FG requires $9.4bn annual investment in power, gas sectors

Chinedu Nebo29 November 2013, Lagos – The federal government will require a yearly investment of $9.4billion in the power and gas sectors to fuel the projected power growth that would be engendered by the recent sale of the assets of the Power Holding Company of Nigeria (PHCN).

Speaking at the just-concluded West African Power Industry Convention (WAPIC) held in Lagos, the Minister of Power, Prof. Chinedu Nebo, said the projected growth in power would generate investment opportunities across the full value chain.

He said $4.5billion and $400million would be invested yearly in gas pipeline infrastructure and the gas processing for power supply and industry, respectively.

In the area of power transmission, Nebo said $1.25billion investment would be needed yearly until 2016, adding however, that when the transmission funding structures are concluded, the figure would go up to $1.5billion until 2020.

To fuel the projected 2,500megawatts yearly growth in generation, Nebo said $3billion would be required annually.

He said the generation would come from solar, coal, small and medium hydro and off grid solutions, including the recently re-started Zungeru and Mambilla large hydro electricity power stations.

The minister who was represented by the Chairman of the Presidential Task Force on Power (PTFP), Mr. Beks Dagogo-Jacks, however, stated that the investment in distribution infrastructure would be determined by new private sector owners.

He, however, said, in order to curb distribution losses, a robust downstream loss reduction implementation and monitoring programme would be critical to sustenance of market liquidity.
“New owners are expected to implement loss programme as set out in their Sale Agreements. The federal government will watch the performance of these distribution companies very closely,” he said.

Nebo identified advisory and consultancy services at pre-investment stages to encourage private sector project bankability as one of the areas of possible cooperation between government and multilateral development partners.

Citing a Human Capacity Report by the National Power Training Institute of Nigeria (NAPTIN), Nebo stated that by 2017, the power sector would have a shortfall of 17,441 technical staff based on completion of projects under the National Integrated Power Projects (NIPP), as well as other federal government projects.

“This number does not include the requirements by new owners. Labour and the private sector are invited to partner with government to take full advantage of the opportunities created by a privatised and liberalised market to invest in technical manpower development initiatives to close the gap,” he said.

“Post-handover experience has shown labour’s continued patriotism as one of the keys to successful conclusion of the reform. Private sector led market has shown the capacity to manage labour more efficiently and in the days ahead, better harmony is envisaged,” he added.
Nebo noted that the increasing cases of crude and gas pipeline vandalism one disrupting gas supply to power plants, saying it had affected the electricity generation profile of the country greatly.

He gave assurance that top national security initiatives had been engaged to contain this trend.
Earlier in her speech, the Programme Director of Spintelligent, organisers of the West African Power Industry Convention (WAPIC), Christa Robijn, said the future success of the power industry would rely on partnerships and collaborations, skills development and investment in infrastructure.

“It is an exciting time for the power sector, seeing increased investment from both the private and public sector and a sincere drive from government to increase the generation capacity to accelerate economic development,” she said.

Meanwhile, the Benin Electricity Distribution Company (BEDC) has attributed the present poor distribution of power being experienced in the zone to vandalism of pipelines supplying gas to power plants.

The Assistant General Manager, Corporate Communications Department of BEDC, Mr. Curtis Nwadei, gave the explanation yesterday when journalists visited the headquarters of the company in Benin City, Edo State.

He said as a result, there was a sharp drop in electricity generation from 4,500 megawatts to 2,600 around the country.
Nwadei who debunked claims that the drop was a result of incompetence on the part of the new companies, said the problem of power generation was nationwide, and not the fault of the distribution companies, discos, noting that generation is still in the hands of the federal government.

According to him, “We distribute what has been supplied to us. As a result of the drop in generation caused by the vandalism, there is heavy load shedding.”

“Our customers should be very patient. The power situation we are experiencing now is not peculiar to Benin alone, it’s a national thing. It was caused by the vandalism of gas pipeline supplying gas to Obaipa plant. They are at the moment fixing it.”

“Please cooperate with our staff, don’t fight them. The people you see today are still staff of the new company, Benin Electricity Distribution Company. Please don’t harass them. Pay your bills when due, and pay into the banks or at any of our cash offices.

“Steady electricity is not something anybody can promise, it is dependent on the level of energy available. But if we have enough at this end, we will distribute.

He, therefore, assured electricity consumers in Edo, Delta, Ondo and Ekiti States of improved power supply during the Yuletide.

– This Day

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