NRECA International has signed a $10 million, five-year contract to take over the operation of a struggling distribution utility in south-central Nigeria and transform it into a profitable company that provides high-quality service to its customers.
The contract is with Geometric Power, a private company that NRECA International has worked with in the past, said Dan Waddle, senior vice president of NRECA International. The company, which is just now acquiring the rights to the utility, approached NRECA International about taking on the project.
NRECA International will face the daunting task of taking over a utility that, before being acquired by Geometric Power, had been poorly run, had limited resources, and historically managed to collect payment from only about half of the approximately 165,000 households it serves, he said. The utility is based in the city of Aba, located in the Nigerian state of Abia.
“This is going to be an extremely challenging project,” Waddle said. “We’ll be taking over a distribution system that’s in a very poor state of affairs, with less resources than we’d like. And we’ll be walking into a situation where we don’t really have a handle on how bad the infrastructure is.”
When the work begins this spring, NRECA International will assign three full-time employees to the utility, supported by a technical team of 10 NRECA engineering, commercial and management specialists. The NRECA team will evaluate the training needs of the existing distribution utility team and design a program to build capacity and improve technical, commercial and customer-service skills, Waddle said.
“Our goal is to make it a high-functioning utility that provides quality service and makes a profit,” he said. “This gives us an opportunity to determine how we can improve performance. It’s an important opportunity not just for us, but for the power sector.”
The Nigerian contract is the largest of about a half-dozen African contracts that NRECA International has been awarded during the COVID-19 pandemic.
“We haven’t really seen a slowdown,” Waddle said.
The pandemic has forced international communications to be managed virtually, which can be a problem when dealing with partners in nations where internet connectivity is an issue, he said.
“In pre-COVID times, we would just travel to where the project is,” he said. “Very few of our team members have traveled over the last 12 months. Communication can be tough, but we’re doing the best we can.”
While working under these challenging conditions has been disruptive, the NRECA International team continues its efforts to do what it can to grow the incomes and improve the quality of life of people around the globe through electrification efforts, Waddle said.
“We hope that this project in Nigeria results in a big win for the community in Aba and we are able to support our client to demonstrate how to achieve high quality of service and establish a financially self-sustaining distribution utility,” he said.
Erin Kelly is a staff writer at NRECA.