Julian Horn is the Group Head of Renewables at Savannah Energy, a London-based energy company. Recently, he had an exclusive chat with Yange Ikyaa in Cape Town, South Africa, where he spoke about his company’s expansion plans into Africa, as well as the potential projects that remain important to them in selected countries, and the obstacles being faced with 14 different projects in Nigeria. Excerpts:
Please, could you tell us what your company does?
Okay, Savannah Energy has oil and gas and renewable energy business in different countries, especially in Nigeria and Niger, where we have extreme gas and oil production. We are also in the midstream gas distribution business in Nigeria.
In Niger, we are about to produce oil in 2023 from newly discovered oil reserves in eastern Niger and we have signed a deal with external partners to buy their stakes, and that is for oil and gas. For renewables, we have signed an MoU with a wind farm in Niger and we have signed an MoU to do 500 megawatts in wind and solar in Chad.
In Nigeria, how closely are you looking at renewables?
So far, we don’t have any renewable activity in Nigeria but we are looking forward to that possibility.
There are quite brilliant opportunities when it comes to oil and gas in Nigeria, especially now that the country is looking at gas as a transition fuel and trying to gradually scale down oil use and focus more on cleaner fuels. So, are you looking forward to expanding your gas portfolio in Nigeria?
At the moment, our interest is much more in renewables and my mandate also is much more focused on the renewable side of the business, so I would be responding much more on renewables.
Okay, but apart from solar and wind, we have hydro, which is also part of renewables; so, where are you looking at in Nigeria with respect to that resource?
We are looking at West Africa in terms of renewables but there is nothing yet in terms of hydropower projects that we are working on.
Where is your company based?
We are a London-based company and we are listed on the London Stock Exchange, and we also have offices in Lagos, Nigeria, as well as in Niamey and Njamena.
How encouraging is the West African market to you generally?
I can talk about renewables in Nigeria, and I can tell you that there have been 14 MoUs (memoranda of understanding) or 14 PPAs (power purchase agreements) signed with several power sector players or utilities in Nigeria, but none of them has been built at the moment. They were signed in 2019 and none of them has yet been built.
Can you say that the Covid-19 pandemic caused some delays in the progress that should have been made on these projects in question?
Not at all. It has got nothing to do with that. The issue has been the lack of sovereign guarantees and that is the reason that none of these projects have progressed to the next phase.
So, where is the money for the execution of these renewable energy projects going to come from; is it FDIs or is the money coming internally from within Nigeria?
A lot of foreign banks are keen in renewable projects, so there is money available for the financing of these projects.
So, why can’t they guarantee?
The government is not willing to give the guarantees in Nigeria because of the perceived weight on sovereign debt obligations, so I think that the renewable energy companies must have to look out for alternative solutions to using a sovereign guarantee.
Now, are you going to get stuck with this or you are exploring some other avenues to navigate through this challenge?
I think, like I have realized, in Nigeria, the solution is to go straight to the customer and sell your power directly to the customer. That’s going to be the future of the renewable energy business at scale in the country.
Do you have any fears about doing business in Nigeria; are there any discouragements?
I can’t comment on that. Really, Nigeria is not my specialist country and I am still working on that, but it is exciting working in Nigeria and in Africa, and Nigeria is the most populous nation on the continent, so the opportunity is huge.
Also, today, there is zero utility-scale solar plant in Nigeria, so it is an opportunity for me as a businessman and also for my company. It’s a huge find. The market is there and it is just a matter of finding a way to make it work for the benefit of the people in terms of energy access.
Nice Speaking with you
Thank you very much.