Senate to probe power sector under Obasanjo, Jonathan

The Senate on Thursday set up a 13-member Ad-Hoc Committee to carry out a comprehensive investigation into the management of funds so far appropriated for the power sector since 1999.

Jonathan, Obasanjo, Babangida, Buhari

The Committee, headed by Senator Abubakar Kyari, was also given the task of probing the unbundling of the defunct Power Holding Company of Nigeria by the Federal Government.

The Upper Chamber took the decision while passing a motion sponsored by the Senate Leader, Ali Ndume, seeking the immediate reconnection of some parts of Borno State back to the national grid in view of the challenges the blackout was posing to his constituents.

The Senate urged the Federal Government to complete the Mambilla Power Project with the aim of improving electricity supply in the country.

It also called on President Muhammadu Buhari to direct the Transmission Company of Nigeria to immediately reconnect Maiduguri to the national grid.

It also directed the committee to conclude its investigations and report to the Senate within two weeks.

The senators, while contributing to the debate, also condemned the inability of the TCN to provide uninterrupted power supply to all parts of the country.

Ndume had expressed concern that Nigeria, with a population of over 150 million, produced only 4,600 megawatts, while South Africa with a population of about 40 million people produced 40,000 megawatts.

He observed that the disconnection of Maiduguri , the Borno State capital, from the national grid, as well as the degeneration of power supply across the country had affected the economy negatively.

Ndume also expressed concern that with an installed power generation potential of about 5,000 megawatts, the output distributed currently was about 1,950 megawatts.

He added that it was disheartening to note that Iran with over 77 million people “generates about 42,000 megawatts, while South Korea with over 49 million people generates about 60,000 megawatts of electricity.”

Ndume, who said that Maiduguri and its environs had been completely disconnected since the emergence of insurgency, complained that the situation had grounded economic activities in the state.

He said, “I buy diesel to run my generator and that costs me N10, 000 per day. No country can be said to be near development when there is no power.

“This Senate needs to investigate this to give the government support. For some years now, a lot of money has been spent but there is nothing to show for it.”

Senator Danjuma Goje in his contribution said that the motion was apt in view of the untold suffering that lack of power supply had caused Nigerians.

Senator Godswill Akpabio lamented that many companies had shut down operation due to irregular power supply in the country.

He lamented that in spite of the financial contribution by some states in the South to improve power supply, Nigerians were still grappling with lack of electricity supply.

He said, “In 2015, we are celebrating 4,000 megawatts, for me this is worrisome. We cannot have employment without power and Nigerians are complaining about the high cost and some localities which have not seen light for months are asked to pay high tariff.”

Senate President, Bukola Saraki, noted that the inadequate power supply in the country was a cause for concern, saying it had affected the economic growth of the nation.

He observed that the lack of power supply had plunged the country into further hardship, besides corruption.

He said, “We thought that with the Power Reform Act and the unbundling of the Power Holding Company of Nigeria, we will begin to see improvement with regard to power supply; unfortunately, it is not so.

“The Ad Hoc Committee that we set up should look at the activities of the Discos and what is preventing Nigerians from benefitting from the unbundling of the PHCN.”

Senate to probe power sector under Obasanjo, Jonathan

Power Sector Development: Wakil signs MOU with American investors

The Minister of State for Power, Muhammad Wakil has signed a Memorandum of Understanding (MoU) with a five-man partner of American Investors led by Roy Yeferez in Abuja to fast track the realization of gas-fired power plant project.

Speaking at the occasion, the Minister of State described the event as a happy moment since coming on board as a member of the Federal Executive Council. He said that he has been able to accomplish President Jonathan’s directive on Ministers to serve as

ambassadors for investment. He also commended the determination and doggedness of Team Africa and its associate, Yeffet Mesika Group for making it possible for the effort to have advanced that far.

“Team Africa is known to talk less but more of action. Their belief in our nation’s potentials has underscored the reliability of Team Africa to deliver on the proposed power project. The Ministry has had an arrangement with the Bayelsa State Government where the proposed plant will be located. The plant also has ancillary transmission line facilities that will make up the turkey project,” he observed.

According to Wakil, with the realization of the project, the attainment of Government’s target for greater access by Nigerians to quality electricity will be achieved in no distant future.

