INTERVIEW: Our agenda for Nigeria in energy, transport, agric sectors – U.S. Trades Director

US Ambassador & Tom Hardy
US Ambassador & Tom Hardy

At the just-concluded Nigerian International Petroleum Summit (NIPS) in Abuja last week, the Director, United States Trade and Development Agency (USTDA), Thomas Hardy, signed an agreement with the Nigerian National Petroleum Corporation (NNPC) for the development of a $1.1 million power project in Abuja. Shortly after the ceremony, the U.S. Ambassador in Nigeria, Mary Beth-Leonard, joined Mr Hardy for an exclusive interview with PREMIUM TIMES’ Business & Economy Editor, Bassey Udo, on the significance of the project and plans by the U.S. government to boost trade with and investment in Nigeria.

Excerpts:

PT: The USTDA signed an agreement with the NNPC on the development of a power plant in Abuja. Can we have more details on these projects, in terms of the roles of each partner?

HARDY: The United States Trade and Development Agency (USTDA) is an independent agency of the US government. The agency is making a commitment guaranteed by the US government to invest about $1.1 million to bring American technology, ingenuity and services into the Nigerian power sector.

The goal is to see General Electric, the technology provider, work with QPIC and NNPC to bring greater investments into Nigeria.

We will do the detailed feasibility studies and analysis for the construction of a 1,350 megawatts gas-fired power plant using gas from the Abuja-Kaduna-Kano (AKK) gas pipeline operated by the NNPC.

The goal is to look at the economic, commercial, legal and environmental benefits to attract financing. The USTDA will pay for the project on a milestone basis as work in done based on the contract terms with the NNPC.

One of the most important things is the U.S. government’s approach with the USTDA in charge of the front-end investment in the project.

With the USTDA comes other US government agencies, like the World Bank, US Export-Import Bank, International Finance Corporation, as potential financiers to make the investment a reality.

Our goal is to take the initiative from project concept through USTDA funding to bankability, financial closure and implementation.

It does not require a counterpart funding by Nigeria. USTDA has made 100 per cent commitment to fund the project. We believe we have the right partners in NNPC and GE to handle the project.

The USTDA will bring not only financing but also American ingenuity and technology to establish the quality infrastructure Nigeria rightly demands at this time.

The USTDA’s role in the partnership with NNPC will be to bring in US companies with American technology and solution as well as investment to drive the growth of the Nigerian economy and to deepen the long bilateral relations the US government has with Nigeria.

It is our belief in the partners’ capacity to see this project through that we are putting the financing forward to invest in new power generation in Nigeria. It is part of the U.S. government’s strong belief in the future of the Nigerian economy.

PT: There is a huge concern about energy poverty in Nigeria, despite the enormous natural resources here. How do we see this initiative playing a key role in helping solve this problem, particularly granting more access to power to millions of Nigerians?

HARDY: The USTDA’s role in the energy sector is much broader. This is just one piece in a much larger investment the USTDA has already put in Nigeria.

When we talk about energy poverty, USTDA has invested in a number of mini-grids driven by private sector developers in Nigeria. We are supporting them with feasibility studies for the deployment of their services in communities.

Similarly, a US-based company in Atlanta, Georgia, is currently in the process of building another micro-roaming facility in Nigeria. This is also made possible by USTDA.

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In Port Harcourt, we are working towards getting Americans to bring smart meter technology that has led to better management of electricity distribution and better use of resources.

PT: The USTDA is also working with Abuja Electricity Distribution Company. How does this connect with what USTDA is doing in Nigeria?

HARDY: It is still part of the partnership I am talking about, not only in electricity generation, but also working closely with the Transmission Company of Nigeria (TCN) on transmission issues.

And the DISCOs play an important role in this. Our role is to introduce technologies that will make them more efficient.

We are working with a lot of the DISCOs, name Ikeja DISCO, EKO DISCO and Abuja. A lot of those investments are in bringing representatives of those DISCos to the United States to train them in the use of American technology to help them better manage their power generation operations.

PT: Apart from the agreement signed with the NNPC, could you let us know which other similar agreements the USTDA is signing or ongoing discussions during your stay in Nigeria for this conference?

HARDY: Specifically, we came for this agreement with the NNPC. But, we are fortunate to have the US Embassy in Nigeria set up a number of robust meetings with other key agencies in the energy sector, including the TCN, Ministry of Power, Rural Electrification Agency and others, to explore opportunities for future partnerships, collaborations and investment.

We have a lot to take back to Washington. But, it will be premature for us to talk about those meetings yet.

But, the thrust of the discussions at the meetings centred around how we could help the country increase its power generation in the agricultural sector, to make the agricultural industry more efficient; to ensure they are able to process their products locally.

We have to go back now to think about how we can address the issues raised during our meetings with REA, Central Bank of Nigeria, about how the USTDA could help bring greater energy generation into the agricultural sector in Nigeria.

