billion cubic meters of surface water about92.0 billion cubic meters of ground water per annum.



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Surface and Ground Water

The water resourcesand its potentialestimates stand at:

267.3 billion cubicmeters of surface

water

92.0 billion cubicmeters of ground

water per annum.

13

0

50

10 0

15 0

20 0

25 0

30 0

Surface Water Ground Water

267 Billion

Cubic Meters

92 Billion Cubic

Meters

Water Resources Potential



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Surface and Ground Water Cont.

y However, these resources have remained largely unexploited andmanaged in an uncoordinated and integrated manner. Thereforethe power supply needs of the country are difficult to achieve.

y It is envisaged that when the water resources potential whichhave remained largely unexploited are harnessed in acoordinated and integrated way, they could satisfy allagricultural and other water demand including a significantcontribution to power supply of the country.



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Vast Untapped Water Resource

y T

he major rivers in Nigeria and their tributaries provide a vasthydropower potential for country. This is estimated to beequivalent to about 50,000MW, but the technically exploitedpotential is estimated at 35,000MW.

y The hydro potential is mostly limited by the intermittent nature

of Nigerian river flows, which have high water discharges duringthe rainy season and very low discharge in the dry season.

y To regulate the flow, dams are constructed across some of theserivers for irrigation, water supply and hydropower purposes.Dam development received tremendous encouragement in the

1970s, with increased revenue from petroleum.y Many of our dams have varied capacities for hydropower

generation totalling about 3,860MW and are currently under-utilized.



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5. Status of Hydro-Power Dams

y This country is well blessed with water everywhere. At present,there are over 200 existing dams. From which 20 have beendeveloped for hydro-electric capabilities.

yThe potentials of this country in the development of new damswould be encouraged particularly under PPP arrangements andwith total government support.

y This is history in the making and there is no going back. Thefocus will be on maintaining these dams effectively for the

purpose of generating electricity, for the purpose of providingirrigation and for the purpose of f lood control.



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Existing Dams Hydro-power Capacity


0

5

10

15

20

25

30

35

20MW

0.15MW

1MW

34MW

0.125MW

30MW

0MW

6 MW 6 MW

3 MW 3 MW

2MW

0 MW 0 MW

9M W

3MW

6MW

3M W

22MW

0MW

Present ro-Electric bilityof s in


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Dam Hydro-power Optimization

18

S/N Name of Project

State

Location

Dam

Completion

Level %

Current

Capacity

Mega Watts

Possible

Capacity WithImproved

Turbine

Technology

(MW)

Amount

Required Forinstalling Dam

Hydro-power

Components

(Mill ion Naira)

Amount Requiredfor Installing

Improved Turbine

Technology in Dams

(Mill ion Naira)

1 Gurara Dam KADUNA 100 30 30 0 0

2 Oyan Dam OGUN 100 9 13.5 1026 1539 6

3 Ikere Gorge Dam OYO 100 6 9 684 1026 6

4 Bakolori Dam SOKOTO 100 3 4.5 342 513 12

5 Dadin Kowa Dam GOMBE 100 34 51 3876 5814 18

6 Tiga Dam KANO 100 6 9 684 1026 12

7 Kiri Dam ADAMAWA 100 20 20 2280 2280 18

8 Jibiya Dam KATSINA 100 3 4.5 342 513 18

9 Challawa Gorge Dam KANO 100 6 9 684 1026 12

10 Owena Dam ONDO 100 3 4.5 342 513 18

11 Doma Dam NASARAWA 100 0 0 0 0 18

12 Waya Dam BAUCHI 100 0.15 0.225 17.1 25.65 3

13 Mbowo Dam IMO 98 0.125 0.19 14.25 21.66 314 Zobe Dam KATSINA 100 3 4.5 342 513 12

15 Kampe Dam KOGI 100 2 3 228 342 12

16 Kashimbilla Dam TARABA ONGOING 22 40 0 0 30

17 Ogwashiku Dam DELTA 25 1 1.5 152 171 24

18 Tot

l

i

A ount

for Dam Optimi ation in Million Naira 15,323



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Planned Hydro-Power Targets


7

Prese nt Ca a ity Ca a ity he n

Da s are Improved

Capa ity when

more dams are

bu ilt

8 ! "

,8 #

7, #

Dams El ri i Capabili in MW


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6. Dam Statistics



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21

9 MW


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24

6MW


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25

(34MW)

,


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26

(30MW),


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27


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28

(150 KW) Power Plant


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29

(3MW),


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30

(12MW),


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31

(6MW),


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32

(3MW),


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33

(3MW),


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34

K

KAMPE--

(2MW),


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35


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36

(2600MW) Power Plant


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Some Proposed Hydro-Power Schemes


Id e e d F re m s w h H yd ro -P ow e r p c yName of Dams River Situated on Capacity MW

Makurdi Dam Benue 1010

Onitsha Dam Niger 750

Ikom Dam Cross 730

Yola Dam Benue 360

Beji Dam Taraba 240

Donka Dam Niger 225

Lokoja Dam Niger 200

Afikpo Dam Cross 180

Garin Dali Dam Cross 180

Gembu Dam Donga 130

Karamti Dam Kam 115

Sarkin Danko Dam Sunti 45

Gudi Dam Made 40

Koroubo Dam Gongola 35Richai Dam Mosari 35

Dadin Kowa Dam Gongola 34

Gwaram Dam Jamaare 30

Ifon Dam Osse 30

Okpara Dam Oji 30

Total Capacity 4399



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38

0

200

400

600

800

1000

1200

Some Identified Future DamsInstalled Capacity MW



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7. nvestments n The Hydro-Power

Sectory Government has been the key provider of funds for the

development of infrastructure within the sector. However, thegovernment cannot do it alone and so require the active

participation of the private sector in the development of thesector.