While performing the symbolic ritual of MoU signing, the Director of Legal Services, Adetutu Soetan said that the detailed proposal for the project is to be supplied by Messrs. Yeffet Mesika, adding that other activities by the visiting team includes acquiring the project site as well as discussing with the relevant / regulatory agencies that are meant to facilitate the execution of the project.

On the funding arrangement, the Legal Adviser informed that it would be funded wholly by the Americans, who are also to provide the technical competencies for it. He called on the investors to ensure that indigenous engineers understudy the

project execution to ensure availability of the necessary skills to operate the plant on completion.

Earlier, the leader of the delegation, Ron Yeferez described Team Africa’s signing of the MoU with Nigeria as germane to the corporate style of his group. “The MoU is the

foundation for the development of some power projects and transmission lines.  What could have taken 2-3 years to accomplish was accomplished within 2 weeks,” he iterated. He also promised to contribute positively to the attainment of uninterrupted power supply to Nigerian homes and industries.

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Power Sector Development: Wakil signs MOU with American investors

Power sector collapse: Banks cry out over fate of investments

LAGOS—Nigerian banks have expressed concern over the possibility of losing about N1 trillion they invested in the acquisition of the privatized assets of the Power Holding Company of Nigeria, PHCN.

transformer

The banks are expressing fears that they may be unable to recoup their investment following the myriad of problems facing the sector.

Group Managing Director/Chief Executive Officer, Diamond Bank Plc, Dr. Alex Otti, had at a power investors’ forum in Abuja, said that as at 2013, the banking industry has invested well over N750 billion in the power sector and are ready to do more.

To this end, the banks are calling for an increase in electricity tariff and in the price of gas, saying this will help boost the revenue profile of the power companies and their ability to repay their debts.

Some of the chief executives of banks, who spoke at the just concluded Seventh Lagos Economic Summit, tagged Ehingbeti 2014, complained of the revenue profile of the recently privatised power companies, saying  it is not meeting the expectation of investors.

 

Power sector collapse: Banks cry out over fate of investments

Power Sector Reform: Electricity mess persists as consumers lament extortion

Unlike previous governments without genuine, determined efforts to solve the age-long electricity crisis which had plagued the country, the current administration of President Goodluck Jonathan seemed to have taken the bull by the horns with his transformation agenda including the roadmap on power that guaranteed massive access to electricity.

With a fast growing economy and dynamic population of over 167 million people, demand for electric power has out-spaced supply tremendously. The sincerity of the administration in privatising the power sector is not in doubt because in the last two or three years, a well thought-out power sector reform is being implemented almost to the letter especially with the unbundling of the octopus – the Power Handling Company of Nigeria, PHCN into separate generation, transmission and distribution successor companies

Undoubtedly, the power sector is capital intensive, needing huge financial and technical resources to turn the sector around from the country’s dire electricity shortage and the dismal, unacceptable situation, which had seriously retarded national progress and undermined socio-economic development of Africa’s most populous nation.

The power sector reform anchored on wholesale privatisation saw PHCN assets sand liabilities effectively transferred, funded to a considerable extent by indigenous financial institutions that provided over $3.4 billion.

Recently, a power financing conference was held in Abuja where potential investors met with business owners and regulatory decision makers to comprehend the magnitude of emerging opportunities in the Nigerian power sector.

Tagged as Nigeria Power Sector Investors Conference convened by the Federal Government, it was meant to showcase the new successor power companies and the Transmission Company of Nigeria, TCN, with a view to matching them with credible investors. About 400 foreign and local investors were at the conference.

The Federal Government explained that the power sector requires about $10 billion in the next five years in order to provide additional 5,000 MW to the national grid. For this purpose, a Power Sector Intervention Fund, PSIF, has been established of which an initial deposit of $300 million made to enable interest players in the electricity industry to access cheap long term funds.

Represented by the Vice President, Muhammed Namadi Sambo at the investors conference, President Jonathan said that the special fund will be contributed by the Federal Government, Development Financial Institutions, DFIs, as well as local, global and financial partners.

