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Friday, July 12, 2024

NAWEC MD confident of stability in electricity supply soon, as he speaks on new projects

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The National Water and Electricity Company, NAWEC, has come under immense criticism from critics who expect more from it but in this exclusive interview with The Standard, the company’s Managing Director, Nani Juwara, said NAWEC has made significant strides since 2017.

The Standard: Mr Juwara, how has the journey been like since you took over the managerial position?

It has not been an easy journey. We have done a lot since the change of government to date but we still have a lot more to do, in terms of generation expansion, network expansion, upgrading to improve the quality of service that we provide. We have to provide more access for communities that are yet to be served countrywide. So it’s a challenging job but it is something that we have made a choice for ourselves. After leaving high school, I have never worked in any other place other than Nawec. For 28 years now I have been around and we have gone through a lot in the past and still going through a lot but we have achieved a lot during the period as well. As I said, from 2017 to date, a lot of improvements have taken place in this sector – Nawec has grown in size, human numbers and staffing. We have also improved on the quality of service that we provide. Of course, still we have lot of challenges when it comes to the transmission and distribution network. So, from 2017 after the change of government – the first step the government has taken is to encourage NAWEC and the Ministry of Energy to develop a road map, an energy sector road map so that we will be able to define our short term, medium term and long-term investment requirements and to be able to mobilise the necessary resources to do the necessary interventions in order to improve our service delivery.

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In 2017, we developed a 5-year road map meant to take care of some of the short term and medium-term investment needs of the company and this was supported by the World Bank but, of course, other donors also supported the implementation of the road map. The World Bank was the main coordinating donor agent that has helped galvanize other donors to come in and support the plan. We have done some interventions in generation where we increase the generation capacity. Before 2017, and in fact at the beginning of 2017, the total available capacity we had was almost less than 45 megawatts and the demand was about 70 megawatts but with the interventions that we have made from 2017 to 2018, we have increased the available generating capacity up to 80 megawatts by 2018-2019. So, we are able to meet the demand during this period and we have done some interventions on the network to improve the stability issues during that period. So, at that time by and large, we have been able to stabilize our supply within the Greater Banjul Area and in 2018 equally, we had engagements with Senelec, a Senegalese company, just like NAWEC in The Gambia, it is a public utility company. For the fact that they have excess generating capacity at the time and we were having a lot of challenges in our rural operations because we were running smaller generators that use light fuel and they were very inefficient and we could not meet the demand at the time as well in most of our rural operations. So, we strategised, to say, it would make sense to have that bilateral relations with our neighbor – Senegal because they have excess energy and we can easily interconnect to provide supply to all rural areas which are closer to some of their networks and it required minimal investment to be able to provide reliable and efficient energy supply within the rural communities. This, we started, with the North Bank – we interconnected at Kerr Ayub and later at Amdalai as well. So, those two interconnection points gave an opportunity to the North Bank Region for the first time in the history of the country, to enjoy 24 hours electricity supply. Prior to that, these communities were only enjoying electricity supply for less than six hours; in some instances at most, 11 hours. We operate in the morning and we go off by 1PM and come back on at 6PM and then go off again at 1am. This has really affected the livelihoods of the people in these communities and it has also affected businesses in general but when we intervened through that interconnection with Senelec, we have seen remarkable changes in those rural communities. So, businesses have come up and lives have changed in general because power is stable and we are happy to say that we are very proud to be part of that achievement. Personally, I am from the rural area and I know how that has changed lives in those communities and when we sorted out the issue in North Bank Region, and Lower River Region, that subsystem is covering Niumi, Baddibu and Jarra – those places were sorted out through that interconnection. The recent engagement we had with Senelec was to interconnect Basse as well because after the North Bank and the LRR we had a similar challenge in CRR and URR. Then we took the same initiatives to engage Senelec to have an interconnection between Basse and Tambacounda. When we did that also today, for some of us who came from Basse, we have seen the difference, power supply is very reliable. I can say even more reliable than Greater Banjul Area because the network is fairly new and the supply is more stable, so both CRR and URR are now enjoying more stable power supply even more than GBA thanks to the partnership that we have with Senelec. You know, sometimes I always want to clarify that most Gambians are not used to energy trade between countries; they have no idea about it and I am not blaming them because of their lack of knowledge about the issue but trading in energy is worldwide. It is not peculiar to only Senegal and Gambia but all over West Africa – the entire Africa – the whole world – Asia – Europe, countries are all interconnected and they are trading in energy because we are all going for less cost. Wherever it is cheaper you go for it. It doesn’t make sense you have very old generators here, very inefficient and they use alot of fuel – lubricant oil that are very expensive but because you want to be the nationalist type, you say it doesn’t matter, it has to be my own but, if you are getting something that is cheaper than yours, why not go for that so that at least your cost can go down and your operation can be sustainable but if we talk about our relationship with Senegal, people will say we are mortgaging our country to Senegal but believe it or not, that is not the case. What we are doing is a symbiotic relationship. You know it’s not like we are dependent on them but we are depending on each other as partners. Within the Greater Banjul Area, we have done a lot of improvements as well. Between 2020 to 2021 through a number of projects, we have expanded our network to almost 77 communities including some communities in Kiang for the first time in the history of this country. The people of Kiang have never seen an electric pole before our intervention in 2019-2020. So, we are also very proud to be part of that achievement to say it happened thanks to the support of the Government of the Gambia especially the president but it happened when we were in Nawec and we are part of that success story. As we speak, we have a lineup of projects that are being implemented to provide access to more Gambians, more communities countrywide because we had a plan and this plan we have the buy-in of the donors and they have come in with full support because they have the confidence in the government and the management of Nawec; that we are doing the right thing and because of that, they will support us to provide access to our people and as we speak, in addition to those 77 communities, we are going to electrify another 700 communities from now against April 2024 countrywide. We have four major projects and all of them have been signed and the financing is secured. We are getting financing from the World Bank, European Investment Bank, European Union and the African Development Bank, all geared towards modernizing the energy sector. If you look at the four major access projects, we have the project that is called Eco-rep fully funded by the World Bank through the Ecowas Commission and three countries are benefiting from that project support. That is Gambia, Mali and Guinea Bissau. The Gambia received a $66 million grant for the project and we are going to electrify in that project alone over 298 communities and that will include communities in the West Coast Region, LRR, NBR and in CRR North and South. In addition, we also have another project that has been funded by the World Bank, EU and the EIB also to provide access to more communities particularly in the rural areas, key among them is the first phase which we call Germo Backbone Phase 1 which is currently under construction. That is Laminkoto to Diabugu and 46 communities are going to be covered and as we speak, the contractor is on the ground and they are erecting the poles in those villages and the targeted date to complete is going to be March 2023. We can say for certain, for the first time in the history of that region as well, they will also enjoy electricity supply thanks to the support from the president and the government of the Gambia and also the donors.

