In this interview with NDUBUISI MICHEAL OBINEME of Oil and Gas Republic, the new Consul General of Germany in Lagos, DR. STEFAN TRAUMANN, speaks on the current trends in Germany’s energy sector and how the German government is supporting renewable energy development in Nigeria through various initiatives.
I have been here for 6 months. Lagos is a mega city of about 20 million people. Traffic is another challenge in Lagos and sometimes it is very complicated.
For me, it is amazing to see the energy of the people with a business creative mindset such as startups, young artists and much more.
I would say in Lagos, there is never a dull moment as events always happen all the time. And, I am looking forward to working here in the coming years in this big city of Lagos.
I have served in Brazil before I came to Lagos. I was Consul General there in the city of Porto Rico, Southern Brazil, with a huge European influence and we have immigration especially from Germany. It was really interesting working there to build relation not only on Consular services but also supporting science and economic cooperation.
30 years ago, I started my career in Germany as a diplomat and my academic background are African studies. And, the first country I served abroad was Cameroon.
I was posted back to Bonn and later in Berlin. But, abroad, I was posted twice in United States in Washington DC and Miami, and in South Korea, Israel and now in Africa again.
The debate in our energy sector centers around the completion of the goals set by the German government in the so called “energy transition” (Energiewende). It was initiated after the catastrophe in Fukushima.
Fukushima was one thing to move away from the nuclear energy and also fossil fuels because of climate change.
We are in the process of overhauling Germany’s energy supply, moving away from nuclear and fossil fuels towards renewables and better energy efficiency.
We have already achieved quite a lot, with almost one third of our electricity coming from wind, solar, biomass and hydropower. Renewable energy is a very important component of our electricity supply.
Germany is not only increasing the share of green energy in its supply. We are also using energy more economically. Primary energy consumption has been cut significantly in recent years in Germany – by 7.6 percent 2008 and 2015.
The success of the energy transition will also much depend on our ability to expand the large supra-regional transmission grids and also local distribution grids. This work to expand the grids must go hand in hand with efforts to step up demand-side management and to render conventional power plants more flexible. Introducing smart meters will help us digitize the energy transition to better balance supply and demand and to harness the potential for energy efficiency.
We have achieved a lot. But we are still in a substantial discussion on transmission grids, because we are depending on Wind Power as one of main sources of renewable energy, and, wind energy is available throughout the country but mostly nearby the sea in the north and many of Germany’s industrial clusters are located in the west, south west and south of the country.
Therefore we have to extend the transmission grids and naturally there is a discussion about it first due to the environmental impact and second because nobody wants a big transmission line to be installed on his backyard. But, we will find solutions for this.
Another big challenge is battery cell manufacturing not only for e-cars but also for the storage of energy. It is a factor especially for wind and solar energies because it is not available at the same level 24 hours, 7 days a week.
For energy transition targets, 40-45 percent share of renewables to be reached in our power consumption by 2025. While, in 2022, the remaining nuclear power plants are to shut down.
And, 40 percent amount by which greenhouse gas emissions are to be reached by 2020 (from 1990 levels).
We are looking forward to continue our good relations on international issues and also cooperation in number of areas such as the Binational commission and we still have many visits of German officials in Nigeria and vice versa.
Last year in August, German Chancellor Dr. Angela Merkel visited Nigeria. She was accompanied by a high level business delegation. Later that year the Vice President of Nigeria, Prof. Yemi Osibanjo, travelled to Germany. We hope to continue working with the new government in place after the election.
We are also looking forward to continue the successful cooperation in a number of areas such as security, fight against terrorism, and stability of Lake Chad region.
Last year, we had a Chad Lake conference in Berlin which brought together the countries from the Lake Chad region. And, we discussed how we will continue to assist in fighting terrorism, and developing the region.
About 90 German companies are present in Nigeria and seek to increase their businesses in and with Nigeria. Germany supports those initiatives in order to reach mutual benefit.
