The World Bank is to come up with $500 million facility to boost the distribution segment of power supply in Nigeria to boost the activities of the power Distribution Companies (DisCos).
Similarly, the Nigerian Electricity Supply Industry (NESI) recorded N393billion in revenue in the first half of 2022, being its highest in eight years, while it also generated N74billion in the month of October.
These were the high points of the PMB Scorecard (2015-2023) as released by Minister of Power Engineer Abubkar D. Aliyu in Abuja Tuesday.
Addressing journalists, the minister said there’s a nexus between poverty and poor electricity supply, noting that this explained the focus of the Muhammadu Buhari administration on tackling the epileptic power supply.
He said: “We are seeing renewed investor confidence with the successful privatisations of the Afam Power Plants, the Yola Electricity Distribution Company, and the restructuring of the Aba Integrated Power Project. These three transactions signalled a return to large investments and netted the FGN more than N130 billion through the National Council on Privitisation and BPE.
“We are also driving a renewed focus on investor discipline. Electricity Distribution Companies that were underperforming and causing 80% of the market collection shortfall were restructured. To avoid moral hazard, the Bureau of Public Enterprise working with Lenders (under the supervision of CBN) successfully took over the failing DisCos and we are working to transition them to capable investors.
“An Electricity Distribution facility of $500 million called DISREP is also being structured with the World Bank to accelerate reforms in the distribution segment of the value chain.”
Revenue
On the revenue generation, Aliyu said: “An objective assessment would show that the economics of the power sector are beginning to make sense. In 2021, the Q2 record growth rate of 5% by the Nigerian Economy (as recorded by the Nigerian Bureau of Statistics-NBS) had a large contribution from the power sector with a 78% Year-on-Year growth (largely driven by liquidity reforms).
“In the 1H of 2022, the NESI recorded its highest revenue in 8 years at N393 billion. In the recent October billing cycle, the sector recorded a new milestone with the highest ever collections in history at N74 billion. We have done all of this while protecting our lower income citizens (that do not always receive adequate electricity) by maintaining subsidies for the lower tariff bands while allowing those with adequate power to pay relatively higher prices. Tariff shortfalls have been reduced by over 80% and we are on the path to having a sustainable market that can pay for itself.”
On Siemens, he said the federal government had repositioned the initiative after a slow start, stressing that six of the 10 equipment expected from the initiative were already being installed at various locations across the country.
“We have repositioned the Siemens Presidential Power Initiative (PPI) and after a slow start, we have begun to take delivery of critical equipment. You may recall that accelerated orders were placed for 10 Power Transformers and 10 Mobile Substations, with a delivery schedule beginning Sep 22.
“So far, 6 of the 10 Power Transformers have already arrived the shores of Nigeria and we have started installation in various locations while the remaining 4 are expected in Dec 22 and Jan 23. The Mobile Substations are expected from Jan 23 through to Apr 23,” he said.
Metering
On metering, the minister prided the administration as having “executed the most successful metering program post privatisation with 1 million meters rolled out in the first phase of the National Mass Metering Program. The Central Bank of Nigeria and the Nigerian Electricity Regulatory Commission were fundamental in designing and implementing this program.
“We are perfecting plans for an additional 6 million meters under the second and third phases of the program that will commence in the 1st quarter and 2nd quarters of 2023 respectively. The first phase generated 10,000 jobs in installation and assembly and we anticipate over 20,000 additional jobs would be generate in the second phase. Both the phases have sustainable financing structures. We are also establishing a Meter Service Fund that will allow for continuous metering in the NESI as a legacy of the Buhari Administration.”
Focus on electricity
While establishing the nexus between poor power supply and poverty, Aliyu said: “We have put a focus on electricity poverty. It is proven through various studies that there is a strong nexus between lack of electricity access and poverty. Prior to this administration, there was no coherent policy on Rural Electrification with key provisions of the Electric Power Sector Reform Act to electrify rural populations largely ignored. This Administration established the Rural Electrification Fund that provides up to 70% grants for rural mini-grid and solar home systems.
“Currently REF has electrified more than 300,000 citizens in its short existence. The Ministry is working with REA to expand the Rural Electrification Fund to create more opportunities for rural access.”
2023 target
Painting a picture of what the administration hopes to achieve in terms of stabilising the nation’s power source, Aliyu gave a 22 MW target.
He said: “This Administration will bequeath to Nigerians 4,000MW of additional generating capacity. We will complete and commission the 700 MW Zungeru Hydro Power Plant in the 1st quarter of 2023. We will also see to the operationalization of the 240 MW Afam III and 300 MW Okpai Phase II to mention a few.
“We will set the country on a stable path for 10,000 MW of supplied energy (today we are at 8,000 MW with 5,000 MW on-grid and 3,000 MW+ of industrial captive off-grid) and we will leave an installed capacity of almost 22,000 MW. We also have robust programs ongoing with facilities and investments secured of over $3 billion to eliminate the large gap between our transmission capacity and supplied energy.”
The Siemens intervention
On Siemens, he said the federal government had repositioned the initiative after a slow start, stressing that 6 of the 10 equipment expected from the initiative were already being installed at various locations across the country.
“We have repositioned the Siemens Presidential Power Initiative (PPI) and after a slow start, we have begun to take delivery of critical equipment. You may recall that accelerated orders were placed for 10 Power Transformers and 10 Mobile Substations, with a delivery schedule beginning Sep 22.
“So far, 6 of the 10 Power Transformers have already arrived the shores of Nigeria and we have started installation in various locations while the remaining 4 are expected in Dec 22 and Jan 23. The Mobile Substations are expected from Jan 23 through to Apr 23,” he said.
And unlike some of his colleagues who accused the governors of not doing enough in the area of collaboration, the power minister said in delivering on some of its targets, “we have leveraged the support of the various state governors to resolve Right of Way (ROW) issues such as the recently resolved Kumbotso-Dan Agundi ROW issue in Kano which lingered for more than 10 years.
“We are grateful to the National Economic Council (NEC) chaired by he Vice President that has been supportive towards addressing ROW issues which have significantly slowed down the implementation of transmission projects.”