We are also very soon going to commence another project which will provide access to over 233 communities and 165 will be in URR and the remaining communities are going to be in the North Bank Region. This is going to be the Backbone Phase 2 which is funded by the World Bank, EU and EIB. The contract has been signed and the contractor is mobilizing – the targeted date of completion for that project will be April 2024 and by the end of 2023, all those communities at least minimum will have the poles erected and we can assure them that they will get power supply either by December 2023 or early January/February 2024 because the project is expected to close by 2024 April.

In addition, we also have a project that has been funded by the African Development Bank which is also covering over 133 communities. That is going to be in the North Bank Region and also part of LRR and West Coast Region. The contract has been signed already so the contractor is just waiting for the advanced payment. When that is received, they will mobilise and we are also very optimistic that will be completed soon because it is not as big as these other projects, hopefully by December 2023. So, by and large, we are targeting to cover 700 communities from now against December 2023 to April 2024. These projects are all signed contracts and some of them are ongoing and then others are on mobilization and very soon, they will start the physical implementation. So there is a lot of hope for our people because energy is a basic human right now, not only water. We all need electricity to change our lives and this is what the government of the Gambia is advocating for and we at NAWEC are the implementing agents for government. We are also committed to make sure that we fulfill the social contract between the government and the electorate. That is our responsibility and mandate and we will not leave any stone unturned to achieve that on behalf of the government. So, a lot is happening. We have also signed a contract to build a solar plant in Jambur which is a 20 Megawatts solar plant to be part of our energy mix because we need to have renewables also as well because we have all learned our lesson from this Ukraine and Russia war. International oil prices have jumped so high and significantly that it is definitely affecting our operations. It is a global phenomenon so it is not only NAWEC but the entire world is facing an energy crisis. We all know that not only energy but the key issues that are really bothering the whole world today, one of them is energy even in the developed countries. Let me give an example; in Europe today in terms of the cost of energy per Megawatts, it used to be 35 Euros per megawatt, today it is above 350 Euros megawatt. This is huge but the Gambia is not an exception as well. We are also facing similar problems that’s why as management and as a country, we have taken the decision to also look at some other sources of energy to be able to reduce our cost because if this trajectory continues it would be extremely difficult for Nawec to continue to operate and be sustainable because there is no way. The way the cost is going up and it’s not reflecting on our tariff, there is no way we can sustain our operations. That’s why we are struggling. As we speak today, we are struggling big time in terms of our cash flow for the fact that these costs are beyond our control. We have seen what is happening with the oil marketing companies locally, they are claiming for an increment all the time but our cost has never gone up since 2014. We are still maintaining the same price even though costs during Covid-19 period and also during the Ukraine and Russia crisis have all gone significantly up – even transportation costs have gone up but our tariff has never changed since 2014.

