TBY talks to Innocent O. Ezuma, Executive Chairman of Eta-Zuma Group (W/A) Limited, on its projects to reduce the country's energy deficit, diversifying into mining, and the opportunities in the steel sector.

Innocent O. Ezuma
Innocent O. Ezuma completed his primary and secondary education in Nigeria. He went to the USSR on scholarship, and was posted to the Republic of Ukraine in the Preparatory Faculty of Donetsk State University. He gained admission into the faculty of banking and acquired a master’s degree before becoming a research student of the Donetsk State University Faculty of Economics. He published five scientific works in economic journals and successfully defended his doctorate degree thesis “Nigeria on the world crude oil market.” Ezuma is fluent in English and Russian as well as several Nigerian languages.

Can you introduce us to Eta-Zuma's operations in Nigeria?

The Eta-Zuma Group is a group of seven companies engaged in the business of solid mineral development, steel production, power generation, and exploration and mining. Nigeria has huge gaps in these sectors, which we see not only as challenges, but as opportunities. Eta-Zuma seeks to fill these gaps.

One of President Buhari's main goals is to tackle the country's energy deficit. What role does Eta-Zuma play in supporting this objective?

One of our flagship projects is the development of a 1,200MW coal-fired power plant, for which the first phase of 300MW is already reaching the first stage of financial closure. After that we can start construction, which will take 30 months. We are also developing a 400MW gas-fired power generation plant in the southeast. For this project we have obtained all the permits and licenses, and will soon sign the gas purchase agreement to provide gas for this project.

In 1Q2016 Eta-Zuma signed a PPA with Nigeria Bulk Electricity Trading for USD12 billion; can you elaborate on that agreement?

The MoU involves the first phase of the project's 300MW, which is already at the advanced stage. We have signed a PPA and will conclude the financial close. The USD12 billion is for a 25-year purchase agreement, with a five-year provision for construction and 20 years for actual operations.

The government is eager to diversify the economy and solid minerals offer one area for potential. What investments is Eta-Zuma making in this sector?

We have invested in the exploration part of the business chain, which is critical for any mining. When starting the business we discovered that there was no equipment suitable for this purpose and invested heavily in equipment and created one of the best-equipped mobile exploration teams in the country, importing brand-new equipment such as drilling rigs and mobile operators and all the required geophysical equipment. At the moment we are exploring in Kogi State, we have also been in Sokoto State, and are exploring for gold in Zamfara State, where we have just acquired a gold mining lease. We also have another gold mining lease in Kogi State.

How would you describe the current state of the steel industry?

The steel industry is non-existent, which creates big opportunities. We have invested in the Steel Rolling Company, which was one of the previous government's assets, acquiring 100%. We are also involved in iron ore exploration so we could coproduce steel bars. The problem is that the process needs a great deal of power, and we lack power in Nigeria. The government could further support the sector by allowing only those companies that have invested in the sector to import steel. This would allow these companies to import and then sell that steel within the country and with the profits they generate from these activities they would be able to further invest in the development of the steel sector. We have the steel, the market, the people, and the raw materials; what we need is for the government to meet us half way.

How many people does Eta-Zuma currently employ?

At this time, we have less than 600 staff, because we employ many sub-contractors; however, we create jobs indirectly. Our vision is to harness the abundant human resources and mineral resources in Nigeria to power the country's economic growth. We outsource a great deal but empower SMEs so that we can concentrate on what we do best.

How would you describe the current business climate for foreign investors?

The current business climate in Nigeria is great. The only challenges are the infrastructure deficit and power generation. Any investor planning to come to Nigeria needs to understand that there are limitations in regards to infrastructure and their business model should contain some contingencies that address these shortcomings and allocate costs for providing a certain level of infrastructure that they need.