As Nigeria’s electricity challenges worsen, part of which recently manifested in the collapse of the national grid for the umpteenth time, causing widespread power outage across the country, strong indications emerged yesterday that the Central Bank of Nigeria (CBN) has commenced emergency funding of critical project that would address loopholes in the infrastructure linking the Transmission Company of Nigeria (TCN) with the nation’s eleven Distribution Companies (DisCos).
The project, which will strengthen the interface between the TCN and the DisCos, is expected to gulp about N104 billion and spread across critical locations in the country.
In similar vein, Minister of Power, Abubakar Aliyu yesterday said that the Federal Government was making efforts to add 2,550 megawatts of electricity to the national grid.
Recall that the nation’s electricity grid system experienced two grid collapses within 48 hours last week as the system lost about 1,100MW generation capacity.
Aliyu disclosed that the gas pipeline affected by acts of vandalism had been restored and that the Okpai power plant had resumed generation and was currently contributing an average of 300MW to the grid. He added that the development last week was exacerbated by the ongoing water management regime at the Kainji, Jebba and Shiroro power plants.
According to Aliyu, the Nigerian Bulk Electricity Trading Plc had been directed to enter into fast-track negotiation with Agip on an interim energy sales agreement with a view to bringing the new Okpai Il power plant on the grid, thereby contributing an additional 400MW of generation capacity.
“The “pigging” of the gas pipeline supplying gas to the Odukpani power plant is scheduled for completion tomorrow thus ramping up generation by about 400MW.
“In order to optimise the capacity utilisation of the power plants owned by the Niger Delta Power Holding Company Ltd (NDPHC), the Nigerian Electricity Regulatory Commission (NERC) has approved a special gas pricing for emergency contracting of gas from the Nigerian Gas Marketing Company Ltd. We expect an on-grid improvement of about 800MW generation capacity from the NDPHC plants too,” the Power Minister said.
Aliyu also reveled that government had, in the medium-term, agreed with Nigerian Gas and Power Investment Company Limited (NGPIC), a subsidiary of NNPC, on the framework for the overhaul of the Okoloma gas processing plant thereby restoring the full capacity of the 650MW Afam VI combined cycle power plant.
He noted that the recent spate of system collapse was regrettable, saying that it was a direct consequence of a snap on a 330KV transmission line. He added that the mitigation measures for avoiding such incidence of blackouts were being implemented through several interventions including the Presidential Power Initiative.
Reacting to the CBN’s move to inject funds to improve transmission infrastructure, stakeholders in the sector are however divided, insisting that although interventions, such as the alignment of the interface between TCN and DisCos remained critical, it was high time government ensured that the sector operated optimally without support.
Some experts also noted bureaucratic challenges in the efforts as others called for the strengthening of governance structure, accountability, strict monitoring and improvement in revenue collection, adding that there was need for the sector to finance itself.
Recall that the power sector was privatised in 2013 to ensure that power supply to homes and industries improved while boosting the economy and reducing government involvement in the sector, especially in terms of funding. But the sector has remained epileptic with supply currently hovering around 2000 megawatts.
Aliyu stated that the CBN was already funding a $250 million project to ensure the rehabilitation of critical interface infrastructure between Transmission and Distribution Companies to increase and stabilise power delivery. This, according to him, is in addition to the Siemens Presidential Power Initiative (PPI) that will bring in additional $2 billion or more to the Transmission Grid from the government.
According to him, the interface projects, along with others already being embarked upon by TCN, bring ongoing projects in the transmission segment alone to 135 ongoing projects with 30 completed key Substation Projects and 12 transmission Lines.
The Managing Director and Chief Executive Officer of Nigerian Bulk Electricity Trading Company (NBET), Dr. Nnaemeka Eweluka, disclosed that the apex bank was able to identify critical projects that could quickly address and restore normalcy.
An energy expert, Bode Fadipe, stated that one of the fundamental issues in the power sector included poor liquidity, adding that whilst it is true that one of the expectations of the privatisation programme was for the sector to self-fund itself, the benchmark was yet to be realised.
“It is in direct response to this liquidity challenge that the CBN was brought into the loop. There is therefore sense in the involvement of the CBN in the interface projects between DisCo and TCN,” Fadipe said.
According to him, the gains of the DisCo/TCN funded interface project are huge as it would help to bring more load into the grid and by so doing, more people will be able to receive electricity for their use.
Fadipe stated that quality of supply is also expected to increase because in some locations where the transformers are overloaded, they would be upgraded.
An energy expert who is a key investor in the DisCos but who pleaded anonymity, told journalists that the intervention in the interface project showed the obvious gap that have been neglected over the years by the current administration.
Insisting that the intervention was critical and required sustainable approach, possibly on a yearly basis, he noted that the development was, however, not devoid of bureaucratic challenges associated with the government.
A consumer advocate and legal expert, Kunle Olubiyo, noted that though critical, the continuous intervention showed that the essence of privatising the sector has been defeated.
Olubiyo noted that poor governance system, lack of monitoring, accountability and weak set up of the market were responsible for the financial issues in the sector.
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