According to him, in order to meet our strategic national economic growth and developmental goals as contained in the Vision 20: 2020 and the Transformation Agenda, there is need to take decisive and courageous measure to work towards a 40,000 MW target in the years ahead. This informed the decision to reform and privatise the power sector. Investors were told that the transmission network requires an annual investment of about $1.5 billion for the next five years to ensure its reliability and stability.

It was pointed out that the Transmission Company of Nigeria, TCN, has commenced aggressive implementation of the expansion blueprint funded by a mix of appropriation and funds from financial and multilateral institutions. He paid tribute to the dynamism of the Nigerian private sector that ensured the raising of over US $2.5 billion for the successful conclusion of the power sector divestment process, saying that the private sector is better suited to effectively manage and attract the huge capital required for constant and affordable power to all Nigerians.

Those who made presentations at the conference included Dr. Ngozi Okonjo-Iweala, the Minister of Finance and Co-ordinating Minister of the Economy, Minister of Trade, Industry and Investment; Mr. Olusegun Aganga, the Minister of Power, Prof. Chinedu Nebo; Governor of Kogi State, Capt. (rtd) Idris Wada who talked about opportunities in Kogi with Lokoja as the confluence of two major rivers – Benue and Niger for hydro-electricity, abundance of coal and that investors are welcomed, assuring of security.

A representative of the banking institutions disclosed that N750 billion had been provided by banks in the country and more would be given to support the power reform.

A top official of the US government in Washington – an Assistant secretary in the Power Regulatory Department assured support of the Obama administration and a bright future for electricity markets in emerging countries where progress has been made so far and distribution is essential. He said that the world looks up to Nigeria to have a strong regulatory system partnering with US regulatory system.

A representative of NNPC assured power investors at the conference of availability of gas required for the generation process.

Saturday Vanguard can reliably reveal that $11.7 billion will be required by the generation companies. Also $1.5 billion will be required yearly for the next five years to meet gas challenges in the power sector, making a total of $7.5 billion for gas infrastructure.

The Transmission Company of Nigeria requires about $4.4billion to increase power transfer capacity, make the network more stable and reliable, improve efficiency of electric power transfer by reducing transmission technical losses and enable TCN to increase transmission capacity to 16843 MW by end of 2018. TCN is the transmission service provider.

Meanwhile, the Nigerian Electricity Regulatory Commission, NERC, chaired by Dr. Sam Amadi is worried by rising cases of high bills given to consumers. At a recent power sector consultative forum with civil society organizations, Amadi said NERC will ensure that the rules of engagement are followed in the new electricity supply arrangement in the country. He demanded for metering plans from the distribution companies who have duty to meter consumers. They are to do this as part of their operations. But if they cannot do that immediately, he advised they can adopt the Credit Advance Payment for Meter Installation, CAPMI, as alternative for consumers who are willing to advance money to their distribution companies for speedy installation of prepayment meter.

This will help to check “crazy” bills and also facilitate deployment of metersto consumers who advance money for their pre-paid meters which had become elusive.

NERC was created in pursuant to the provision of section 32 of the Electric Power Sector Reform Act ESPRA, charged with various functions including to create, promote and preserve efficient industry and market structures and ensure optimal utilisation of resources for the provision of electricity service, regulation of the electricity market, issues of licenses, formulate regulations and settle disputes.

Investigation showed inconsistency on electricity tariff. For instance, the N750 levied on consumers have been stopped, but this charge is still contained in bills. When this reporter went to pay the February bill 2014, N750.00 was listed among the current charges, demanded by Eko Electricity Distribution company EKEDC.

A consumer, who gave his name simply as Abayomi complained of lack of power supply to his premises for several weeks, yet the bills kept coming and the charges rising. He told Saturday Vanguard: “We are still paying for darkness. Those coming to give us bills are still behaving like PHCN men. They don’t listen to complaints and act accordingly. They still behaved to customers with impunity. The reforms are yet to be seen.

“Maybe with time, things could get better. But for now, nothing is happening.

“The new owners are still in the shadow of PHCN. We are expecting a change.”

Deinde Joseph says things have not changed for good. “For two or three days, there is no power in my area. At times, power is rationed – three days in a week, but bills do not reflect this fact. Worse is that the pre-paid meters promised are not in sight

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Power Sector Reform: Electricity mess persists as consumers lament extortion