鶹Ƶ

Close
9/5/24

Voices of Hydro: Lamu Audu

In the “Voices of Hydro” series, hydropower industry leaders provide their insights on opportunities and challenges within the sector and the measures their organisations are taking to advance hydropower sustainably. These stories shed light on the people who supply affordable clean energy to the world.

This edition features Eng. Lamu Audu, CEO and Managing Director of , Nigeria's foremost privately owned hydropower company. After MESL's acquisition of the Zungeru hydropower plant in early 2024, the company became the largest hydropower company in Africa with over 2,000MW. Lamu, who also serves as a Vice Chair on the 鶹Ƶ’s Board, discusses the importance of streamlined regulation, attracting foreign investment, valuing your employees, and closing the gender gap.

What are the challenges facing the hydropower industry?

At MESL, we have prioritised human capital as our most valuable resource, recognising that success hinges on having the right personnel who are well trained and highly motivated. We have made it a point to attract, train, and continuously motivate our employees. Every staff member of MESL is a shareholder of the company.  By implementing shared ownership, we witnessed a significant shift in attitude and performance amongst our staff.

Additionally, we recognised a gender imbalance within our workforce. There is a lack of female engineers, so we developed policies to create a more inclusive environment and actively recruited female talent. After four years, MESL successfully increased the number of women representing our workforce, particularly engineers, through our training academy. However, despite successful recruitment and training, retaining female engineers is another challenge due to cultural norms and familial obligations.

This retention challenge underscores the importance for companies to create environments conducive to inclusivity and comfort for all employees.

What are the challenges Africa faces to develop renewables?

From MESL’s perspective, the challenges in Africa stem from the ongoing need for an evolution of the power industry, particularly in terms of regulation. As one of the largest players, MESL recognises that the regulatory landscape is not yet mature enough to attract the necessary funding for accelerating power infrastructure development. This poses a significant obstacle for a private company like MESL, especially in a region where hydropower is predominantly publicly owned.

In fact, there are few privately owned hydropower companies across the continent. We must advocate for policy reviews to facilitate more investment, aligning with the privatisation goals of the sector.  However, prevailing uncertainty within the environment poses a significant deterrent to potential investors, a challenge we are currently grappling with.

Despite these obstacles, our resilience has propelled us forward and established operational success. It has not been easy, but fortunately, authorities are beginning to see the direction we are heading is best, not just for Nigeria, but for the continent.

In Nigeria, for instance, our energy is mandated to be sold to a single buyer, the Nigerian Bulk Electricity Trading Company (NBET), through a Power Purchase Agreement (PPA) owned by the government. The Bulk Trading Company has struggled to fulfil its obligations, failing to recover the funds owed to us for the energy supplied and the investments made to establish the capacity. This situation poses a dual challenge for us as investors: our capacity remains underutilised, and the revenue from the utilised portion is not fully recovered.

As the CEO, tasked with protecting its shareholders interests, it is a significant challenge. We must develop a strategy where the government can liberalise the sector to directly sell to customers. This allows generating companies to be able to sell directly to other off takers. This would let us make deals with other companies that need power, growing our business and reducing risks. Although it has been tough for about three years, we are glad the government sees this as the best way forward.

Firstly, selling the excess energy directly would allow us to utilise stranded energy more efficiently. Secondly, it would decrease government liability due to less unpaid invoices. By selling this excess energy to other buyers, the government's financial burden decreases. This arrangement would also boost liquidity in the sector, as off takers pay invoices promptly and in full, sometimes even in advance. This shift would significantly reduce the pressure on the government and empower us to pursue further development and expansion. This will be a transformative change in the Nigerian power industry, driven by our determination to overcome bureaucratic hurdles.

So, these are some of the benefits of privatising and liberalising the power sector. The government should have less operational input and more involvement in policymaking, introducing policies that attract investment. 鶹Ƶ has a long service life; if hydro assets are maintained properly, they can last over 100 years.  The policies governments implement must support the sustainability we promote and will continue promoting. No hydropower is acceptable unless it is sustainable hydropower.  

Anything else you would like to add?

It is imperative not only to devise sustainable policies but also to acknowledge hydropower's expanding role as a facilitator for other renewable energies. It is essential for governments, the private sector, and other stakeholders to collaborate in implementing these sustainable policies.

We will continue these important conversations during the HydroPOWER Africa week in Abuja, Nigeria. This roundtable will gather senior representatives of African governments, energy companies, financial institutions, and industry members from around the world, to discuss what can be done to increase hydropower development in Africa.

Watch the interview