W’Bank, AfDB, Others Give TCN $1.6bn Lifeline to Restart Key Projects

• Fashola blames Discos for poor power supply, says generation has increased to 6,863MW
Chineme Okafor in Abuja

The Transmission Company of Nigeria (TCN) has disclosed that it has secured about $1.55 billion from five multilateral agencies to revive works on some of its key transmission projects, as well as expand the transmission grid.

This is just as the Minister of Power, Works, and Housing, Mr. Babatunde Fashola, has said Nigeria currently has up to 6,863 megawatts (MW) of electricity that can be sent to homes and industries in the country, but cannot send all of it to consumers because the distribution facilities of the 11 electricity distribution companies (Discos) were poor and unable to take up all of the generated power.

The interim Managing Director of TCN, Mr. Usman Gur Mohammed, spoke on the $1.55 billion facility at the 18th edition of the monthly power sector operators’ meeting in Kumboso, Kano State last Monday.

Mohammed explained that the intervention came from the World Bank, African Development Bank (AfDB), Islamic Development Bank, European Union (EU) and Japan International Cooperation Agency (JICA).

“The strategy is that we have approached the multilateral donors and have been able to raise some significant money. We have also resuscitated some projects that have not been doing well, like the Abuja transmission project, which is supposed to provide three sub-stations and provide another avenue for supply through Abuja from Lafia.

“We have also resuscitated the JICA project that has been on the drawing board for a long some time now, those two projects, plus the projects is about $1.55 billion which is coming from the World Bank; African Development Bank (AfDB); Islamic Development Bank; JICA of Japan. And the European Union (EU) is also giving us a grant,” Mohammed said.

He also noted: “We have a stranded load generation of about 2,000 megawatts (MW), this is not healthy for the development of the sector.
“On growing the load and avoid load rejection, we are working with Discos to see how to improve their capacity and we have appointed interface focal officers to help them pick more load,” Mohammed added.

The managing director, who assumed office in January this year amid opposition from the union of workers of the TCN, said the TCN has initiated efforts to upgrade the country’s power transmission capacity to 20,000MW in a few years.

Meanwhile, Fashola has explained that due to improvements in gas supply to thermal power plants in the South and adequate rains in the reservoirs of the hydro plants in the North, the country could conveniently generate 6,863MW and transmit 6,700MW of it, but the entire power would not get to consumers because the 33KV infrastructure of the 11 Discos is constrained.

The minister stated this in his opening remarks at the monthly meeting. He added that poor distribution infrastructure was primarily the bane of the country’s power industry.

“We have made some progress with generation. I have previously reported that unlike in 2016, damage to gas pipelines and assets have reduced in 2017 as a result of government’s effort and significant progress is being made with repairs and supply of gas.

“Although this does not mean that we have enough gas for all our power plants, we are at least getting closer to where we were in February 2016 when we hit 5074MW mainly by the gas plants before the attack on pipelines started.

“Today’s improved gas supply also coincides with the onset of the rains which gives us added power from the hydros. The available power that can go on the grid as at August 10, 2017, is 6,863MW. The transmission capacity is at 6,700MW. The primary constraint at the moment is the inability of the distribution companies’ 33kV infrastructure to collect all the power that can be delivered at the 750 33kV delivery points at transmission substations and distribute the energy to paying customers,” Fashola explained.

Speaking further on the development, the minister said: “But I regret to inform you that this progress creates a new problem. The Discos are unable to take and sell the power. This is the first time we have more power than the Discos can distribute. It shows that some problems in generation and transmission are being solved, while there are still challenges in the value chain.

“As you know, the assets that Discos inherited were largely aging, investment by them has not been sufficient, foreign exchange volatilities have affected their asset value base and their ability to access credit. We need every part of the value chain, from gas to generation, transmission to distribution to operate efficiently,” he added.

Reacting to Fashola’s claims, however, an energy expert, Mr. Dan Kunle, informed THISDAY on phone that the minister’s claims about the Discos’ inefficiencies were true, but that a good amount of power sold to consumers by the Discos were still unpaid for.

Kunle, equally blamed the government’s reluctance to allow for cost-effective tariff regime in the market as another reason why the Discos have failed to invest in network upgrades within their franchise zones.

“It is true that Discos cannot take up all the powers generated by the Gencos, but the minister should also tell Nigerians that Discos sell power to consumers at tariff regimes that are not cost reflective, and consumers still refuse to pay for the power they get. So, there is no how Discos would take more power when they are not being paid fully for the volume they send to consumers,” Kunle said.