Addressing Nigeria’s power sector challenges

Analysts observe the privatisation of the power sector in Nigeria notwithstanding, the country has yet to provide steady power supply.

They note that steady electricity supply is crucial to industrial development of any country, especially Nigeria that is planning to become one of the best economies in the world by 2020.

In their opinions, steady power supply will also reduce cost of manufacturing and other domestic services.

According to them, uninterrupted power supply will guarantee investments, employments for teeming unemployed graduates and reduce poverty level, among other developments.

Stressing the importance of steady power supply to development, most Nigerians believe that the provision of stable power supply is the most important dividends of democracy any administrations can accomplish.

Perceptive observers also recall that past administrations, since independence, have spent a lot of money on power projects without much result.

They note the Federal Government spent more than three billion dollars between 1999 and 2007 on National Integrated Power Project.

According to them, the recent full privatisation and unbundling of the Power Holding Company of Nigeria by the immediate-past administration have also not guaranteed steady power supply.

In an effort to make power sector effective, the Federal Government insists that it has signed a Memorandum of Understanding with Firstgate Business Intermediaries Ltd. and its South Korean technical partners, to construct 1,000 megawatts solar plant in the country.

Former Minister of Power Chinedu Nebo, who signed on behalf of the Federal Government at that time, said about two billion dollars would be needed to have an operational 1,000 megawatts thermal power plant.

He gave an assurance the company promised that it would build the plant in line with the agreement.

Nebo said the government would work towards assisting the investors on facilitating the project, especially to acquire the Power Purchase Agreement and other documents.

Kelvin Asogwa, the chairman of the company, said the company was also collaborating with local banks for the projects.

He noted the company had reputable technical partners from Turkey that had handled similar projects.

He recalled the company had an agreement with the government of Kogi to build a solar farm on 2,700 hectares of land.

In the same vein, the Federal Government says it has also signed another agreement with Solius NGPC, Peoples Home Association and Solar Force Nigeria Ltd. to ensure steady power supply.

Patricia Deworitshe, Assistant Director in the Ministry of Power in a statement recently, noted the agreement was to inject another 1,000 megawatts into the national grid.

She, nonetheless, explained the company would start with 100 megawatts in any location as recommended by the ministry.

Rasaki Porbeni, the Chief Operating Officer, Peoples Home Association, said the company planned to establish Solar Research Centres in some universities across the country to generate 10,000 jobs for Nigerians.

“Under the agreement, Solar Force Company will also produce one megawatt each of solar energy to 200 different villages in six different states of the federation,” he said.

These initiatives notwithstanding, observers note Nigeria’s total electricity generation has dropped from 4,500 megawatts to 2,800 megawatts within a year.

Giving further details, Godknows Igali, the Permanent Secretary in the Federal Ministry of Power, said the power output dropped from 4,500 megawatts on April 3, to 2,800 megawatts on March 30.

He blamed the drop on the vandalisation of gas pipelines and called for increased protection of Nigeria’s power infrastructure.

He also said that the ministry of power was working more closely with appropriate security agencies to adequately protect power infrastructure across the country.

Besides tackling the vandalisation of gas pipelines, observers express concern about the decision of some of the electricity distributions companies to pull out from the privatisation programme of the power sector.

For instance, the Integrated Energy Distribution and Marketing Company (IEDM) gave security challenge in some parts of the country as excuse for its decision to withdraw from the exercise.

In the same vein, eight other distribution companies have also threatened to withdraw on the grounds that the electricity tariff id low.

Further to this, the Bureau for Public Enterprises has approved the payment of N29.2 billion to the IEDM in a share buy-back deal.

Stakeholders in the sector, however, insist that the challenges facing the country’s power sector can only be overcome with proper pricing of electricity.

Kola Adesina, the Chairman, Egbin Power Plc, Lagos, expressed similar opinion, insisting that the power supply would be more stable in the country if the price of the product is right.

He made the observation recently in Lagos during the launch of a book entitled: “The Development of the Nigerian Electric Power System (1973-1990)’’

“The electricity sector is fundamentally flawed and it needs to be dealt with squarely.”

“The price has to be right for any investor to make it in the sector; it can only be profitable if the customers are satisfied with the supply.”

“Consumers’ satisfaction could be possible if only the product is readily available; and the product can also be readily available if the price is right,” he said.

However, President Muhammadu Buhari has assured Nigerians his administration would improve on electricity generation.

He said in his inaugural speech there was no other better ways to explain Nigerian’s poor economic performance over the years than the power situation.

“It is a national shame that an economy of 180 million generates only 4,000 megawatts and distributes even less.”

“We will not allow this to go on. Careful studies are under way during this transition to identify the quickest, safest and most cost-effective way to bring light and relief to Nigerians,” Buhari said.

Observers, nonetheless, urge the present administration to also take a critical and objective overview of the power sector privatisation to analyse its economic viability and sustainability.

They advise the Federal Government to invest in the development of alternative sources of energy, including wind and solar to boost the capacity of the country, to meet its energy requirements.

Sani Adamu

NAN