The Nation Newspaper

Tag: power plants

  • Lagos woos investors for 4,000Mw power plants

    Lagos woos investors for 4,000Mw power plants

    Lagos State government yesterday invited bids for the construction of up to 4,000 megawatt (Mw) gas-fired power plants to cover a national grid shortfall, seeking to end years of blackouts that have hit businesses and households.

    The World Bank says that four in 10 people in Nigeria, Africa’s most populous nation, do not have access to electricity, which investors often cite as one of the major obstacles to investing in the country.

    Lagos, a fast expanding metropolis of more than 20 million residents, said it required 6,000 Mw of electricity but was receiving only 2,000 Mw at most from the grid.

    It has now allocated four hubs for the construction of power stations under its Clean Lagos Electricity Market plan.

    “The minimum expected generating capacity for each of the four hubs will be 500Mw, which one or more generating power firms shall generate,” the state’s Ministry of Energy and Mineral Resources said in a public notice.

    Selected companies would be expected to arrange their own financing based on a power purchase agreement with the state.

    Read Also: Blackouts: Northeast Govs to set up solar power plants

    The plans follow a decision last year by President Bola Tinubu to allow state governments to generate and distribute their own power, replacing a previous law that gave only the federal government exclusive rights.

    Sub-economic electricity tariffs have discouraged investment by independent power producers in the past, but the government has started to remove electricity subsidies.

    Nigeria has the infrastructure to generate 13,000 Mw of power, but its creaking grid can distribute only a third of it, forcing businesses and households to run costly fuel generators.

    On Monday Nigeria suffered its ninth grid collapse this year.

  • NNPC restores gas supply to power plants

    THE Transmission Company of Nigeria (TCN) yesterday in Lagos said gas supply to generating stations had built up gradually after the Nigeria National Petroleum Corporation (NNPC) restored a ruptured pipeline.

    TCN General Manager, Public Affairs Mrs. Ndidi Mbah said within a day, power supply would be restored to normal.

    Mrs. Mbah said an indication that gas supply had improved was the increase in power generation into the National Grid to 3,876.9 Megawatts as at 17.00hrs on Monday, as reported by National Control Centre (NCC).

    “TCN wishes to use this opportunity to commend NNPC, especially Nigerian Gas Corporation (NGC) for the quick intervention.

    “The company also appreciates the Ministry of Power, Generation Companies (GENCOs), Distribution Companies (DISCOs) and electricity customers for their cooperation during the crises period,” she said.

    According to Mrs. Mbah, as soon as the gas build up is completed, the affected generating stations would resume normal generation into the national grid.

    The general manager said through the implementation of Transmission Rehabilitation and Expansion Programme, TCN was building new substations as well as upgrading existing ones and transmission lines all over the country.

    “This is expected to further stabilise the grid and also put necessary flexibility and redundancy in line with N-1 capacity.

    “TCN will continue to count on all Nigerians for support and understanding as it continues to expand the nations’ grid,” she said in a statement.

    TCN, on June 15, said rupture of a major NGC pipeline had scuttled the delivery of gas to six power plants.

    It said this led to a drop in power generation by 1,087 megawatts and compelled the company to embark on load-shedding.

    It stated that the load-shedding was adopted to maintain stability of the national grid, thus avoiding total power system collapse.

    The affected power stations included Ihovbor, Azura, Omotosho gas, Geregu gas, Olorunsogo gas, Sapele and Egbin Power Station, which has managed to generate 60MW only on each of its units, losing a total of 211MW.

     

     

     

     

  • Turning power plants to learning infrastructure

    Whereas when Nigeria unbundled the Power Holden Company of Nigeria (PHCN) into 18 successor companies and sold them to the rich and powerful people/groups in 2013, whereas the newspapers claimed that Nigeria recorded the biggest privatization transaction in global history, indeed it was not a wise thing for a nation to do. Why? That is because the action does not make sense when examined with respect to the demands for industrialization and establishing adequate and reliable infrastructural framework, including that of electricity. Adequate and reliable infrastructural system is a fruit or aftermath of industrialization. Mere unbundling of the PHCN and importation of hardware or erecting more plants will not promote industrialization or establish a reliable electric power infrastructure and adequate power supply.

