Agora Report Calls for Continuation, Optimisation of Buhari’s Power Sector Policies

•Seeks decentralisation of TCN’s operations

Emmanuel Addeh in Abuja

Agora Policy, an Abuja-based think-tank, has called for the continuation and optimisation of the power sector recovery plan put in place by the outgoing Muhammadu Buhari administration.

In a brief on the power sector released yesterday, the think-tank called on the incoming administration to prioritise solving the interface issues and challenges across the entire power sector value chain.

It stressed that this ranges from  natural gas-to-electricity interface, generation-to-transmission interface to transmission-to-distribution as well as building on the current initiatives and projects of the Buhari government, with the objective to optimise the value-for-money outcomes of a number of the interventions.

“The incoming administration needs to continue the implementation of the power sector programmes, initiatives and interventions carried out by the Buhari administration.

“Oftentimes, new administrations are under political pressure to either terminate, suspend, put on hold, or create parallel projects, policies and interventions in the power sector.

“As an example, the administration of late President Umaru Musa Yar’Adua government suspended indefinitely the implementation of the National Integrated Power Projects (NIPP) and other power sector reform initiatives by the administration of President Olusegun Obasanjo, with great negative consequences that the power sector is yet to recover from,” the report recalled.

The brief was put together by a power sector expert and the Chief Executive of New Hampshire Capital Limited and the lead consultant on power to the Nigeria Governors’ Forum (NGF), Odion Omonfoman.

Agora added that the Buhari administration initiated a number of interventions to address the challenges of the power and improve the infrastructure across the sector. The most talked about, it said, is the Siemens power projects, being implemented under the Presidential Power Initiative (PPI).

The Siemens project, Agora noted,  is a three-phase infrastructure initiative designed to rehabilitate, upgrade, modernise and expand power transmission and distribution infrastructure across Nigeria.

It said that phase one of the PPI is estimated at 2.3 billion euros, explaining that 85 per cent of the funding will come from a consortium of German banks and in certain instances, Development Finance Institutions (DFI) while the Nigerian government will provide a counterpart funding of 15 per cent.

Aside from the Siemens projects, the Transmission Company of Nigeria (TCN), the report said,  has also secured a number of offshore financing to improve transmission infrastructure across the country.

“The Central Bank of Nigeria (CBN) has also been involved in providing long-term capital to the sector for transmission and distribution interface projects.

 “The World Bank funded DISREP is a $500 million programme to help improve service quality of Discos in the areas of metering, loss reduction and distribution infrastructure network rehabilitation, improvement and expansion. The National Mass Metering Programme (NMMP) is an initiative aimed at closing the metering gap in the country.

“The incoming administration should continue the implementation of these and perhaps other projects and initiatives of the Buhari administration in the electricity sector.

“While we advocate for the continuation of the Buhari administration interventions, the incoming administration should also review and optimise some of these programmes and initiatives to ensure value-for-money,” Agora posited.

Besides, it pointed out that Nigeria’s subsisting national electricity policy was developed in 2000, explaining that the policy has basically remained unchanged since it was developed under late Dr. Olusegun Agagu as the Minister of Power.

With the recent constitutional alteration of section 14(b) of the concurrent legislative schedule of the 1999 Constitution (as amended), the think-tank said it has become more imperative to develop a new national electricity policy.

“This is more so as decarbonisation and energy transition from fossil fuels to clean sources of energy are now very important aspects of any country’s national energy policy.

“Consequently, the incoming administration must develop a national electricity policy that reflects the electricity aspirations of both the federal government and the states in line with the new provisions of the constitution.  In same vein, the EPSRA (2005) is no longer fit-for-purpose,” it added.

While the National Assembly may have started work on the new electricity law, Agora said that it should strengthen the national regulatory framework and the powers of the Nigerian Electricity Regulatory Commission (NERC) as the electricity regulator as well as improve and strengthen existing electricity market structures.

Furthermore, the report said that it should incentivise the market to a more efficient, contract-based market, decentralise the operations of the TCN and in general, reduce government’s participation and allow more private investments in the power sector by opening up the sector to greater market competition.

Lack of effective co-ordination of the various segments of the power sector value chain, it contended,  remains one of the causes of the dysfunction in the sector.

“Thus, the incoming government should consider the establishment of a standing inter-ministerial energy committee to be chaired by the vice president,” it noted, with the committee’s role being to ensure effective coordination of agencies and operators that are part of the gas-to-power value chain.