The privatization of Nigeria’s power sector in 2013 was a gamble the administration of former president, Goodluck Jonathan, took after many decades of government monopoly of the sector, which yielded more darkness than light. For those who bought the assets of companies that were carved out of the then Power Holdings Company of Nigeria (PHCN), it was a bigger gamble because, as they later found out to their chagrin, many of the assets were actually liabilities.
For the board of directors of Mainstream Energy Solutions of Limited (MESL), purchase of the Kianji and Jebba hydropower generating plants may have been a gamble. But appointment of LamuAudu for the herculean task of turning around the fortunes of the plants was not. They were convinced they had found the right man for the job. The man in whom they put their hope and trust has proved them right.
Audu is the managing director and chief executive officer of MESL, the company that shrugged off uncertainties to take over the Kainji and Jebba hydro power stations in a concession agreement with the Federal Government in November, 2013.
Despite what may be the negative perception about the power sector, the performance of MESL, with Audu in the driver’s seat, is what can best be described as incredible. The mechanical engineer with more than three decades experience in engineering has literally brought the two power stations back from the dead, with impressive figures to show.
At the time the company took over the two power stations, Kainji, with eight generating units and installed capacity of 760 megawatts (MW) of electricity, was operating at zero capacity. That is to say that nothing was happening at the station in form of power generation. It was not operational. At Jebba, with installed capacity of 578.4 MW, five of the six generating units were in operation, with available capacity of 460 MW.
Audu has since 2013 proven to be a turnaround expert, turning the two power plants away from the path of failure to one that is filled with success stories. He has been able to increase the total available capacity of the two plants to 922 MW, with Kainji as the star performer, operating from four generating units with available capacity of 440 MW, while Jebba contributes 482 MW to the national grid.
Available records show that this significant improvement enabled MESL to increase power generation from 2, 715 gigawatt hours (GWh) in 2013 to 5, 277 GWh in 2018, thus accounting for about 25 per cent of power generation in Nigeria over the period.
Audu believes the company has contributed in optimizing power generation in Nigeria and, most significantly, delivering on the objectives of the Federal Government for the privatization of the power sector. He says the company’s achievement is a clear proof of the success of the programme in terms of creating an avenue for private participation in the country’s power sector, with the ultimate goal of benefitting the economy.
Audu has put in place a robust Capacity Recovery and Expansion Programme that has enabled the company to focus on restoration of the capacity of the Kainji plant in a manner that would guarantee year-round power generation of at least 750 MW. He has also invested in satellite-based technology such as the Inflow Forecasting System and Operational Tool Software (IFS/OPT). This technology allows for easy flood management and projection of the flow of water into the Kainji reservoir, and also guides the company’s operations in being able to manage power generation in the two plants.
Before concessioning of the Kainji and Jebba power plants, they were under two separate managements. The board of MESL took the decision to consolidate management of the plants under Audu, with a mandate to institutionalize a strong work ethic among staff, and also put in place a competitive welfare package and a robust management framework. He was also asked to put in place a change management programme for employees of the erstwhile PHCN that were to be absorbed in MESL. It’s a move that has paid off.
The first step Audu took was to change the mindset of the staff and get them to begin to see power generation from the perspective of profit, not social service. “We needed the employees, including myself, to start thinking of power generation from a profit-driven perspective”, he told Forbes magazine. “I must confess that this took time, but we are proud of our achievements thus far in turning the plants around significantly and positioning for greater success in the future”.
He said the focus on staff welfare has been integral to the growth of the company, as employees now have a sense of ownership of the business. “Indeed, MESL has put in place a share trust scheme where every employee becomes a beneficial owner of the company on assumption of duty”.
Besides human capital, the company has put in place programmes that emphasize technical and human resource capacity development in order to be able to effectively manage the two power plants.
The company’s success has not only been in the area of power generation. It is evident in the bottom line as well. In just five years of operation, between 2013 and 2018, MESL grew from a loss of N1 billion to a profit after tax of N26.3 billion. It generated about N60 billion in 2018, up from N3.7 billion in 2013.
“The growth of the business from 2013 has been phenomenal, but this has not been without its challenges”, Audu said. “We know that we could perform even better if the issues across the value chain of the National Electricity Supply Industry (NESI) are addressed. For example, we have major challenges with the collection of receivables, as we are presently being paid a meagre 18 to 20 per cent of our invoices, due to collection losses at the distribution end of the value chain”.
What Audu considers a major turning point in the life of the company was the ability to repay a loan of $170 million it obtained to acquire the two power plants. Once the loan was liquidated, the road was clear for the company to begin the march to profitability.
He attributes the phenomenal growth of MESL to the vision and astuteness of the company’s board of directors, as well as the commitment and diligence of its management team.
Nigeria’s largest hydropower generating company has set for itself some lofty goals it will not have difficulty accomplishing. It is poised to support the stability of the national power grid by increasing its capacity and also contributing to national development through generation of power in a safe and reliable manner.
Audu is driving the company’s short-to-medium-term focus on the recovery and expansion of capacities at the Kainji and Jebba plants. The company has commenced rehabilitation of Unit 1G7 at Kainji, which is expected to add 80 MW to the national grid by the end of this year. Plans have been afoot for the rehabilitation of Unit 2G6 at Jebba, which will add about 96.4 MW to the national on completion.
Who is Audu?
Audu is what you would describe as a round peg in a round hole. He is, in simple language, the right man for the job of managing Nigeria’s largest hydropower stations. A look at his résumé tells you that he spent good time to study and qualify for the engineering profession, which means that he did not find himself in his current position by happenstance.
After obtaining both the Ordinary and Higher National diplomas in Mechanical Engineering from the Ramat College of Technology, Maiduguri and the Kaduna Polytechnic, respectively, he went to the University of Maiduguri, where he obtained a Bachelor of Engineering degree in the same field.
Audu began his professional career at the Bornu State Ministry of Works and Housing in 1986, after the mandatory one-year national youth corps programme with WRECA in Kano. He worked with the ministry for 10 year, rising to the position of Principal Mechanical Engineer before leaving to join the then National Electric Power Authority as Manager (Mechanical) in 1996.
Audu knows the Kainji and Jebba dams as much as he knows the back of his palms. After undergoing series of trainings and attending various courses in reputable institutions including Accenture, he was promoted Senior Manager (Mechanical) at Kainji in 2002. In August, 2008, he was promoted Principal Manager (Turbine), a position he held for one year before being transferred to Jebba Hydro Power Plc on the position of Assistant General Manager (Maintenance) in October, 2009. He became Managing Director and Chief Executive Officer of the company in August, 2011, a position he held until the completion of the privatization exercise, when MESL acquired the assets of Kainji and Jebba and appointed him to his current position in October, 2013. There couldn’t be a more qualified person to run the largest hydropower stations in the country than one that grew in them.
The plethora of professional associations to which Audu belongs attests to his vast experience in the industry. He is a Fellow of the Nigerian Society of Engineers (FNSE); Fellow, International Hydro Association (FIHA); Member, Council for Regulation of Engineering in Nigeria (COREN) and Member, Nigerian Institute of Engineering Management (NIEM). Others are Member, Nigerian Institute of Mechanical Engineers; Member, World Energy Council (WEC) and Member, Financial Reporting Council of Nigeria (FRCN).
He has a string of honours which include Fellow, Institute for Research Leadership Training; Fellow, Institute of Credit Administration and Doctor of Science (Honoris Causa) from the Commonwealth University.