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How is NAWEC able to sustain its operations under these difficult times?

Very good question and I think any genuine Gambian would ask that question about how Nawec is able to sustain its operations under the current circumstances. If only you have the interest to see this company move forward, you would have asked that question. Our mode of operation in this country is a 100% heavy fuel base. We are only using generators to provide electricity supply countrywide. Even the power that we are getting from Senelec is from generators and Karpowership is from generators, so automatically for Karpowership for example, when oil prices go up, whatever cost they incur on the fuel it affects the customer and who is the customer? Nawec. And unfortunately, this cost that we are incurring from that increase in cost from Karpowership and for other suppliers be it spare parts, meters or any other material that we import from outside it’s not been transferred to the customers automatically just like what is happening to our suppliers because for the suppliers as the cost go up automatically, they add it to our cost but our cost is not directly transferred. That’s why I mentioned that since 2014, our tariffs have never changed and we have seen significant cost increase in all the major items that are beyond our control. So currently, Nawec is facing difficulties in terms of our cash flow for the fact that all prices have gone up and especially international oil prices due to the Ukraine war. If big and more sophisticated utility companies in developed countries and in developing countries are struggling much more a small utility like ours in an economy that is also very small. It is obvious that we will be facing some cash flow challenges and that’s the reality so in most instances what happened under such trying times especially for African utilities or Sub-Saharan utilities, the fact that people’s standard of living or in terms of their income levels are also low, if governments are not in the position to be able to increase the tariff for utilities to recover their entire cost. What happened is that normally they receive government subsidies so that they can close the gap between the cost and what they are charging to the population and businesses. This is what is happening for all utilities especially in the Sub-Saharan countries, under such circumstances because of the high cost of inputs, it would be definitely impossible to cover your entire cost because that would probably be a huge burden for low income earners, for the poor people and government has a responsibility to everybody. So obviously in most circumstances in Sub-Saharan countries governments take the initiative to provide subsidy to support the entities so that they can continue their operations. We have challenges when it comes to cost issues but that’s why I told you we are implementing this renewable energy projects so that going forward our continuous dependence on heavy fuel oil operated generators would be minimal and we can have some cost savings particularly for the fact that this solar plants will be available for us for most part of the day. So you can shut down this very expensive oil based generators and then make some savings during the day and that will have a significant impact in your cost and also on your revenue. So, I believe these initiatives are something that will continue and just on the 10-11 of October, we had an international meeting here in the Gambia organized by the West African Power Pool. We invited all OMVG member countries to discuss the planned 150MW solar project which is a regional project coordinated by the West African Power Pool and supported by the World Bank and it’s going to be located in the Gambia, somewhere in Soma. This is a huge investment, so we call everybody because the capacity or the total installed capacity which is going to be about 150megawatts, Gambia alone might not take everything at once. So, we had given the opportunity to our neighbors to also express interest to buy energy from the Gambia when we have the solar plant ready, so we had that interesting discussion to express interest so all the OMVG countries – Senegal, Gambia, Guinea Bissau and Guinea Conakry were there. It’s going to be in two phases – the first 50 megawatts, would be energy that would be consumed by Gambia alone and Nawec would be the off-taker but this capacity can be scalable up to 150megawatts. There is going to be an additional 100 on top of the 50 in Phase 2 to scale up so that other countries can also buy energy from the Gambia because solar is going to be much cheaper than other sources of energy that they are also getting their supply from. So, we in the future would also be buying energy from Guinea because they also have hydro which is also much cheaper than our generators so we can also have access to buying energy from the hydro that Guinea has because that’s their competitive advantage. They have abundant water resources and they’re able to build dams and energy is cheaper, so we buy from there. We also have abundant sunshine here and we have availability of land which is also a competitive advantage so then they can also buy energy from us because it is going to be cheaper than their hydro and Senegal can also buy energy from us. Probably is going to be cheaper than their generators that are operating in Kaolack. So, this is how the relationship is going to be and the West African Power Pool is coordinating all these activities because what is going to happen is that all of us as utilities in West Africa are going to operate in an energy market within the West African Power Pool Energy market. All our networks from Senegal, Gambia, Guinea Bissau, Guinea Conakry, Sierra Leone, Liberia, Ivory Coast, Ghana and Nigeria would all be interconnected, then there will be one network and one market for all of us so that we can trade just like we are trading in other commodities. That is the future of the energy sector. This is what is happening in Europe and Asia so we in Africa or this part of Africa are not exempted. Today Nigeria is supplying electricity all the way to Niger, Togo and Ghana is also supplying Togo and Benin while Ivory Coast is supplying energy all the way to Sierra Leone. These are all possible because we have networks that are interconnected. Those countries and those networks are also going to be connected to OMVG networks. Gambia and Senegal lake is complete for the OMVG, now we are waiting for the line from Guinea Bissau to come to Senegal and the line from Guinea Conakry to hit Guinea Bissau and then we have complete network which is the future because the cost of energy is going up on a daily basis and we have to make sure our operations are sustainable. But I just want to make this very clear, electricity is not a social commodity, it is a commercial commodity – one way or the other, it must be paid for, either by the customers or by the government. So, that’s the hard fact because the cost of energy is not cheap anywhere but it depends on the level of intervention from the government and whatever other cost has been transferred through any other means but energy is not a cheap commodity and it is not a social commodity. It is a commercial commodity but we are going to continue to push hard to make sure we sustain our operations despite the challenges because already we cannot go back to those old days where load shedding was the order of the day, we use to have a daily load shedding roster – today you have six hours on, tomorrow you are 12 hours off. We don’t want to go back to that history, that is a dark history for us and we have no interest in going back there. We want to move forward and we need the support of everyone. Of course we are getting the support of Gambians and the support of the government. They have stood by our side and helped us to mobilize the required resources to make sure that we improve on our service delivery and will continue to appeal to the government to continue to support this entity that belongs to all of us and we are grateful for what they have done so far and we are appealing for the continuous support so that at least we can be a utility that we can all be proud of going forward.

