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Tag: power firms

  • Sanction erring power firms, NERC told

    Nigerian Electricity Regulatory Company (NERC) should sanction erring power distribution companies (DisCos) to keep them on their toes, a group, Change Partners International, has said.

    Its Founder, Mr Akachukwu Okafor, said the advice is relevant now that the Federal Government and Siemens Incorporation have held talks on how scale up power generation by 11,000 megawatts (Mw) of electricity.

    In an interview with The Nation on phone, Okafor said many of the 11 DisCos have committed grievous offences in the past and went scot free, adding that any attempts to spare those firms again would affect the image of the industry.

    Okafor said: “Siemens is a world-class firm, with competence in generation and technologies. The company has the capacity to deal with issues we have with the grid in Nigeria. The contracts with Siemiens would strengthening the grid infrastructure, transmission lines and distribution networks in Nigeria. This is the reason the power distribution firms must be penalised in order to enable them do the tight thing.”

    According to him, the contract between the Federal Government and Siemens would help in boosting the the power sector.

    The government, Okafor said, must try and meet its obligations in order to ensure the success of the deal, adding that the German government has also put in place measures in order to ensure that the contract is delivered at the right time.

    He commended the Federal Government for partnering Siemens, stressing that the initiative is the best since President Muhammadu Buhari assumed office five years ago.

    He said: “The synergy between the Federal Government and Siemens to improve electricity in Nigeria is a good one. It is commendable as it is the best since Mr President assumed office about five years ago.”

  • Govt advises power firms to be less dependent on forex

    The Minister of Power, Works and Housing, Babatunde Fashola, yesterday advised power firms to be less dependent on other countries for human and material resources.

    He lamented that the Nigeria Electricity Supply Industry (NESI) is highly dependent on imported human and material resources, which has made it vulnerable to foreign exchange (forex) availability and rates.

    He spoke in Abuja during the opening ceremony of the Nigerian Electricity Regulatory Commission (NERC’s) two-day workshop on minimum specification of Nigerian Content and requirements for labour in the power sector and an exhibition of local products /services for the NESI.

    The ministry’s Director of Procurement, Engr. Ahmed Abu, who represented him, said: “NESI is heavily dependent on imported human resources, material, equipment and services. It is consequently vulnerable to foreign exchange availability and rates, to the extent that contracts for gas and generation are dominated in foreign currency.  It is time to systematically develop Nigerian capacity and content in the industry for its long term growth and stability.”

    Read also: Entrepreneur seeks more support for young Africans

    The minister said the objective is to intentionally use indigenous human and material resources, goods and services in the industry.

    He said the objective is also the opening up of the NESI at all levels of its complexity to involve Nigerians and expertise, building capacities to support increased investment leveraging existing and future investments to stimulate the growth the enterprise among others.

    He said President Muhammadu Buhari, pursuant to the authority vested on him by the constitution, ordered that ‘all procuring authorities shall give preference to Nigerian firms in the award of contracts, in line with the Public Procurement Act 2007.’

     

  • Workers to Buhari: don’t approve N309b bond to power firms

    Workers to Buhari: don’t approve N309b bond to power firms

    Workers, acting under the aegis of Senior Staff Association of Electricity and Allied Companies (SSAEAC), have urged President Muhammadu Buhari to shelve his administration’s plans to issue a N309 billion bond to finance the power sector.
    Its President, Chris Okonkwo, advised the government to first assess the performance of the power firms in the past three years vis-a-vis the conditions spelt out in the privatisation deal the firms reached with the government.
    He warned that the power generation in the country might not be viable in the future if government continued to spoon feed the power firms.
    According to Okonkwo, the anticipated efficiency in service delivery from the private power firms has not been met with deceptions and failed promises.
    One of such failed promises, according to SSAEAC president, is the provision of prepaid meters to electricity consumers within 18 months which the firms failed to supply. The power firms have consistently blamed high exchange rate for their failure to do this.
    Okonkwo added that the power DisCos have displayed inefficiency in revenue collection with 30 per cent collection rate as against 60 per cent the sector recorded pre-privatisation.
    Heargued that the financial and technical inefficiencies of the power firms were evident in the shortfall of funds they report despite enjoying series of intervention from government.
    The General Secretary of the union, Umar Dubagari, in a letter to the House of Representatives on the N309 billion bond, called for the formulation for a proper policy to achieve quality and functional electricity generation in the country.
    He said: “The issuance of bonds in this circumstance would amount to not only spoon-feeding the operators in their inefficiency, but also at a great cost to Nigerians as the risk of default would lead to national energy crisis in the future.
    “DisCos which collected revenue failed to remit in full to other market participants without any disciplinary measure by the Nigerian Electricity Regulatory Commission (NERC) to block the leakage. However, the NERC is not dong much. It sought for bailout from the Federal Government, year-in year-out in favour of GenCos and DisCos and more or less acted as their advocate.”

