Vice President Yemi Osinbajo has said the federal government has injected about N1.5 trillion intervention fund into the power sector in the last two years, even as frequent outage persists across the country.
Speaking at a power sector roundtable hosted by Mainstream Energy Solutions Limited (MESL) at its Kainji Hydropower Plant in Niger State on Tuesday, Osinbajo who was represented by the Minister of Power, Engr. Sale Mamman, said “the Federal Executive Council (FEC) approved the third round of intervention funding for the sector, with a total of about N1.5 trillion in the last two years.
“However, if the country is to achieve its aim of channelling funding to other critical sectors, it is pertinent that structural reforms be put in place to enable the power sector fund itself sustainably,” Osinbajo stated.
The Daily Trust reports that N213 billion was given by CBN in 2015 to settle legacy debts of the privatised firms. Another N701bn was given to help Generation Companies (GenCos) to cover operational expenses between 2017 and 2018. The FEC in 2019 approved another N600bn for the GenCos which totalled N1.7 trillion.
Shortly before declaring the meeting open, Osinbajo said President Muhammadu Buhari plans to lift 100 million Nigerians out of poverty in 10 years, noting that it can only be achieved with a thriving power sector to drive industrialization.
“I implore all key power sector players to resolve to think of the solutions to the challenges in the sector,” he said.
The chairman, Board of Directors of MESL, Col. Sani Bello (rtd) urged the federal government to intervene in ensuring that monthly invoices’ payment for energy generation was improved from the paltry 15 percent it is getting.
“As at May 2019, we only received 15%. I don’t think any GenCo can survive with that,” he noted and urged government to provide cost reflective tariff.
Col. Bello said MESL operates Kainji and Jebba hydropower plants adding, “when we took over these plants about six years ago, their capacities were less than 300 megawatts (MW). But today, we have more than doubled that.”
MESL at the meeting tagged, ‘Next Level for the Nigerian Power Sector – Unlocking Real Liquidity’, said both plants now have 922MW capacity, generating 25 percent of the national grid energy.
To expand the plants, MESL has awarded a $27 million contract to recover Unit1G7 at Kainji plant. It will also spend $60m to rehabilitate Unit1 G8 and 9 turbines in the plant.
For Jebba plant, MESL said it will spend $32m to rehabilitate its turbines while budgeting for the maintenance of other turbines.
MESL will also invest $109m to expand the Kainji plant by installing two turbines to generate 240MW additional power to the national grid.
It has also spent N1.4 billion on 109 community enhancement projects around the dam sites of its two power plants.
At a panel session, the Partner and Chief Economist of PwC Nigeria, Mr Andrew Nevin, said PwC suggests that the electricity market could get N400bn liquidity if industries’ tariff was raised to N80 per kilowatt hour (kwh), and 50% electricity is dedicated to industries.
The Managing Director of the Transmission Company of Nigeria (TCN) Mr Usman Gur Mohammed, commenting on the sector privatization said, “Yes we have made significant progress since privatization.
“Generation has reached 7500MW, transmission has gone to 8100MW and distribution moved from 3000MW to 5000MW. We have made progress but not as fast as we thought it would be”, he said.
