It bothered Wilbur Milhouse when the power would suddenly go out as he sat in restaurants or hotels in Nigeria.
?Power outages are commonplace,? said the founder and CEO of Milhouse Engineering and Construction. People are so used to them, he said, that they carry on conversations in the dark. So he decided to do something about it.
Milhouse?s nearly 14-year-old Chicago-based firm recently signed a memorandum of understanding with Nigeria and its Ministry of Power to create energy from coal.
The agreement, which is short of a formal contract, calls for mining high-quality coal on 20,000 acres in the country?s Enugu region and processing it into usable energy to create a total of up to 500 megawatts of energy over the next three years.
The project, Milhouse hopes, will help bring an economic revolution in Nigeria. The country is plagued by political unrest, slowing economic growth and fuel shortages. ?The average Nigerian is used to having power that is equivalent to having one light bulb (in the U.S.).?
Most Nigerian citizens rely on electricity from generators powered by expensive diesel fuel. But Milhouse is aiming to chip away at the problem and make some money while doing it.
The agreement, he says, is the start of a long-term strategy to reduce Nigeria?s reliance on expensive diesel fuel, which will improve the lives of its citizens and make the country ripe for investment. As part of the deal, the Nigerian government will buy electricity from Milhouse and distribute it through its electricity providers.
Milhouse doesn?t expect to single-handedly solve the West African country?s woes. Nigeria, with 173 million citizens living on land the size of Texas and Oklahoma combined, is battling a monthslong energy crisis, despite being Africa?s largest oil producer with vast reserves of natural gas. About two-thirds of the population, or 100 million citizens, have no access to electricity, according to a study by the World Bank.
Generating power with diesel is costly to citizens and the Nigerian economy, the study said. For example, the estimated energy bill for a 2,000-square-foot home using coal in the U.S. is about $300 per month. In Nigeria, using diesel fuel, it?s about $1,200 per month.
In the U.S., about 45 percent of power is generated by coal. In Nigeria, a nation with large coal deposits ? no power is generated by coal, Milhouse said.
So Milhouse, a civil engineer by training, has been traveling to Nigeria over the past year and a half to observe how they do business. He saw Nigeria as an untapped gold mine and figured he would start with what he knew: designing and building airport runways. When those ventures didn?t pan out, he turned to energy.
Doing business in Nigeria is a huge leap for his business and its 125 people, who are more used to working on airport runways, water waste systems and roadways. But where some see great challenges and opt to walk away, Milhouse said he sees great opportunity.
?In Nigeria, they may have a project they need done, but not necessarily the funds to do it,? he said, ?so they look for investors to come in.? Investing in power in a rapidly developing nation, he added, makes financial sense. That?s why he?s committed more than $1 million of his own money to get the project going.
Since the electricity grid infrastructure to provide power across the country is limited and unreliable, Milhouse plans to localize electricity production by using the mined coal to power 100 mini-power plants. These plants are smaller and cheaper to build and will supply energy where there is demand, generating up to 5 megawatts of power each. The project will cost more than $2 billion, Milhouse said. He?s getting started with about $50 million from loans, private investors and personal funds.
In the next six months, Milhouse is aiming to begin mining coal and have at least five of his mini-plants under construction, he said.
?Nigeria?s right at the cusp, they have a lot of needs and a lot of opportunities,? he said.