  • N900b liquidity gap: power firms cut costs

    N900b liquidity gap: power firms cut costs

    Investors in the power sector are cutting costs to stay afloat as the sector groans under huge debts of over N100billion and liquidity gap of N950billion, The Nation has learnt.
    It was gathered that management of the electricity firms, especially the power distribution companies (DisCos), have adopted cost -saving measures to spur growth.
    It was learnt that many of the firms were using ad-hoc workers as technicians to reduce their wage bills.
    Other strategies include providing meters to their customers to recover their debts.
    Ikeja Electric (IE) Acting Chief Executive Officer, Mr Anthony Youdeowei, said during a forum organised by the company that the aim of any business enterprise is to reduce losses and make gains.
    He said to realise this goal, the firm has promised to be customer-centric.
    He added that customers are key to the growth of the company, and that IE would always include its workers in its plans.
    Youdeowei said: ‘’The firm is customer-centric, and would try as much as possible to protect its customers in order to achieve the much needed growth. To achieve this, we are working to ensure that only workers that are ‘fit’ are employed. By this, I mean workers that display reasonable level of competence and do not commit crimes.’’
    Also, the Chief Executive Officer, Eko Electricity Distribution Company (EKEDC), Oladele Amoda, said the DisCos, despite their limited income, have recorded some successes.
    He said the firm records losses when it charges estimated bills, adding it can only make money when it provides meters to its customers.
    ‘’We have realised that we do not make money by charging estimated bills. The best way to make money is to provide meters to our customers and that is why we are planning to issue 200,000 meters to our customers soon,” he said.

    He said workers, who engage in corrupt practices, had been asked to go to promote integrity in the system.
    The investors that bought the assets of the Power Holding Company of Nigeria (PHCN) in 2013 were yet to record any meaningful growth due to challenges, such as shortage of gas for generation, and metering.
    The issue has led to the dwindling revenue and other associated problems.

  • Power firms

    Power firms

    •Time to wield the big stick?

    WITH hope fast turning into a mirage three years after the formal transfer of electricity entities to their current owners, the beleaguered electricity consumer must increasingly wonder whether the long advertised respite promised would ever come. Thirty-six months on, it is certainly true to say that the privatised electricity entities have neither been able to raise the bar in service delivery, nor fulfill their promise to inject capital and expertise on the basis of which a turnaround of the sector could be expected. For a group expected to bring solutions to the sector, it must be disappointing to see them roll out one alibi after another, even as the fortunes of the sector continue to dip.

    Only last week, newspapers reported the chief executive officer of Eko Electricity Distribution Company (DisCo), Oladele Amoda, lamenting that the funding gap in the power sector has widened to between N900billion and N1trillion. He blamed the situation on the huge debts owed generation companies (GenCos) and DisCos by consumers. For Eko DisCo alone, he put the debt owed by ministries, departments and agencies (MDAs) across all levels of government at N10.7 billion as at July. But what the DisCos always conveniently forget to add is that many of the consumers they claim to be owing them had been getting crazy bills for years and these accumulated bills form part of what they continue to see as debts.

    As if taking a cue, Amoda’s counterpart at the Port Harcourt Electricity Distribution Company (PHED) Matthew Edevbie, on Friday reported the monthly loss to unpaid bills and electricity wastage by consumers under the PHED at N2.2 billion.