Privatization of Electric Power Sector

y The privatization of energy has been part and parcel of a recentworld trend, which places greater reliance on market forces andless dependence on government in the allocation of resources.

Fed Ministry of Water Resources 39FEDERAL MINISTRY OF WATERFEDERAL MINISTRY OF WATER


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Investments In The Hydro-Power

Sector Cont.

y The ongoing holistic reform of the electricity industry isexpected to bring about improvement and reliability in servicedelivery.

y The Federal Government has set targets for holistic generationcapacity of 10,000MW in 2010 and 20,000MW in 2015.

y Heavy capital investment required to meet this need has beenestimated at over $15 billion.



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8. Challenges to Infrastructure

Development

y A major challenge to the actualization of the various potentialsof the hydro-power sector is funding and the enormous capitalrequired cannot be provided by the Federal Government alone.

y Population growth

y Economic growth

y Insufficient and poorly planned public sector infrastructure

y Ageing and deteriorating infrastructure

y Poor maintenance culture and lack of expertisey Increased infrastructural development cost



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9. Private Sector Participation through

Pu lic Private Partnership (PPP)y It is however, a known fact that the Federal Government cannot

single-handedly fund the sector. In view of this, the presentreform is expected to usher in private investment thus reducing

governments funding and control of the sector.y Some of the actions planned include rehabilitation of plants

through private sector initiatives; private financing of newgeneration Build, Own, Operate (BOO); Build, Own, Operate,Transfer (BOOT) to be encouraged etc. The World Bank and the

United States Agency for International Development-Office ofTraining Initiatives (USAID-DTI) have shown keen interest inthis programme.



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Government Initiatives on PPPy The Federal Ministry of Water Resources recognizes the

absolutely necessity to address the infrastructural gaps throughincorporating PPP best practices in the procurement of ourhydro-power dam.

y The Ministry recently unveiled its Road Map of the Water Sector

to help re-position the Federal Ministry of Water Resources toachieve the set agenda of Federal Government in this criticalsector, and to keep on tracks with the Millennium DevelopmentGoals in water.

y Establishment of Infrastructure Concession and Regulatory

Commission (ICRC) to provide the regulatory and institutionalframework for the Ministry and its Agencies towards adoption ofPPP practices.



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Government Initiatives on PPP Cont.y This in effect will address the water infrastructures deficiency

and the need to attract private sector initiatives in terms offunding and technical expertise.

y In his address at the recent Presidential Summit on Water, 17thJanuary, 2011, President Goodluck Jonathan, GCFR, directed that,The Infrastructure Concession and Regulatory Commission

(ICRC), Bureau of Public Enterprise 22y (BPE) and the Ministry of Water Resources should therefore in

line with this roadmap work out the needed regulatoryframework, particularly the private sector participation in thewater sector.

y There is therefore no other choice for the Ministry than toincorporate PPP options in this sub-sectoral development of ourwater resources.



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Ena ling rameworks for Private

Sector Partnership (PSP)A. Legal Framework:

y To ensure public authorities can enter into agreement for theimplementation of privately financed initiative (PFI)

y The Privatisation and Commercialisation Act 1999

y The Infrastructure Concession Regulatory Commission Act 2005

y Public Procurement Act 2007



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Ena ling rameworks for PSP Cont.B. Financial Framework:

y T

o ensure the Ministry, Departments and Agencies (MDAs) havethe capacity to carry out economic appraisals of projects andplan a national 15-year investment strategy.

y To ensure enough liquidity is made available to investors for PPprojects.

y To develop new specialised funds and secondary markets foradditional sources of funds for PPP projects

C. Institutional framework:

y The provision of appropriate guidance, training and resources to

plan, procure and manage investment projects and publicservices effectively and efficiently

y Providing expertise for ensure Value For Money on public sectorprojects.



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Benefit of PSP Cont.y Provides a Win-Win for both the Public sector and the private

sector .y Increase in population will translate to increased power

requirement s.

48

2011 2020 2025 20502015

150,000,000

178,000,000

210,000,000

225,000,000

289,000,000

Foreca ofGrowth i Nigeria' Population

P$ % & ' (

)

0 $ 1 2 S

$ &rc 3 : UNFP

4



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11. Conclusion



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Fed Min of Water Resources 50FEDERAL MINISTRY OF WATERFEDERAL MINISTRY OF WATER

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