In 2016 the amount of German FDI in Nigeria was 183 million EUR, compared to 140 million EUR in 2015. Trade volume in 2017 reached 2.53 billion Euros.
But I see a lot more potential for trade and investment if favorable conditions are met.
Development cooperation is also one of the pillars of our cooperation here and it will be part of my focuses in the next couple of years especially in the field of vocational training.
If you look at demographic statistics technical and vocational training becomes increasingly a factor for developing the economy of this country. We are already supporting it with several programs and will continue to do so in my opinion, education is crucial for the Nigerian youth, and vocational training is an important part of it.
We have the framework of the Nigerian-German Energy Partnership (NGEP), founded and enacted on 19th August 2008 with an MOU signed. From the German side, it is mostly private sector driven. As a government, it is part of our economical and development cooperation.
We will continue to cooperate in this field, most prominently under the framework of the Nigerian-German Energy Partnership (NGEP).
From the Nigerian side, the partnership falls within the ambit of the Ministry of Power and the National Energy Council. Since 2012, both our governments discuss topics related to the NGEP on the occasion of the Binational working group on energy issues. The recent meeting took place in the beginning of the year in Abuja and our state secretary was there.
The idea behind the NGEP is the complementarity of interests and potentials of both Nigeria and Germany. Germany improves Nigeria’s energy supply through know-how and innovative technologies, especially in the field of renewables and energy efficiency. In return, Nigeria contributes to Germany’s energy supply in the oil and gas industry. The dynamic development in the areas of electricity, oil and gas offers interesting business opportunities for German investors. Examples of completed cooperation under the NGEP include;
Apart from that, the project implemented by GIZ called “Nigerian Energy Support Programme” closely coordinates with the activities of the NGEP. It is aimed at ensuring better access to reliable and sustainable energy. The programme builds upon an initial five year phase from 2013-2018, during which it supported activities geared towards the improvement of access to and investments in Renewable Energy (RE) and Energy Efficiency (EE). The second part of the programme, NESP II, implements a multi-level approach by combining advisory on energy policy/economy and technical knowledge for a wide range of stakeholders.
Lastly, the Delegation of German Industry and Commerce (AHK) here in Lagos has been an essential partner in promoting bilateral trade and in particular in organizing events, market exploration trips, seminars to bring German investors to the Nigerian energy sector.
It is already a success story that we have been able to organize an average of three seminars in Lagos and in Abuja each year since 2014. The interest does not seem to be decreasing since we have an average of 50 to 80 participants each time.
I think is very important here in Nigeria to show that renewable energy is really a success story not only in Germany as it could also be in Nigeria. We are talking about power and energy which is really a big factor and if there is lack of power and energy supply, you have to find alternatives especially when you look at off-grid solutions. I think in Nigeria, many industry experts say solar energy would be natural solution for that rather than burning more generators and buying diesels. The mindset has to change.
In Germany, in the beginning the people were hesitant that it is very expensive and not affordable but it changed overall. And, today the approach is totally different. We need to change this mindset here in Nigeria and also we can offer technical solutions in different levels.
I think the success of these seminars is that it was probably in the beginning one of the few platforms where very diverse stakeholders (press, experts, business community, civil society but also government officials) were able to exchange views about innovative topics such as energy efficiency, renewables etc. It gives stakeholders the occasion to exchange about challenges and also to create awareness. For the German private sector, it creates an opportunity to explore the Nigerian energy market.
The Delegation of German Industry and Commerce will know more about the details but there have been valuable business contacts that have been established, both for the Nigerian but also the German side. The current partnership trend between both countries is on Photovoltaic panels.
There are so many. As I said before, both countries are big economies with so much to offer each other. It is no secret that Nigeria is a country of many opportunities. Together with South Africa, Nigeria is Germany’s largest trading partner in Sub-Saharan in Africa.
We see a lot of cooperation projects from Germany to Nigerian companies and lots of interests in Germany.