    His words: “In Port Harcourt for example, every 100 units of electricity that comes to our electricity network, we collect only 25 per cent equivalent of money. Even when we install meters in homes, about 90 percent of the meters are usually by-passed. For every N1 billion worth of electricity PHED brings to this region, every month we get N450 million and lose N550 million.

    “PHED’s supply of electricity to four states is in excess of N4 billion every month, meaning that we lose N2.2 billion worth of investment funds on monthly basis”.

    Just as the spectacle of operators perennially whining or moaning about gas or tariff issues is increasingly familiar, what must be astonishing is the continuing attempt to present these problems as either new or something that developed overnight – or that the government has done nothing about some of the problems – something we know is not true. At any rate, if the DisCos discover bypassing of prepaid meters, how many such consumers have they caused to be arrested?

    Again, we understand that some of the problems are deeply structural and hence would require time and hefty capital outlay to solve. Some in fact are beyond the operators to solve and so are quite understandable. The overall conclusion is that the entire privatisation exercise has not turned out as it should. The problems, unfortunately, have more to do with the operators than any other body. This is where the Federal Government not only needs to take a second look at the issues but to approach things more dispassionately.

    Today, what must confound any observer of the sector is the fact that the operators, particularly the distribution companies, have neither demonstrated serious understanding of the sector nor shown that they have the financial or technical muscle to pull it out of the morass that it has sunk. This is the context in which the current clamour for the reversal of the privatisation process deserves to be understood.

    We are aware that the Minister of Power, Works and Housing, Babatunde Raji Fashola, has insisted that the Federal Government will not reverse power sector privatisation, despite the challenges facing the sector. According to the minister, the terms of agreement can be revisited, but the process cannot be reversed.

    We do think that the minister missed the crucial point. While he is in order to worry about the implications of an arbitrary voiding of the contracts, the issue here is whether the operators that have not only proven to be utterly incompetent but have also not shown fidelity to both the spirit and the letters of the contracts can be further allowed to hold the nation to ransom. This, in our view, is the crux of the matter.

     

  • Reps to probe 14 power firms over power purchase agreement

    Reps to probe 14 power firms over power purchase agreement

    Indications emerged yesterday that the engagement of 14  firms by the Federal Government under its Power Purchase Agreements (PPA) by the Nigerian Bulk Electricity Trading (NBET) may be subjected to legislative investigation.

    The House of Representatives Committee on Power said the agreement with the 14 firms breached due process as there was no proper guideline for the engagement.

    Doubts were also raised over the nation’s  ability to meet the 20,000 megawatts (Mw) power generation target set for 2020.

    The Dan Asuquo-led House Committee, during its oversight visit to Abuja headquarters of the  NBET yesterday was also told that Nigeria lacked capacity to power its homes and industries with nuclear or wind energy.

    On the engagement of 14 firms under the PPA, the lawmakers said the process was suspicious as it appeared there was no proper guideline for the engagement.

    “If there was no proper guideline, the process of acquiring those 14 companies was null and void. I can assure you if we leave here with that, there’ll be an investigation on this.

    “If the standard is not in line with global best practices, of course, there will be a lot of questions. Whoever directed such a thing will appear before us,” Asuquo said.

    Responding, the  Managing Director and Chief Executive Officer, NBET, Marilyn Amobi said the management under her leadership was on the verge of correcting some identified anomalies in the organisation.

    According to her, there was an in-house guideline produced in 2011 that met the set standard at the time, but that it would not be used in future as the organisation was developing a new one.

    Amobi, who assumed office in August this year was emphatic  that the country lacked the capacity for nuclear energy, arguing that there is no way Nigeria can achieve the 20,000Mw power generation target it set for itself by 2020. Amobi said: “From my perspective, we have no business talking about 20,000 Mw for 2020. It’s clear we can’t achieve that by 2020.

    “A lot of talk shows are going on in this country in form of workshops on that. There will not be any 20,000 Mw in 2020. We can’t make that happen.

    “Nigeria is not financially buoyant to embark on (nuclear energy) such. We cannot run nuclear in Nigeria, and the question of wind energy, forget it. It’s just a story. We cannot run all that in Nigeria. It’s just a wish list.”

