A Review of the Nigerian Energy Industry

Rural electrification has become new money laundering scam – NERC boss

…DISCOs need N7bn to bridge metering gap in country

Oscarline Onwuemenyi

24 August, 2011, Sweetcrude, Abuja – The Chairman of the Nigerian Electricity Regulatory Commission, Dr. Sam Amadi, has noted that some state executives use the excuse of providing electricity to rural communities within their states to loot funds with little or nothing to show for billions of naira allocated for such amenities.

Amadi, who spoke in an interview with Sweetcrude in Abuja, said that many politicians, for varied political reasons, are wont to cite power projects in areas that lack transmission facilities, thereby rendering such investments to waste.

“Many of them go around talking about how much electricity they are generating or how many transformers they have installed. The facts we have from the experts on the ground is that nothing of such happened. Furthermore, we have discovered that most of the equipment procured for the Rural Electrification Projects in the state are not working.

“Let’s be clear on this, we have received reports from state governors making claims of N17 billion or N20 billion as investment in rural electrification, and you ask the distribution companies, since the projects must be handed over to PHCN, and they tell you that all the equipment that were supplied are all damaged and they have to replace them.”

“We are in this country and we see what is going on. The truth is that rural electrification has become the new money laundering scam, and that is why many governors will come to you and say they are commissioning 500 transformers, knowing that nobody would go back to count and verify. And so they commission an agent to go and waste state resources in China,” Amadi stated.

Amadi explained that NERC has just approved the Imbedded Generation regulation, which allows states or individuals to generate power in a locality or city and instead of connecting to the National transmission, they simply connect to the distribution company and drop the power to the city or area instead of getting it to the grid and bringing it back to the area.

“You simply connect to the distribution line under some framework and agreement and that power can be tagged for a location or city, like Abuja. For instance, if there is a power plant in this area that plans to give, say 50MW to this city, it simply needs to connect to the distribution company in the city which make reduces the cost of connection and increase power in the city.

He added, “These frameworks can work. We understand that the River state government and a few other governments have made appreciable investments in power. We know that many governors are not very keen to invest in power. And we are happy with those few who are doing something to partner with the Federal government in providing improved power to their power.

“With regards to the River State issue, the can drop the power and the Port Harcourt DISCO can buy the power and sell to industrial clusters and other consuming class and at the same freeing the power from the industrial clusters to other states and to citizens in rural Rivers State. That framework achieves a lot of things; it enables the use of the power generated by the IPP to power the development of that state

The NERC Chief Executive further noted that, “In fact, government supports the initiative by the governors of River state and other state governments that have ventured into providing independent power. We plan to have a session during one of their Governors’ Forum to make a presentation to show how they can engage in power generation, without necessarily destroying the framework of the National grid.

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