FG’s privatization of NIPPs will increase liquidity, efficiency in power sector

The decision by the federal government to privatize electricity generating plants it has built under National Integrated Power Projects (NIPPs) is seen as attracting the much needed liquidity in the sector, increasing operational efficiency and saving threatened jobs, while generating new ones.

According to Chiedu Ugbo, the managing director of the Niger Delta Power Holding Company (NDPHC), the company has obtained approval to resume the privatization process of the 10 gas power generating plants built under the National Integrated Power Projects (NIPPs) which had been stalled since 2013.

Ugbo, who recently gave the hint at an energy forum in Abuja, said the privatization process will be restarted, but under a new arrangement, adding that the process would now be concluded in phases, starting with three of the plants, which are the 634 megawatt Calabar, the 506 megawatt Geregu and the 513 megawatt Omotosho power plants.

“The privatization of our power plants are still on course with three power station taken together in the first round, specifically, this process will continue with the conclusion of on-going privatization of Calabar, Geregu and Omotosho power stations,” he said.

The NDPHC was established in 2005 to hold assets and implement the NIPPs as Nigeria’s intervention to stabilize the power system.

The initial fund for this came from the excess crude account, meaning that the project is constitutionally owned by the federal government, the Federal Capital Territory (FCT), the 36 states and the 774 local government areas of Nigeria.

NDHPC was meant to serve and has been serving as a special vehicle for the government to implement this very important project.

Having invested in the establishment of 10 power plants, the company’s revenue generation through the sale of energy from these power plants started with the synchronization of the first NIPP power plants from Olorunshogo in Ogun State.

However, NDPHC’s power plants cut across the southern part of Nigeria from Calabar down to Ogun State, as well as another plant in Geregu, near Ajaokuta in Kogi State, north central Nigeria.

Since Olorunshogo which was the first plant to come into the grid in August 2011, the total energy invoice by the all the 8 operational power plants amounts to about N235 million.

Unfortunately, out of this figure, only about 55.3 percent has been paid by the market, meaning that the NDPHC is being owed about 44.7 percent of its invoice.

“Very soon we might be thrown out of money and that means about 500+ people will not have jobs,” Ugbo, the NDPHC boss, lamented.

The NIPPs privatization which was kicked off on November 11, 2013, was stopped midway on the basis of mixed transaction flaws that included non-availability or completion of some of the plants, as well as uncertainty of gas supply arrangements to the plants, amongst others.

Ugbo, however indicated that once the three plants at Calabar, Geregu and Omotosho are successfully privatized, the agency will move on to the others, meaning that private money will be pumped into the Nigerian electricity supply industry to activate contracts, supplying the much needed grid energy and good jobs.

He also noted that a decision on 150 megawatt Omoku energy facility will be taken after an ongoing project audit on the plant is concluded.

According to him, “a decision on Omoku power station will be taken after the conclusion of on-going project audit of the plant. All these strategies are designed to enable the management complete all the projects under phase one of the plant and deliver power to Nigerians.”

Also, the company’s management plans the completion of its Gbarian power station by firing the second unit to bring available capacity to 225mw, as well as completion of Alaoji combined cycle phase, which will bring additional capacity of 270mw with one block steam cycle.