    Amobi’s  position may not be different from that of the Minister of Power, Babatunde Fashola whose  Power Roadmap may have tactically reduced Nigeria’s power target over the next five years by half.

    Fashola had earlier said the Transmission Company of Nigeria (TCN)  expressed a desire to increase transmission capacity from today’s 5000Mw  to 20,000Mw over the next five years (by 2020).

    Technically, this would imply that government may have cut its initial target of generating 40,000Mw by 2020 by half.

  • Govt, NPC, power firms plan energy audit

    The Federal Government, the Nigerian Population Commission (NPC), power firms and other stakeholders in the value chain are planning to an energy audit to ascertain the level of electricity consumed in the country.

    The audit would also help in improving supply, it was gathered at the weekend in Lagos.

    While the Federal Government serves as the main driver of the energy audit scheme, the NPC, the power generation companies (GenCos), the distribution companies (DisCos), the Transmission Company of Nigeria (TCN) and others are partners in the project.

    It was gathered that the government through the NPC is trying to know how many citizens it has, where they are, what they need, what kind of services or appliances they use, among other issues, that are pertinent to the success of the exercise.

    Industry sources said the idea requires collating data on the daily power consumed in each of the 774 Local Government Areas (LGAs), the six geo-political zones, factors hindering electricity supply and others, as well as helping the government to fashion out plans on how to ensure even distribution of power in the country.

    The Minister of Housing and Power, Mr Babatunde Fashola, corroborated this move at a stakeholders’ forum in Lagos recently.

    He said it was important that Nigeria knows the energy consumption level of its citizens, while trying to proffer solutions to what he described as ‘systemic power problems’ in the country.

    He said this initiative could be carried out by meeting the agency assigned with the responsibility of taking census in Nigeria, the distribution companies which interface with the electricity consumers daily by fixing their meters, giving them bills and meeting other obligations.

    Fashola said: ‘’ Regarding the issue of energy audit,  I believe it is important for the government to know how many citizens it has, where they are and the nature of equipment they use. These would help the government in predicting the kind of energy they consumed,  the ways through which they are accessing the energy and what should be done to make each locality enjoys power.’’

  • Suit querying N213b loan to private power firms stalled

    Justice Adeniyi Ademola of the Federal High Court, Abuja, has declined a suit querying the N213 billion loan handed by the Federal Government to privatised electricity companies under the Nigeria Electricity Market Stabilisation Facility (NEMSF).

    The plaintiff, Baribefi Tebira, sought to restrain the Central Bank of Nigeria (CBN) from giving out the money, from which he said about N57.79 billion had been disbursed as at mid-February.

    Tebira, a lawyer, contended among others, that the arrangement was fraudulent and meant to swindle the country. Also, he noted that the facility is a duplication of an earlier one – the N300 billion Power and Aviation Intervention Fund (PAIF) – created by the Federal Government in 2013 and from which N11.628 billion was disbursed by June 2013.

    He argued that the CBN lacked the powers, under its establishment law (particularly, Section 34(c) and (d) of the CBN Act 2004), to create a loan facility of 10 years to private companies at 10 per cent.

    The plaintiff urged the court to declare that the loan paid from the NEMSF by the CBN to the privatised electricity companies, which were privatised under the Public Enterprises (Privatisation and Commercialisation) Act was illegal and contrary to public policy.

    Tebira sought an order of perpetual injunction restraining the CBN from further disbursing any fund by whatever name, whether NEMSF or other, to the privatised electricity generating and distribution companies under the Public Enterprises (Privatisation and Commercialisation) Act.

    He prayed for an order directing the CBN to terminate and recall such facilities granted to the privatised  companies under the NEMSF.

    Defendants in the suit were the CBN, Ministry of Finance, Ministry of Power, Ministry of Petroleum Resources and the attorney general of the federation (AGF).

    The plaintiff argued, in a supporting affidavit, that having been privatised and the companies having increased tariffs more than once and directed customers to make down payment for meters, there was no justification for the Fed Government to further hand out public funds to them.

