FG Okays N2.373trn For Power Sector Reform
The Federal Government has set aside the $6.15 billion (about N2.373 trillion) secured from the World Bank, the African Development Bank (AfDB), Siemens and others for the reformation of the power sector.
The Minister of Power, Sale Mamman, who made this known yesterday during his one year anniversary, said $6.150 billion had been secured for infrastructural development.
He said $2.3billion of the cash was for Siemens, $1.6billion for Transmission Rehabilitation and Expansion Programme (TREP), $1.7billion was for Distribution, $550 million for the Nigerian Electricity Project (NEP), and a rural electrification project being funded by the World Bank and the African Development Bank (AfDB)
The Electric Power Sector Reform Act of 2005 (EPSRA) unbundled the defunct Power Holding Company of Nigeria (PHCN), created 18 power utilities that were privatised except the Transmission Company of Nigeria (TCN). They consist of six Generation Companies (GenCos) and 11 Distribution Companies (DisCos).
Mamman said with the fund, the ministry has started implementing critical infrastructure to transform generation, transmission, and distribution of 25,000Mw of electricity by 2025.
He said the Siemens project would raise power to 7,000Mw in the first phase which just began, focusing on quick wins for TCN and DisCos. The expected projects under the Siemens deal include 105 substations rehabilitation, building 70 new substations, manufacturing and installing 35 power transformers and installation of 3,765 distribution transformers. There will also be over 5,000 kilometres of transmission lines to be constructed.
A statement from the Power Ministry explained that the objectives of the privatisation power sector remain largely a wishful thinking, the minister nonetheless expressed optimism of getting better result because the minister had a clear vision for the power sector.
The statement recalled that the minister started work with the visit of the 40 megawatts (Mw) Kashimbilla hydropower plant in Taraba State.
It said the minister’s five-point blueprint included closing the gap between the generation capacity and distribution as a means of reducing the losses with individual capacity as the sector was already contending with a huge loss of over N254 billion from unutilised power.
“Apart from the Siemens agreement which is expected to perfect this plan, the Ministry had already begun the effort of mitigating the problems by supporting the wheeling capacity of TCN to deliver power to the DisCos for optimum delivery to consumers.
“Just on August 18, 2020, TCN achieved an unprecedented peak distribution of 5,420Mw of power to the DisCos, being the third of such milestones,” it said, adding that it was coming as the ministry has attained a 24- hour transmission as against the previous miserly eight to 10 hours per day.
It said the minister had also focused on the achievement of market efficiency and transparency, stressing that working with the Nigerian Electricity Regulatory Commission (NERC), the Ministry of Finance and the Central Bank of Nigeria (CBN), the Ministry of Power intends to ensure fixed discipline and effective utilisation of sector loans, including the World Bank Partial Risk Guarantee (PRG) and the Payment Assurance Facility.
TCN, it said, is also implementing the $1.6billion TREP with funding from development partners like World Bank, AfDB, JICA. Key projects impacted include Alaoji-Onitsha and Kaduna-Kano power line, among others.
The minister further said he was working to complete these projects. The Zungeru Hydroelectric Power Plant worth $1.2billion will generate 700Mw; it is presently at 73per cent completion level.
The 3050Mw Mambilla hydropower project is expected to increase the national grid by 30 per cent. It is worth $5.7billion with 85per cent funding ($4.85billion) from China while the federal government is providing $850million funding.
The main construction works include four large dams: Nya, Sumsum, Nghu, and the API Weir dams in Taraba State; two units of 330 kilovolts (KV) power transmission line from Abong powerhouse to Makurdi and another from Abong powerhouse to Jalingo spanning over 700 kilometres.
The minister said the project’s scope has been reviewed, a pact signed with the state government on compensation and other issues; the land and aerial survey of the project site was renegotiated for N350million.
“The government has also finished the 40Mw Kashimbilla hydropower plant in Taraba. We are currently working on the development and expansion of transmission lines to evacuate the power from the project site to areas of distribution,” Mamman said.
There is also the 40Mw Dadin Kowa hydropower plant in Gombe State, while overhauling the 240Mw Afam Power Plant while support id being given to the development of 14 solar Independent Power Plants (IPPs).
Beside this, the minister said he was working to increase energy access for an estimated 80 million Nigerians that are without electricity access. Through the Rural Electrification Agency (REA), the minister is mapping unserved clusters to provide a digital database of the distribution grid system.
“We have secured $550million NEP (WB/AFDB) for off-grid electrification which is being using to power universities and rural areas.
“Access to electricity is improving through REA. As of 2019, we had 4million off-grid connections. We aim to add another 5million in the next 18 to 24 months under the recently approved Economic Sustainability Programme,” he was quoted to have said in the statement.