How is NAWEC fairing in terms of its debt servicing especially when it comes to Karpowership and Senelec?

Just a correction on the issue of the debt because the majority of what we have from the World Bank and European Investment Bank are all grants. If there is any loan component that is not on Nawec, that might be on the government but all the money that we receive from the donors through the government of the Gambia are all on grants to Nawec. So, that’s no burden to us. When it comes to Karpowership, it is obvious Karpowership is a necessary evil for us. I hope you understand for the fact that in the absence of Karpowership today, the available generating capacity that Nawec can depend on will not be adequate to meet the demand in the country. So as a result, we need Karpowership to provide that base load requirement for Nawec. So, under normal circumstances just like Karpowership when prices go up, Nawec prices should also equally go up but you know Karpowership are private players they will not wait and say Nawec you are not increasing your prices regardless so because of that we will not also increase ours. You know private people will never incur any costs without recovering it, otherwise you will be out of business. So, this is exactly what I was telling you that since 2014 to date our tariffs have never changed despite an increase in costs, so Karpowership’s cost has gone up mainly because of this Ukraine war. We were managing because it was within the normal cost whether it’s been operated by Nawec or by a private entity but we are seeing a lot of efficiency in the operations of Karpowership than Nawec because for them you can go home and sleep and they will assure you continued supply unlike our own because most of our generators are very old – some of them are over 30 years, you cannot entirely depend on those ones. So in the absence of Karpowership reliability would be a challenge. Karpowership came simply because we had that gap and needed to be filled for an emergency basis and in between, there was that requirement to have an investment in the generation sector but unfortunately it didn’t come as expected. Most of the investment or support that we have now is on the transmission and distribution and not on generation other than the 20MW solar plant that we are going to start construction by January 2023. If we have an investment that is far cheaper than Karpowership, any other energy source, of course we will let Karpowership go because we want to go for less cost at all times unless Karpowership is also operating at a cost that is also competitive to others and that’s why we have all this investment in the solar projects and we are also working for the interconnection with other West African countries. We are getting 30MW from Senegal and the price we are paying for that is far cheaper than our cost of operations in the Gambia. So, it makes sense. Today, if we don’t have that interconnection OMVG to get power supply from Senegal we only have to rely on our own generating sets and it would not be adequate to meet the increasing demand. Today, the pick load demand is about 90 megawatts so we are coming along. You go to all the offices today, they are fitted with airconditioning, not one or two and all the offices have it. Before in the past you only have fans in offices. You go to private homes today everyone is having an air conditioner so that has really put the utility under lot of pressure and that means the demand is increasing on a daily basis so we also have to match this with the required energy or generation capacity to meet that demand which is a huge challenge but by and large, we are not fairing bad. Karpower is here for the next 2 and half years while the Senelec contract is for five years and we have signed another contract with the EDG to get supply from the hydro from Guinea but that has not started yet because the OMVG line from Guinea to Guinea Bissau and Gambia is yet to be completed. We hope by 2023 that also would be done, if that happens then we can get some more power from Guinea to meet the requirements of our businesses in this country because businesses in this country require stable and reliable power supply. Under the circumstance, we need to have more power to be able to reduce costs and also make our service more reliable.

