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GE and Niger Delta Power Holding Company (NDPHC) Successfully Restore up to 360MW in Nigeria Amidst COVID-19 Pandemic

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Electricity - Investors King

Power GE safely completed service interventions on three GE 9E gas turbines at the Niger Delta Power Holding Company (NDPHC) power plants in Calabar and Sapele, Nigeria; With compressive safety measures due to COVID-19 in place, GE and NDPHC quickly ensured both employee safety and on-time project execution; Outages were executed on time and the restored power will enable NDPHC to provide the equivalent electricity needed to power up to 2 million Nigerian homes.

GE (NYSE: GE) today announced the successful rehabilitation of three 9E.03 gas turbines, at three Niger Delta Power Holding Company’s (NDPHC) Power Plants in Calabar and Sapele, Nigeria. These operations reduced the risk of unplanned downtime of its power generation equipment, enabling the plants to reliably secure and restore the supply of up to 360 megawatts (MW) of electricity to the national grid, the equivalent electricity needed to power approximately two million Nigerian homes. Despite the challenges posed by the COVID-19 pandemic, GE and NDPHC worked together to swiftly implement safety procedures to ensure a safe and on-time execution.

“Being Nigeria’s largest electricity generating company, with a total installed capacity of 4.0 gigawatts (GW), representing about 35% of Nigeria’s generating capacity, we are committed to strengthening Nigeria’s power sector, despite the unexpected logistical challenges of the COVID-19 outbreak,” said Chiedu Ugbo, Managing Director, NDPHC. “GE’s efficiency to mobilize local teams on-site with the required technical skills and expertise, as well as GE’s global supply chain scale was crucial to ensure the timely and safe completion of the outages at the sites and help us achieve our goal.”

The outages involved stage three bucket changeouts on three 9E gas turbines as well as additional combustion inspections. Engineers from GE and FieldCore, the field services execution company owned by GE, worked together and in close collaboration with NDPHC to implement additional safety measures and reduce the risk of exposure to COVID-19, including frequent disinfections at the site, physical distancing, standard passive and active temperature screenings for personnel, and the use of personal protective equipment such as masks and gloves.

“We are committed to supporting power plant operators like NDPHC to be able to provide reliable power with exceptional support and services from GE throughout these uncertain times, while ensuring and maintaining the health and safety of our employees and suppliers.” said Elisee Sezan, CEO for GE’s Gas Power business in Sub-Saharan Africa. “The successful rehabilitation of the power generations assets at Calabar and Sapele plants will help increase the 9E gas turbines’ efficiency, while lowering emissions and providing essential power for industrialization, healthcare facilities, homes, schools and businesses.”

This year, GE’s 9E gas turbine fleet celebrates 40 years of operations globally. The 9E is a robust, proven platform that delivers high availability, reliability, and durability while lowering the overall cost-per-kilowatt. It has a large installed base of over 650 units in the world located primarily in Asia, China, Europe, Africa and the Middle East.

GE has been collaborating with energy stakeholders to deploy innovative technologies tailored to respond to the needs in the region since the 1950s with reliable baseload and flexible emergency power. In 2018, the company celebrated its 100th power plant in Sub-Saharan Africa and today, up to 17 GW of gas power generation on the grid runs on GE gas turbines. GE delivers across the entire energy ecosystem from generation to transmission and distribution and throughout Nigeria, GE-built technologies are supported by local service and maintenance teams from the company to ensure access to reliable and sustainable energy.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Economy

Nigeria’s Growth Forecast Lowered to 3% for 2025, Higher than Most Emerging Markets

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IMF global - Investors King

The International Monetary Fund (IMF) has projected a 3% growth rate for Nigeria in 2025, slightly down from the 3.1% forecasted for 2024.

Despite this slight decline, Nigeria’s projected growth remains higher than that of many emerging markets as detailed in the IMF’s latest World Economic Outlook released on Tuesday.

In comparison, South Africa’s economy is expected to grow by 1.2% in 2025, up from 0.9% this year. Brazil’s growth is projected at 2.4% from 2.1% in 2024, and Mexico’s growth forecast stands at 1.6% for 2025, down from 2.2% in 2024.

However, India is anticipated to see a robust growth of 6.5% in 2025, although this is slightly lower than the 7% forecast for 2024.

The IMF’s projections come as Nigeria undertakes significant monetary reforms. The Central Bank of Nigeria has been working on clearing the foreign exchange backlog, and the federal government recently removed petrol subsidies.

These reforms aim to stabilize the economy, but the country continues to grapple with high inflation and increasing poverty levels, which pose challenges to sustained economic growth.

Sub-Saharan Africa as a whole is expected to see an improvement in growth, with projections of 4.1% in 2025, up from 3.7% in 2024. This regional outlook indicates a modest recovery as economies adjust to global economic conditions.

The IMF report underscores the need for cautious monetary policy. It recommends that central banks in emerging markets avoid easing their monetary stances too early to manage inflation risks and sustain economic growth.

In cases where inflation risks have materialized, central banks are advised to remain open to further tightening of monetary policy.

“Central banks should refrain from easing too early and should be prepared for further tightening if necessary,” the report stated. “Where inflation data encouragingly signal a durable return to price stability, monetary policy easing should proceed gradually to allow for necessary fiscal consolidation.”

