Power sector to get major boost in N8.612trn 2018 budget

President Muhammadu Buhari has assured Nigerians that his administration will make more commitment to improve the power sector, in order to boost the Nigerian economic recovery.

The President made this known while presenting a budget estimate of N8.612 trillion to a joint session of the National Assembly on Tuesday, saying that power sector reforms is work in progress even as he admitted that Nigeria still faces challenges of transmission and distribution, promising  that the country’s power sector would witness a turn around.

“I am pleased to announce that since 2015, the Transmission Company of Nigeria (TCN) and Niger-Delta Power Holding Company (NDPHC) have added 1,950 MVA of 330-132kV transformer capacity at 10 Transmission stations, as well as 2,930 MVA of 132-33kV transformer capacity to 42 substations nationwide. With these additions, the Transmission Network today can handle up to 7,000 Mega Watts (MW).

“The key bottleneck now is the Distribution Network where the substations cannot take more than 5,000 MW. This is constraining power delivery to consumers. We are working with the privatized Distribution Companies to see how to overcome this challenge. Nigerians should be rest assured that this Administration is doing all it can to alleviate the embarrassing power situation in this country,” the President said.

He also stressed that efforts are being made to sustain the continued expansion of generation capacity and enhance evacuation, saying “we approved a Payment Assurance Guarantee Scheme which enabled the Nigerian Bulk Electricity Trader (NBET) to raise N701 billion. This assures the Generation Companies of up to 80% payment on their invoices. This intervention has brought confidence back into the sector and we expect additional investment to flow through, particularly in the gas production sector.”

The President also assured the National Assembly that his administration is committed to the development of Green Alternative Energy Sources, saying “To date, we have signed Power Purchase Agreements (PPA) with 14 solar companies.

“We also approved the completion of the 10 MW Wind Farm in Katsina State, a project that was abandoned since 2012, and the concession of 6 small hydro-electric power plants with a total capacity of 50 MW,” he added.

President Buhari noted that to enable the successful take-off of these projects, and future Green Projects, the Federal Government will be launching the first African Sovereign Green Bond in December 2017. The bond he said will be used to finance renewable energy projects.

“We are very excited about this development as it will go a long way in solving many of our energy challenges, especially in the hinterland,” he said.

However, even as the President noted in his budget speech that 7,000 MW are being transmitted while 5,000MW are being distributed by the Distribution Companies (DisCos) the National Bureau of Statistics (NBS) had earlier released a report, saying that daily energy generation attained a peak of 3,880 MW on September 1, 2017 and daily energy sent out on same date was 3,825 MW, which represents the highest level of energy generated and sent out in the month of September 2017 and in Q3 2017.

Similarly, the highest daily energy generated per hour attained a peak of 93,118 MWh on September 1, 2017 and daily energy sent out per hour on same date was 91,801 MWh, the NBS said.

There appear some statistical discrepancies in the reports of both the NBS and the budget statistics presented by the President on Tuesday, but the President may have based his records on the October power transmission of 7,000 MW and 5,000MW distribution as declared by the Minister of Power, Works and Housing, Babatunde Fashola.