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The company powering Garowe

Its the sole power company in the city

BY TSI TEAM

Garowe, the capital city of Puntland state in Somalia, is unlike most cities. Whereas most cities have their energy/ power needs addressed by the government or by several private power providers, Garowe has been powered for the past 12 years by one company; Nugaal Electric Company of Somalia (NESCOM).

Established in 2003, NESCOM formed a partnership with Puntland state administration to provide city power generation centers, power transmission and distribution infrastructure. To achieve this, the company has been generating 6MW from diesel generators at the cost of $0.95 per KW.

In the agreement signed by NESCOM and the state authority of Puntland, NESCOM is obligated to offer power to the prison department, Mosques, police stations, street lights, and health facilities.

On top of this, and not in the deal signed with the state authority, NESCOM Board Chairman Abdifatah Mohamed explains that they give 30% discount to any industrial set up during its first year in operation. Mohamed says that the set up stage for most industrial companies is the most costly in terms of energy consumption. Offering the firms a one year 30% off on their energy consumption is an incentive for them to stick around and for any other company that may want to venture in Puntland. Discounting as an incentive does not only apply to new industrial establishments, public institutions that consume high volume of electricity benefit too. There are challenges though, challenges that continue to affect the cost, production and distribution of electricity in the region, just like in other sections of Somalia. Abdifatah Mohamed says that the cost of power has remained high for some time now. A situation that he attributes to the unstable fuel prices in the global market, unregulated fuel imports that come into Somalia that may be of poor quality and the obvious limitation of technical knowhow that forces energy companies to hire experts (this raises operations cost, a cost that is transferred to the consumers). He adds that infrastructural challenges also continue to affect their business. Due to inefficient transmission channels, the company is experiencing 15% transmission loss rate compared to the global 12% maximum transmission loss rate. The company is currently in the process of including renewable energy to its grid- a hybrid system. The system will comprise of solar power generation plan (to generate 1MW) and wind turbines in 4 station each generating 250KW to generate 1KW in total. The solar phase is in its final stages and commissioning is expected by June.

In terms of operations, the company is reasonably efficient despite the fact that it does not use digital power meters and therefore use no information management systems for their billing and customer care services.

Already owning shares in Wamo Energy (a new power generating company in Kismayo) and in SABCO (another power generating firm in Bossaso) what Abdifatah needs are financial services from banks to finance some of its operations-like bulk fuel purchases, if the banks won’t do it, then individual investors can step in. With that done and a regulatory frame work in order, he believes that Puntland will be well taken care of power-wise.

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