Gas shortages stall N1.064tn power plants sale

18 June 2015, Abuja – Nigeria’s privatisation of 10 independent power plants that could fetch up to $5.6bn (N1.064tn) is stalling due to a lack of gas supply, the Chief Executive of Aiteo Power and Gas, Mr. Ransome Owan, has said.

Gas pipeline

Gas pipeline

The Federal Government broke up its monopoly on power generation and distribution by privatising the sector two years ago, hoping to attract foreign investors.

“A lack of gas is stalling the deals,” Owan told a power conference in Lagos late on Tuesday.

Since that privatisation, the amount of power produced has stagnated, failing to reach a 2012 peak of 4,500 megawatts of electricity owing to gas constraints, plant outages and tripped circuits, according to Transmission Company of Nigeria.

About 3,346 MW of power was distributed to consumers during this year, it said.

The government also blames gas pipeline vandalism.

Owan said the power sector in Africa’s most populous nation was going through teething problems, most of which had to do with the change of ownership, which would stabilise with time.

The IPP plants were developed by Nigeria’s three tiers of government – federal, state and local.

Six new power plants have been built and another four are being constructed, but output remains poor as the plants do not get sufficient supplies of natural gas and the transmission lines cannot handle the power.

Nigeria has capacity to transmit just 5,500 MW of electricity on its grid, the sector’s regulator, the Nigerian Electricity Regulatory Commission, said at the conference, adding that it was finalising a framework which should be ready by year-end to allow private firms to build and operate transmission lines.

Older plants, privatised in 2013, are in dire need of an upgrade but the fledgling generating firms lack the cash to carry out repairs while distributors struggle with non-paying consumers and electricity theft. In some cases, consumers pay for only 40 per cent of the monthly bill.

– Punch

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