We also have the transmission project which is upgrading the current transmission level from 33KV to 225KV. We have visited Jabang recently and we have seen the progress of work. It is a $23.5 million project and it is going to be implemented within 18 months before the end of 2023. We hope that we will be able to Commission that project and it is going to completely change the dynamics in our sector. One; we will be able to evacuate more power simply because the evacuation capacity of that network is higher than what we currently have. We will have two substations; the first one in Jabang which has two big power transformers each with 70MVA capacity and that means we can evacuate up to about 140 megawatts from that end and we have 33KV lines that are also going to interface with the substation to go into our network. That means we can now evacuate power and we will be closer to the load centers, we can reduce the losses and we can improve the quality of service.

All those things are going to change the dynamics in the energy sector. We will have for the first time in the history of this country a national Control Center where we are going to integrate our transmission network and it’s going to be remotely controlled, automated unlike now where even fault finding, we have to do everything manually and that’s why sometimes it takes very long time when we have fault on our network to be able to spot where the faults are and customers will be complaining. Whiles we are doing the fault finding, that line must remain down until fault is seen by physically inspecting the entire line which is very time consuming. This national Control Center will help us eliminate or minimize that physical inspection to make sure that you can easily pinpoint where the faults are and then you can easily go and address them and not necessarily take that very long time.

So, at least our response time will also improve and our losses will go down and quality of service will improve. So, the 225 lines is at the same level as the OMVG network and also the rest of the network within the Sub-region and will also give us the flexibility and there will be redundancy not just because when a particular feeder has an issue it trips the entire system and we have total blackout. We hope with the completion of that project total blackouts and unplanned outages for a long time would also be minimal because you cannot say it will be completely eliminated but we can significantly minimize that. So, I think we are on the right footing – we just need everybody’s support – the government is giving all it could to provide the necessary support to us to make sure that we improve our service delivery and the commitment from both the management and the board is there so we are grateful to everyone and for your patience because it’s not easy. People want this service 24/7 so obviously without their patience we will find life very difficult to operate but people are very patient with us and they’re supporting us morally, so we just encourage everyone to continue doing that and I think it’s going to be sooner than later for us to achieve what we want to achieve as a country

Finally, is Nawec able to pay its bills when it comes to paying Karpowership and Senelec?

We have challenges to meet our obligation to them on time. We are also struggling like any other business in this country to be able to source the necessary foreign exchange to meet our obligations to Karpower or Senelec. That’s obvious because we know currently how it’s challenging in the market to source forex. Just like the commodity traders we also have the same challenges because our payments to Karpowership and Senelec are in foreign currency. So definitely we have some challenges and also because of the cost increase sometimes you have some challenges in your cash flow to be able to meet your obligations to them on time but because they are partners, we will continue to work together. Maybe this is going to be for a period, things might change because we have never had any issue with any of them in the past and in fact we don’t have any issue as such but because sometimes we have some delays. Of course, sometimes significantly delay because of our cash flow situation. That is the hard fact because their cost has gone and our revenue still remains the same and we used to get alot of revenue also from the hotels in the past but you know since 2019 during COVID and even after COVID, still now our hotel industry is not in full operation so we used to have almost about 40% of our revenue from hotels and industries. That is no more the case because their occupancy has gone down and has also affected our revenue from that side. So obviously, we have these challenges and it’s a global issue, we are not an exception but we have to have the resilience to make sure that we do what we can to meet the expectation of the people.

Thank you very much MD

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