The most advanced business relations are in the field of finances (Deutsche Bank, Commerzbank, chemical industry (BASF, Bayer) and energy (Siemens) but other new sectors are explored as well: Launch of Allianz Group in Nigeria in the insurance market.
And, there is an increasing interest of small and medium size businesses which are – often as “hidden champions”- the backbone of Germany’s economy.
The most important thing is setting up the right legal framework and infrastructure.
Another issue is image building. It is very important because People very often don’t see the positive things about Nigeria.
Whenever we had and have delegations and business people come to Nigeria, they are surprised to find so many positive things. It is usually not easy to convince them to travel to Nigeria at first but with their personal experience of the trip most of them say we will be back
Third: Recently, I attended the German-African Business summit in Accra, Ghana. This was the third summit where German and Sub-Saharan Africa businesses meet attracting over 600 participants. I think 70 percent of the participants were from Ghana and Nigeria. During the conference Ghana was often highlighted as a positive example and target for cooperation and not Nigeria. Why? Because Ghana – for instance – takes part in the G20 “Compact with Africa” -initiative and Nigeria does not because the government chooses not to participate. In addition we signed European Partnership Agreements with couple of African countries to facilitate trade, investment and other cooperation. Unfortunately, Nigeria hasn’t signed the APA agreement yet.
We have noted that progress has already been made by bodies like PEBEC.
Enhanced economic climate after the recession Nigeria went through.
Nigeria made profound improvements in the field of ease doing business.
Nigeria moved up 24 points in the World Bank Ease of Doing Business index and was therefore among the 10 economies which improved the most.
Nevertheless there are things that still need to be addressed: legal security, custom valuation, speediness at port clearance to name but a few.
The 13th German-African Energy Forum focuses on the financing of energy projects on the African continent. The 2 day Africa energy dedicated conference will in addition to new financing opportunities within the context of the G20 Compact with Africa, feature innovative approaches for financing off-grid projects and financing partnerships, feature digitalization in the energy sector, renewable energies technologies such as hydropower and hybrid systems, and the thermal recycling of waste.
The program highlights include among others:
The organizer of this event is mainly the Afrika-Verein der deutschen Wirtschaft.
Awareness has been created via local media and cooperation partners who include the Delegation of German Industry and Commerce, Nigeria.
Online ads, one-on-one information sharing with relevant stakeholders in the industry, regular email blast and follow-up calls with interested participants are some of the avenues that have been employed.
About 200 carefully selected public institutions, indigenous and international private companies with physical presence in the country have been duly contacted by AHK Nigeria.
Queries about business partners, cooperation and joint ventures can always be addressed to the Delegation of German industry and Commerce in Nigeria.
With our activities underneath the roof of the NGEP and with programmes run by the GIZ such as the “Nigerian Energy Support Programme”.
My advice to companies from both countries would be simply to seek opportunities and keep your efforts high even when times get a little rougher. And, you have to find the right partner, that’s very important.
I have witnessed already several great success stories of companies that prove that the effort is worth it.
There is already the very active Delegation of German Industry and Commerce (AHK) here in Lagos with its Delegate Dr. Marc Lucassen which has been an essential partner in promoting bilateral trade and in particular in organising events.
In the business field we do most of our work in strong cooperation with our implementing partner, the Delegation of German industry and Commerce (AHK).
The delegation functions as a first point of contact if interested companies from both Nigeria and Germany that either want to use one of the services that the delegation has to offer or that want to establish contacts with potential business partners.
Services range from market information, market entry strategies up to the connection of legal experts who can provide basic information on relevant matters.
I think publicizing information will help a lot. Inform the audience about the potential and – if you have the opportunity to travel to Germany – advertise Nigeria, show the opportunities but don’t hide the challenges.
Been here 6 months, Lagos has kept me busy so far. Therefore I was only travelling to Abuja to formally introduce myself to the foreign affairs ministry and meet with our Ambassador and the Embassy staff and to Ile Ife to visit the Obafemi Awolowo University. But I am planning to discover much more in the years to come.