PT: Talking about agriculture, which is one of Nigeria’s key strategic area of competitive advantage. In your meeting with the REA, did you touch on the issue concerning the difficulties rural farmers, especially women, face in bringing their products from rural farms to the markets in the cities?

HARDY: Just last November, we brought USTDA’s finest agricultural companies. We financed their trip to the United States and took them round a number of facilities, including their introduction to tractor manufacturers, seed companies, to introduce them to more modern mechanization of agriculture to increase crop yields. We have actually made specific investments in supporting agricultural efficiency in crop yield.

PT: When you spoke earlier about your meetings with the Ministry of Power and TCN, were there specific areas in the energy mix you are looking at with government, like investment opportunities in solar and other facilities to provide access to power?

HARDY: What we talked about were modular, mini-grids and solar systems. Investments we are already making have provisions for solar as a source of power for the mini-grids. What we discussed with these agencies was a roadmap, by taking stock of our investments, highlight areas of our successes, and where the investment opportunities are going forward.

USTDA has a history of success in the energy sector in generation, transmission and distribution.

In the next few years, USTDA will be bringing leaders from Nigeria to the U.S. to meet with innovative technology companies with smart card solutions.

We will be hosting a conference here in Abuja later this year or early in 2021 to bring American companies to explore the opportunities that exist under the smart card initiative to address the problem of distribution of energy in Nigeria.

PT: We learned USTDA is also involved with Dangote Refineries. What is that about?

HARDY: We have worked with Dangote Group for 20+ years on a number of their projects. USTDA has invested in ways to drive the U.S. companies’ engagements. Under the refinery, USTDA and Dangote agreed on the UOP process solution. Under the agreement, USTDA will provide about a million dollars of training for engineers and service companies at the Dangote refinery to help them be trained on the UOP process technology.

When the Dangote Group went with the UOPs process technology for the new refinery, USTDA stepped in to provide capacity building for the engineers to raise their skillset and skill level to ensure the refinery operates up to the capacity as well as ensure they will be trained on the American technology the Dangote Group is investing in.

PT: Nigeria, and indeed Africa, holds a lot of opportunities for agencies such as the USTDA under the African Continental Free Trade Agreement signed last years by African countries, particularly towards partnerships to generate the energy necessary to drive industrialization. How does this fit into your agenda in Africa?

HARDY: Looking continent-wise, Nigeria has been the largest market for U.S. investment within the sub-Saharan Africa. But, where USTDA is investing in Africa is in energy, transportation, IT, including everything from telephony to the backbone. We are moving into healthcare for the first time and agriculture in a significant way.

Two years ago, we were in partnership with the Lagos Teaching Hospital to deploy American technology to the new oncology centre. We brought over the medical team on behalf of the U.S. government and introduced them to varying technologies, including General Electric equipment, and the opportunity and investment the Lagos Teaching Hospital was made to ensure greater and better healthcare for Nigerians.

PT: Some observers say Nigeria appears not to have explored effectively the opportunities offered under the African Growth & Opportunity Act (AGOA). What do you see as the problem responsible for this?

HARDY: When I worked in Congress at the very early stages, it provided a roadmap for development. Countries have taken advantage of it. It provided duty-free and port free access to the U.S. market. What the USTDA has been trying to is support the basic infrastructure to drive economic growth across the continent to take advantage of AGOA. We do not get involved in manufacturing per se. But, we are helping to build the transportation, rail linkages and energies that make countries better able to take advantage of the opportunities that AGOA presented.

But, the US government will love to see Nigeria tale advantage of these opportunities through AGOA through a number of mechanisms that we have.

For instance, the AGOA forum happens every year to discuss about the obstacles and solutions for AGOA. There are other bi-national commissions and investment dialogues to examine some of the obstacles to trade and investment s as well as how to find solutions to them.

I believe people can take advantage of all those opportunities the U.S. government has to offer.

PT: At the end of this conference, what messages would you be going back to Washington with?

HARDY: There is no doubt that I will be going back home with a whole lot of messages of hope and opportunities for U.S., European, and Asian companies investing in Nigeria.

The USTDA will be following the lead of other U.S. companies here, like GE, Chevron, already making huge investments in Nigeria. We want to play a positive role to ensure that the necessary infrastructure is there to drive economic growth for the country.

Our biggest investment is in the U.S. government’s agenda to double trade between U.S. and Africa. If that is going to be possible, it means the U.S. government and its companies will have to be working with Nigeria, which remains the biggest economy in Africa and the greatest prospect for prosperity in the continent. The U.S. government is committed to continuing to grow investments in Nigeria.

EDITOR’S NOTE: This interview has been edited to reflect the fact that while the U.S. ambassador attended the interview, Thomas Hardy responded to most of the questions.


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