NESI owes TCN N100bn over poor returns on invoices

Nigerian Electricity Supply Industry (NESI) is owing the Transmission Company of Nigeria (TCN) about N100 billion, which are wheeling charges for its conveyance of energy from Nigeria’s many power generating plants to the nation’s electricity distribution companies (Discos) for onward delivery to end users nationwide.

This was disclosed Wednesday by Abubakar Atiku, managing director/CEO of TCN, while addressing a press conference at the company’s headquarters in Abuja.

Atiku lamented that the major challenge confronting TCN was the problem of illiquidity in the electricity market, stressing further that payments for services in the market had gone down from 55 percent to 30 percent in the recent past.

“It would interest you to know that TCN is being paid an average of 33 percent of her total invoice sent to the Market Operator (MO) between January and September 2016, which further reduced to 27 percent in the month of November, 2016,” he said.

Atiku blamed the Discos for not doing enough in reducing collection losses and improving revenues for the market.

On the part of TCN, he said “we are working hard to ensure the completion of the outstanding critical projects funded in the 2016 budget and, hopefully, to be funded in 2017.

In order to complement the federal government in funding the projects, BusinessDay learnt that a framework for contractor financing has been approved rollout in 2017, and that a $200 million pilot scheme will be advertised for interested investors to key into towards the reinforcement and refurbishing of TCN’s existing lines and sub-stations.

“This exercise is expected to commence as soon as our cash inflow increases from the present 30 percent to 60 percent, which will guarantee repayments to investors over a period of time to be agreed upon,” said the TCN boss.

Already, some concessionary multinational loans and grants are being accessed by TCN, which have contributed to the completion of some of its projects and are also slated to be used for the completion of projects in 2017 and beyond.

The financing portfolios are those from the World Bank, about $300 million, which has already been exhausted and another $364 million being expected in the second tranche.

There is also another funding through the Eurobond ($135mn), while there is another $200 million being expected for deployment from the Japanese International Corporation Agency (JICA) beginning from the year 2018.

Also, the African Development Bank (AfDB) has provided contract finance of about $150 million, which was utilized 75 percent, as well as a second batch of $50 million, which enjoyed only 20 percent utilization.

When completed, these projects are expected to increase TCN’s wheeling capacity from the current 6,500 megawatts to 7,200 megawatts by the end of 2017.

The projects targeted for completion include rehabilitation of Afam 1x150MVA, 330/132/33kV transformer and the construction of Afam IV to Afam 1x132Kv transmission line at 95 percent completion, Katsina-Daura 132Kv line and 2x60MVA sub-station at Daura, which is 90 percent completed.

Also, there is Kafanchan 2x60MVA sub-station project that is presently 92 percent completed, as well as 1x150MVA, 330/132kV and 2x60MVA,132/33kV sub-station in Maiduguri, which is 85 percent completed.

Others are Osogbo-Ede 132kV DC transmission line (95 % completed), Kaduna-Jos 330kV DC transmission line (75% completed), Benin North-Osogbe 330kV DC transmission (48% completed), and Erukan-Omotosho 330kV DC transmission line (24% completed).

There are also 1x150MVA, 330/132kV DC and 60MVA, 132/33kV sub-station at Damaturu (92% completed), 40MVA mobile sub-station at Damboa in Borno State (45% completed), and 40MVA mobile substation at Mayo Belwa in Adamawa State (90% completed).