SkyPower Global and FAS Energy to build 3,000 MW of solar power in Nigeria
Nigeria is set to benefit from a plant to develop 3,000 megawatts (MW) of utility-scale photovoltaic (PV) projects after signing agreements with joint venture company Skypower FAS Energy.
Both the Federal Republic of Nigeria Government and the Delta State of Nigeria Government have signed foundational agreements with the joint venture company which will result in production of clean, sustainable, cost-effective energy to support Nigeria’s needs.
SkyPower, a world leader in delivering solar power projects, and FAS Energy will work closely with both governments for the planning, financing, and construction of 3,000 MW of utility-scale solar PV energy projects for the Nigerian power grid.
They are expected to reach commercial operation in phases starting in 2015.
The agreements were signed at the World Economic Forum on Africa during a historic ceremony for a Foreign Investment Promotion and Protection Agreement (FIPA) between the Canadian and Nigerian governments.
Representing the nations at the forum were the Honourable Olusegun Olutoyin Aganga, Minister of Trade and Investment for the Federal Republic of Nigeria and the Honourable Christian Paradis, Minister of International Development for Canada.
Kerry Adler, President and Chief Executive Officer of SkyPower Global, said: “This is truly a proud moment for SkyPower FAS Energy. Global partnerships such as these are key to bringing together extensive expertise from around the world.
“The signing of these landmark agreements demonstrates the shared vision of a partnership that will further stimulate the vibrant, fast-growing Nigerian economy and substantially impact the state and country’s GDPs, resulting in increased employment and skills training.
“We applaud the leadership of the Delta State and Federal Nigerian governments for embracing this initiative and demonstrating their continued commitment to reduce carbon emissions and harness the proven power of solar PV.”
Permanent Secretary, Federal Ministry of Power, Ambassador (Doctor) Godknows Boladei Igali, said: “The Nigerian Government is pleased to partner with SkyPower FAS Energy and we look forward to creating more power and more jobs for the people of Nigeria.
“Foreign investment in Nigeria helps build the economy and strengthen international ties with a well-respected and viable partner such as SkyPower FAS Energy.”
Doctor Emmanuel Eweta Uduaghan, Governor, Delta State of Nigeria, said: “Delta State is pleased to sign this agreement with the world’s largest solar developer, SkyPower FAS Energy.
“It represents a continued effort to provide even more clean and renewable energy that can be sustained for decades to come. Delta State: Beyond oil into solar.”
Billionaire Kumar Birla Champions Regional Supply Chains
As the head of the Aditya Birla Group, a US$46bn firm that operates in 36 countries, Kumar Mangalam Birla is no stranger to splashy strategic moves. Yet his recent announcement that he no longer wants to acquire globally distributed supply chains stood out. While many companies have struggled to cope with shipping backlogs, his firm has chosen to pivot and focus on regional networks. Said Birla: ‘We wouldn’t look at a company or a business where you source in one corner of the world and sell in another’.
He cited protectionism, the pandemic, and the limited movement of products and people around the world as ABG’s primary causes of lost profits. And they aren’t alone. Over the past year, 900 of the U.S. and Europe’s biggest IT, defence, and financial services firms have lost an average of US$184mn apiece.
An Era of Global Disruption
Over the past few decades, low shipping rates and rapid delivery times have lulled multinational firms into a false sense of security. In the early 2000s, companies chose to take on significant global supply chain risks in exchange for increased profits. First, it made sense to manufacture higher-value goods, such as electronics, in low-cost regions throughout Southeast Asia, India, and Africa. Second, first-tier suppliers started to outsource the manufacturing of specific components to second-, third-, and even fourth-tiers—leaving supply chains with extremely limited visibility.
So when COVID-19 disruptions struck certain regions, companies were caught unprepared. Usually, these events come few and far between. But over the past ten years, we’ve seen a number of ‘black swan’ events that have thrown the supply chain industry into chaos. Here’s a quick history of the most significant events in recent years, thanks to the MIT Sloan Management Review:
- 2010. China creates export quotas for rare earth elements.
- 2011. The Tōhoku Earthquake hits East Japan; flooding sweeps throughout Thailand.
- 2016-present. Trade wars between the U.S. and China hurt suppliers.
- 2020-present. COVID-19 pandemic shuts down international shipping ports.
Now, Kumar Birla is one of many who want to re-evaluate how we run our supply chains. Though his company has acquired 40+ companies in the last quarter decade, Birla intends to build up local hubs rather than expand operations.
Why Pursue Regionalisation?
Combine Chinese economic dominance, global supply chain vulnerabilities, and major government policy shifts around the world, and you have a storm brewing on the horizon for big multinational firms. As Brookings noted, ‘the biggest risk for trading opportunities in the developing world is growing protectionism in more advanced economies, often dressed up as national security protection’.
Altogether, from the U.S. to the European Union, governments are trying to protect their domestic supply chains, secure adequate stockpiles of materials, and build world-class local networks. Consider Biden’s recent executive order, which seeks to bring semiconductor manufacturing back to home soil, or Japan’s bid to open more memory chip fabrication factories near Tokyo. The Aditya Birla Group intends to react in kind. Said Birla: ‘We’re looking at regionalism as a very big theme’.
Will Others Follow Suit?
In the post-pandemic economy, global businesses must decide whether to expand or contract. On one hand, the Alibaba Group’s Cainiao Smart Logistics Network recently launched a direct flight between Hong Kong, China, and Lagos, Nigeria. On the other, the Japanese government is desperate to make its chip manufacturing domestic. Indeed, as two supply chain strategies diverge in a post-pandemic world, the one businesses take may make all the difference.
Yet Birla is confident that regionalisation is the right call. According to his words at the Qatar Economic Forum, even necessary cross-border transactions should be smaller in scope. And as the Bloomberg Billionaires Index now lists his net wealth at US$10.4bn, up 52% from 2020, he may have the cash to test his theories out. ‘Regional hubs, regional presence, regional employment, catering to regional demand’, he stated. ‘We’re a global company rooted in local economics’.