…Requires N15bn yearly for three years
Oscarline Onwuemenyi 19 August 2015, Sweetcrude, Abuja – In a bid to reduce its dependence on government for funding, the Transmission Company of Nigeria, TCN, says it has shortlisted over 30 local and foreign investors to boost investment in the transmission infrastructure to enable it attain its target of 8,000 megawatts capacity by end of next year.
The firm has set a target to achieve the capacity to transmit 8,000mw of power by the end of next year considering the continued improvement in power supply.
Its Managing Director, Dr. Abubakar Rasheed Tambuwal, said the management was being proactive in order not to be caught unprepared.
He said that the step being taken by the management was important because the Federal Government would not be part of the funding. The investors will bring in their money and TCN will pay them back within an agreed period. Abubakar said the TCN wheels out 4,662MW and has capacity for 5300MW.
According to him, although the company can transmit 4,662MW and has capacity to wheel out more, it has to prepare for more power generation and shouldn’t wait for the government before taking steps to achieve that. This is why management seeks private sector investment.
To achieve 8,000MW transmission capacity, TCN needs an investment of about N15 billion yearly over the next three years, he added.
He said: “We are looking at a minimum of about N15 billion yearly over the next three years if we should be able to achieve the 8,000MW. Therefore, with regard to the investor financing scheme (IFS), we have just shortlisted investors from within and abroad that are interested in the project.
“The Company has over 30 of them that we feel will be able to deliver on some projects that they have chosen. I cannot tell you the names of the shortlisted investors for now until the deal is sealed and delivered. We are trying to see that they are capable technically and financially because once they come in; they are expected to execute the project themselves with the funding they are able to galvanise from either externally or within the country.
“We have shortlisted them and we are in the process of coming up with a framework from which they can recover their investment with time. Since the Federal Government will not give them sovereign guarantee, we are coming up with modalities of repayment from the wheeling charges from our internally generated revenue over a period of time. It has not been finalised. We are still working to get all the support that is needed from the government for us to be able to achieve this.”
He said internally generated revenue is part of the money TCN collected from the customers by the distribution companies, noting that considering the quantum of power generated, TCN’s portion of the collection will be substantial enough to sustain its operation and pay back to the investors in the project.
On the level of funding from the government, Abubakar said funding has not improved considering the fact that a lot of projects are in the pipeline, which need to be funded and because of the present situation, there is need for additional funding even from what the firm used to have.