    Industrialization is a state of knowledge, skills and competences. Competence – the ability to do things including manufacturing is not a commodity that can be bought instantaneously when a critical shortage is a fact as in the case of Nigeria.  Competence being the sum of knowledge, the ability to learn and experience, is uniquely related to persons. You may invest and erect power plants but you cannot buy the science for establishing adequate and reliable infrastructure through mere capital investment. Capital investments in infrastructure merely assemble capital assets which are Depreciating Assets (DAs) because they begin to depreciate in intrinsic value with time and usage immediately they are acquire or erected. On the other hand, the learning-man and learning-woman are Appreciating Assets (AAs) because their intrinsic values appreciate as they learn and work. Whereas the production strength of a capital asset is modeled by a decreasing function, that of the learning-person is modeled by a growing function.

    All persons are born as crying babies. The baby soon begins to babble (learns how to talk), acquires the competences to talk. The baby who could not babble grows up to be a dumb adult. Talking or speaking is a skill. The child must also learn how to read and write, otherwise, it grows up to be an illiterate. No one is born with the skills to produce. Virtually all knowledge, skills and competences are acquired through learning. One who wishes to be a good dancer must learn how to dance. A nation which hopes to manufacture many products must develop the people to manufacture them. Learning and acquiring new knowledge, skills and competences and applying these in solving problems including production, are the primary sources of achieving sustainable economic growth and industrialization. Industrialized nations enjoy the fruits or aftermath of industrialization. These fruits encompass all the good things the West and industrialized nations of Asia enjoy which African nations yearn to have: high productivity, true diversification – many sectors functioning efficiently and effectively, wealth, low interest rates, good and reliable infrastructure, etc.

    The intrinsic value of the learning-man or learning-woman appreciates in a compound fashion with learning intensity and time. Thus, when a person commences an educational or apprenticeship scheme, he or she begins from the lowest level or the novice position. Usually, at the end of the first year of learning, the learning-person is promoted to the second level, having learnt the things scheduled for level one. At the end of the second year, the learning-person again, is moved to level three. The growth achieved this way is sustainable. The learning person builds-up capabilities or competences, that is, the ability to do things increases as long as he or she continues to learn. The intrinsic value of the learning-person can be expressed in a quantitative manner. In a nation where learning – education and training, is emphasized, there is continuous build-up of knowledge, skills and competences (KSCs). As the learning process continues, a point is reached where each type of KSCs begins to enjoy the supportive impact of all others and all of them form an invisible KSCs-network, a sort of problem-attacking front. The nation at that point achieves Industrial Revolution (IR) – a technological puberty. Productivity improves dramatically, the nation achieves economic diversification – various sectors of the economy begin to perform efficiently and effectively.

    The economic transformation described as IR, may be likened to that which the spider achieves when it combines many of its silk-threads to make its web. The single silk-thread the spider spins is a relatively weak structural material which fails readily under any stress regime. However, the web which is made from the combination of many of the weak silk-threads catches the small creatures on which the spider feeds. In a like manner, no individual solves the problems of a nation, but a combination of many millions of knowledgeable, skilled and competent people transforms an agricultural nation into an industrialized one. Learning transforms an individual or nation from an undesirable status (characterized by mass unemployment, low productivity and poverty) into a desirable status (characterized by low unemployment, high productivity and affluence).

    Our quantitative analyses showed that the five variables for planning for industrialization are: 1) N – the number of people involved in productive work or employment in a nation; 2) M  – the level of education/training of those involved in productive activities in the economy and of the people of the nation; 3) L – the linkages among the knowledge, skills, competences and sectors of  an economy; 4) R– the learning rates or intensity in the economy and especially among the workforce; and N – the experience of the workforce and the learning history of the society. All the variables are related to the learning-man and learning-woman and the higher are the values of the variables, the better is the economy. These are the variables Nigeria should promote their rapid development.

    The origin of Japan dates back to the third century B. C. (Hall, 1971; and Reischauer, 1970). The nation was ruled by kings and existed in isolation till 1854 when America entered the nation through force. This led to a subtle military coup which brought the nation to the period known in Japanese history as Meiji Restoration in 1868. Meiji Japan, following her interactions with the United States of America and some European nations, decided to learn from the West, realizing that learning and rapid industrialization is the sure route to living in affluence and enjoying military power and respectable political status.  Japan expanded educational and research systems speedily.  Japan built very many public industrial plants to enable citizens to learn and acquire the capabilities to promote rapid industrialization.  Thus public enterprises in Japan were not built to make profit and provide jobs and service but as learning infrastructure. Japan built thousands of public enterprises. Most of the industries built by Meiji Japan lost money but because they were not built for profit, they could not be sold till the primary objective was achieved. Japan achieved rapid industrialization in the 20-year period 1886-1905 because of high intensity learning. That was after stagnating over the period 300 B.C.- 1868, 2168 years.