The IMF also highlighted the importance of avoiding fiscal slippages, noting that fiscal policies may need to be significantly tighter than previously anticipated in some countries to ensure economic stability.

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Nigeria’s Inflation Rises to 34.19% in June Amid Rising Costs

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Food Inflation - Investors King

Nigeria’s headline inflation rate surged to 34.19% in June 2024, a significant increase from the 33.95% recorded in May.

This rise highlights the continuing pressures on the nation’s economy as the cost of living continues to climb.

On a year-on-year basis, the June 2024 inflation rate was 11.40 percentage points higher than the 22.79% recorded in June 2023.

This substantial increase shows the persistent challenges faced by consumers and businesses alike in coping with escalating prices.

The month-on-month inflation rate for June 2024 was 2.31%, slightly up from 2.14% in May 2024. This indicates that the pace at which prices are rising continues to accelerate, compounding the economic strain on households and enterprises.

A closer examination of the divisional contributions to the inflation index reveals that food and non-alcoholic beverages were the primary drivers, contributing 17.71% to the year-on-year increase.

Housing, water, electricity, gas, and other fuels followed, adding 5.72% to the inflationary pressures.

Other significant contributors included clothing and footwear (2.62%), transport (2.23%), and furnishings, household equipment, and maintenance (1.72%).

Sectors such as education, health, and miscellaneous goods and services also played notable roles, contributing 1.35%, 1.03%, and 0.57% respectively.

The rural and urban inflation rates also exhibited marked increases. Urban inflation reached 36.55% in June 2024, a rise of 12.23 percentage points from the 24.33% recorded in June 2023.

On a month-on-month basis, urban inflation was 2.46% in June, slightly higher than the 2.35% in May 2024. The twelve-month average for urban inflation stood at 32.08%, up 9.70 percentage points from June 2023’s 22.38%.

Rural inflation was similarly impacted, with a year-on-year rate of 32.09% in June 2024, an increase of 10.71 percentage points from June 2023’s 21.37%.

The month-on-month rural inflation rate rose to 2.17% in June, up from 1.94% in May 2024. The twelve-month average for rural inflation reached 28.15%, compared to 20.76% in June 2023.

The rising inflation rates pose significant challenges for the Central Bank of Nigeria (CBN) as it grapples with balancing monetary policy to rein in inflation while supporting economic growth.

The ongoing pressures from high food prices and energy costs necessitate urgent policy interventions to stabilize the economy and protect the purchasing power of Nigerians.

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Inflation to Climb Again in June, but at a Reduced Pace, Predicts Meristem

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Nigeria's Inflation Rate - Investors King

As Nigeria awaits the release of the National Bureau of Statistics’ report on June 2024 inflation, economic analysts project that while inflation will continue its upward trajectory, the pace of increase will moderate.

This comes after inflation rose to a 28-year high of 33.95% in May, up from 33.69% in April.

Meristem, a leading financial services company, has forecasted that June’s headline inflation will rise to 34.01%, a slight increase from May’s figure.

The firm attributes this persistent inflationary pressure to ongoing structural challenges in agriculture, high transportation costs, and the continuous depreciation of the naira.

Experts have highlighted several factors contributing to the inflationary trend. Insecurity in food-producing regions and high transportation costs have disrupted supply chains, while the depreciation of the naira has increased importation costs.

In May, food inflation grew at a slower pace, reaching 40.66%, but challenges in the agricultural sector, such as the infestation of tomato leaves, have led to higher prices for staples like tomatoes and yams.

Meristem predicts that food inflation will persist in June, driven by these lingering challenges. Increased demand during the Eid-el-Kabir celebration and rising importation costs are also expected to keep food prices elevated.

Core inflation, which excludes volatile items like food and energy, was at 27.04% in May. Meristem projects it to rise to 27.30% in June.

The firm notes that higher transportation costs and the depreciation of the naira will continue to push core inflation up.

However, they also anticipate a month-on-month moderation in the core index due to a relatively stable naira exchange rate during June, compared to a more significant depreciation in May.

Cowry Assets Management Limited has projected an even higher headline inflation figure of 34.25% for June, citing similar concerns.

The firm notes that over the past year, food prices in Nigeria have soared due to supply chain disruptions, currency depreciation, and climate change impacts on agriculture.

This has made basic staples increasingly unaffordable for many Nigerians, stretching household budgets.

As inflation continues to rise, analysts believe the Central Bank of Nigeria (CBN) will likely hike the benchmark lending rate again.

The CBN’s Monetary Policy Committee (MPC) has raised the Monetary Policy Rate (MPR) by 650 basis points this year, bringing it to 26.25% as of May 2024.

At a recent BusinessDay CEO Forum, CBN Governor Dr. Olayemi Cardoso emphasized the MPC’s commitment to tackling inflation, stating that while the country needs growth, controlling inflation is paramount.

“The MPC is not oblivious to the fact that the country does need growth. If these hikes hadn’t been done at the time, the naira would have almost tipped over, so it helped to stabilize the naira. Interest rates are not set by the CBN governor but by the MPC committee composed of independent-minded people. These are people not given to emotion but to data. The MPC clarified that the major issue is taming inflation, and they would do what is necessary to tame it,” Cardoso said.

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