    “As much as government owns shares in these companies, majority of the shares in the companies have been bought by private investors, who before buying them, demonstrated capacity to finance the project as a private commercial concern.

    “I am surprised that the same private investors, after demonstrating they can acquire such shares are applying for loans under the facility created by the CBN over projects they claimed to be able to finance, which was a criteria for winning the bid process,” Tebira said.

    He argued that even if such loan should be granted, there was no need creating another one as the better organised N300 billion PAIF, created in 2013, and from which only over N11 billion had been accessed, was not yet exhausted.

    “I am aware that the PAIF was created for the same purpose and the facility was disbursed under stringent measures, using the Bank of Industry (BOI) as the authorised deposit money bank and the African Finance Corporation (AFC) as the technical adviser.

    “The NEMSF, unlike the PAIF, was created with relaxed rules, no regulators and technical partners, with 14 private commercial banks acting as deposit money banks as disbursing banks.

    “The CBN, as a defacti bank, can indirectly give loans and advances for a maximum period of one year at a minimum rate of interest, which should not be less that one per cent above the bank’s minimum rediscount rate. Banks minimum rediscount rate as at December 2014 was 13 per cent.

    “The first defendant (CBN) can only give advances and credit facilities for a maximum period of one year as against the 10 years the first defendant is advancing credit facilities to the companies.

    “The process is fraudulent. The process demonstrates a colossal looting of the treasury in the guise of formulating bogus sector-driven monetary and banking policies aimed at revitalising the power sector,” Tebira said.

  • Abiara seeks probe of power firms

    Abiara seeks probe of power firms

    National Electricity Regulatory Commission (NERC)  has  been asked to investigate the activities of the  power distribution companies.

    Speaking at a news conference in Lagos, the General Evangelist (Worldwide) ,Christ Apostolic Church, Prophet Samuel Abiara said Nigerians are angry over the activities of these companies.

    According to him, some of the companies, aside giving  their customers outrageous bills, they make them pay for services not enjoyed.

    He said that right now many Nigerians including churches are not happy about the activities of these companies.

    Prophet Abiara, describing   the activities of  some of the power distribution companies as corruption that the present government is currently fighting, he said, EFCC should extend its dragnet on power distribution companies.

    He advised Nigerians not to despair because there is hope for the country and the economy would soon bloom, adding that that is why the authorities of the CAC worldwide have dedicated the last three days in the month of April to pray for the country.

  • Power firms apply for generation licence

    Nigeria Bulk Electriciy Trading  Plc (NBET) has received the names of some power firms which have applied for licences.

    They include Proton Energy, which has set up a 500-megawat (MW) gas plant in Sapele, Delta State

    This is part of the processes for the award of licence and operation in the power sector for generating companies (gencos).

    Chairman, Nigerian Electricity Regulatory Commission (NERC), Sam Amadi, who hinted this, noted that the commission  expects the company to complete  the requirements for a licence.

    “We expect that the company will expedite actions to ensure that all mandatory requirements is met and we expect correspondences from other bodies involved to confirm that Proton have met every requirements,” he said.

    To get the licence, Proton will have to show evidence of satisfying the requirements of bodies such as Transmission Company of Nigeria (TCN) and NBET.

    Managing Director, NBET, Rumundanka Wonodi, confirmed the development. He said: “We got a list from NERC about those that have applied for licence and who we can consider for PPA. Proton Energy is on the list.”

    He said the next stage for firms like Proton is to send a PPA draft to the prospectors to which responses are expected. “We have sent a PPA draft and the first schedule to Proton to get it to understand the process and what is required of it. What we expect from the company now, are list of issues and those that it had complied with,”he said.

    Proton Energy’s plant has an installed capacity of 150 MW, but this will be expanded to 500 megawatts. It will use Siemen technologies and other gas turbine technology.

    Its Executive Vice Chairman,  Oti Ikomi, said the plant initial capacity is projected to cost  $200 million and to be funded on a Project Finance structure on a 70 per cent debt and 30 per cent equity. This, however, is expected to go up when the power plant is expanded to 500 megawatts.

    Proton Energy is partnering with IL&FS Energy, leading infrastructure development and finance company in India.