    No private company is established to promote learning – education (E) + training (T). The private enterprise is established to make profit. That is why the Nigerian GENCOs, DICOs and Transmission Company being operated as private enterprises cannot promote rapid industrialization and establish a reliable power infrastructure and an adequate and reliable power supply system for Nigeria for a very long time. It was a wrong step unbundling PHCN and selling the 18 units as private enterprises. The wise thing to do today is for the Nigerian government to repossess the sold plants, build more and different plants as learning infrastructure and promote rapid industrialization. Reliable infrastructure and adequate electric power are fruits of industrialization.

     

    • Prof Ogbimi writes from Obafemi Awolowo University, Ile-Ife.
  • Why six power plants remain idle – SPDC

    Why six power plants remain idle – SPDC

    Despite the worries over a record of 800 million standard cubic feet per day flared gas in Nigeria, six power plants remained idle for want of gas to fuel their operations, it was learnt Wednesday.

    The Shell Petroleum Development Company (SPDC), Senior Commercial Adviser, Upstream Gas, Emmanuel Anyaeto made this known to journalists on the sideline of “Gas Aggregation Buyers’ Forum” which the Gas Aggregation Company of Nigeria (GACN) organized in Abuja.

    According to him, the plants could not operate as there were no infrastructure to convey gas to their locations.

    He added that the gas producers were also reluctant to supply them gas owing to their rising the debt profile which was almost hitting $500million.

    He said Nigeria needed about two billion Standard Cubic Feet of gas to meet its needs for both domestic and power plants.

    Anyaeto said that: “The reason is because we have about six power plants in this country that are standing idle that are not getting gas. The reason why they are not getting gas even though we are flaring 800million per day is that we don’t have enough pipelines to deliver the gas to the power plants.

    “That begs the question why was the power plants built far away from where the gas is? The second thing is that the most of the producers are owed a lot of money. The producers are being owed close to $500million today.”

    The power plants, according to him, are government owned, but since the governments were not paying, the producers now required a guarantee that they would be paid upon supply of gas.

    This, condition, according to him, was what the governments were not meeting up with that culminated in the shortage of gas for the power plants.

    He said that amount of investment that is needed to meet the two billion SCUF in Nigeria is about $6million dollars for gas, pipelines and other infrastructure.

    According to him, producers were readily available for the gas business, but the challenge was whether customers are readily available to pay for the gas.

    Also speaking with reporters, the GACN, Managing Director, Engr. Morgan Okwoche, noted that for Gas Purchase Agreement (GPAs) that were signed were not effective because there was no security for the electricity generation companies that need a bank up while the Nigerian Bulk Electricity Trading (NBET) was yet to come up with any security instrument.

    He said that the N701billion intervention from the Central Bank of Nigeria had not been extended to the gas producers, stressing that GACN is in a position to certify any invoice dispute free.

    He revealed that the GACN wrote to the NBET and Minister of Power to involve the company to help in disbursing the N701billion to avoid dispute future.

    Okwoche said Nigerian gas market was still evolving and that the forum was convey to enhance the market.

    He said that the essence of the forum was that there are so many areas of the gas business that are not clear from the buyer, seller, transporter and consumer sides.

    Asked what was wrong with the market, he said that “the market is segmented, particularly the Domestic Supply Obligation, when it came into force has the power sector with a different price, gas based industry has a different price, and bulk distribution of gas has a different price.

    “And also, the gas volume that should be in the market we are not getting the required volume from the suppliers and they have a chain of reasons: one of them is debt and two is non-compliance with the regulations.”

  • Oando Gas & Power divests interest in captive power plants

    Oando Gas & Power divests interest in captive power plants

    Oando Gas and Power (OGP), a subsidiary of Oando Plc, has divested its interests in captive power plants and focused on gas infrastructure expansion.

    Speaking on the sideline of the just-concluded Nigeria Oil and Gas Conference and Exhibition in Abuja, the Managing Director, Mr. Bolaji Osunsanya, said: “As portfolio developers, we’ve divested from our captive power plants and aggressively focused on the expansion of our Gaslink franchise, which serves over 160 industrial and commercial customers across the Greater Lagos Area.

