Exclusive Interview with Lolu A. Adubifa, CEO Lavayo Advisory Services, Nigeria
In the long term, an enabling environment for investments to prosper needs to be put in place”
1) Let’s start with some background of your organisation and your role.
I am currently the MD of Lavayo Advisory Services. Lavayo is an advisory and project development firm primarily involved in the energy (oil and gas, power) sector in Nigeria.
2) Any particular projects that you are currently involved in that you are excited about?
Currently working on a financial re-structuring mandate for a large Nigerian finance institution that is battling to recover funds from a bank loan gone delinquent. Also we are working as the project developer for Scanpower Ltd which is actively developing a 450 MW IPP in the Lekki Free Trade Zone in Lagos State. The project is currently in the licensing stage, with associated studies already completed and Siemens AG as project technical partners.
3) What are the main challenges in your view when it comes to financing power projects in the region?
Various challenges to financing in Nigeria today include tariff pricing, lack of liquidity (low capacity for local banks), high interest rates, and a weak regulatory system that allows an imbalanced financial chain in the power sector.
4) What is your vision for the industry?
My vision for the Nigerian power sector in the short term is to have the regulatory issues addressed, and its functions strengthened by experienced professionals. This would enable the derivation of tariffs, and other fees to tarry with the associated costs and risks borne by investors. In the long term, an enabling environment for investments to prosper needs to be put in place, which includes policies, payment procedures and guarantees for the power sector.
5) You are chairing a session at WAPIC on Pricing: Tariffs and Power Purchase Agreements: what are you hoping for in this session?
I am hoping to have a robust discussion with the panel and the audience on some of the challenges of pricing tariffs in Nigeria today. These include understanding the various cost buckets (feedstock, finance costs etc.) and also what steps could be taken to reduce costs. Nigerian electricity tariffs are at risk of escalating to unreasonable levels if the currency devaluation stays at current levels.
6) What will be your message at the event when speaking to prospective investors?
My message and central theme for investors at WAPIC is centered around the fact that the Nigerian power sector is fast evolving and with a clear set of needs, primarily centered around financial innovations and its technological aspirations. Attractive opportunities abound in the generation and distribution spaces for companies and investors with investment capital, technical skills, and innovative products.
7) How important is a forum such as WAPIC for the sector?
Wapic is a key gathering of industry participants across Africa including financiers, investors and technical providers. It is critical as a medium for all parties to meet for idea sharing, technical discussions, showcasing technologies and projects, and deliberating on best practices across the continent.
Source: ESI Africa