    “Our Joint Venture subsidiary with the Rivers State government, Central Horizon Gas Company, is poised to complete an additional 9km of pipeline infrastructure within the Trans-Amadi area by the end of first quarter of this year.

    “Also, our Compressed Natural Gas (CNG) entity, Gas Network Limited (GNL), which is our pioneering virtual pipeline initiative currently, delivers gas to customers within a 100km radius.”

    In the medium term, Osunsanya said the firm’s five critical flanks are to ensure gas supply security, develop virtual pipelines asset stable and gas processing infrastructure. In the long term, he noted that OGP expects long-term appropriate infrastructure financing, expansion of last mile distribution infrastructure with a particular focus on regional growth.

    The company, Osunsaya said, is set to take the final investment decision (FID) on its planned multi-million dollar 20 million standard cubic feet per day (mmscf/d) mini liquefied natural gas (LNG) plant to be located in Ajaokuta, Kogi State, before end of June.

    He said after taking the FID, construction of the facility would begin in the third quarter of the year. He said the essence of building virtual in the Ajaokuta mini-LNG is to create other ways of bringing natural gas to industrial and commercial concerns because pipeline vandalism is taking a toll on their operations.

    OGP is developing LNG facility via its newly-created Transit Gas Nigeria Limited (TGNL) subsidiary in partnership with Nigerian Gas Company (NGC).

    The facility is aimed at meeting the gas supply requirements for captive power plants, embedded generation, and industrial clusters in the Northern region, as well as stranded customers in the South.

    Osunsanya also said the firm has developed over 260km of gas pipeline distribution network, and pioneered the development of gas infrastructure and solutions across southern Nigeria, adding that the company has divested from its captive power plants.

    “OGP targets to increase gas sales levels from an average volume of 47mmscfd in 2016 to about 70mmscfd in the year. It also expects to complete and inaugurate projects, such as Greater Lagos 4 (GL4), and Central Horizon Gas Company (CHGC) expansion as well as aggressive regional expansion opportunities into Benin, Togo, Ghana, and Senegal,” he said.

  • Fashola: work on four power plants to be accelerated

    Fashola: work on four power plants to be accelerated

    The Federal Government yesterday said it will accelerate work on four hydropower plants in order to boost electricity supply in the country.

    Minister of Power, Works and Housing, Babatunde Fashola (SAN), said government will increase work on Gurara hydropower plant phase one and phase two, Zungeru, Dadin Kowa and Mambilla power plants to solve the energy problem.

    Fashola said continuous vandalism of gas pipelines and infrastructure across the country had forced government to explore other alternative sources of energy.

    The minister, who spoke at the launch of Building Energy Efficiency Guideline (BEEG) for Nigeria, assured that developing alternative source of energy by government would make it impossible to hold Nigeria to ransom in future by controlling any particular source of fuel for electricity.

    Fashola said: “We have seen from events that started from around the 14th of February this year, repeated acts of vandalism on our gas pipelines and infrastructure that renders us clearly vulnerable to one source of fuel for our energy development.

    “That has challenged us to develop options, alternatives – solar in particular and of course hydropower plants in more quantitative response. So we will be accelerating work on project like Gurara hydropower plant phase one and phase two. Work has started on Zungeru hydropower plant. We will also be accelerating work on Dadin Kowa power plant, as we will on Mambilla power plant which will give us the biggest single electrification source over a period of seven years that it is estimated to take to conclude it.

  • German investors to build power plants in Imo

    German investors to build power plants in Imo

    There is hope that power supply will no longer be a problem in Imo State. This is because a consortium of German investors will soon establish independent power plants in the state.

    The leader of the German delegation and indigene of the State, Mr. Wilson Chukwunyere disclosed that the investors are going to establish a 50 megawatts plant and another 30 megawatt solar energy facility to boost the state’s industries.

    He revealed further that the group once made attempts to establish a motorcycle plant under the then Sam Mbakwe administration before it was thwarted by a military coup.

    Chukwunyere also stressed the need for government to provide them with the enabling environment to invest in the state.

    Another member of the delegation and the Business Development Manager of the said Company, Mr. Volker Gutijahr assured that they will not disappoint if given the opportunity.

    In his response, the State Deputy Governor, Eze Madumere, who received the delegation in his office, affirmed that the state government will not go back in its promise to create a conducive environment for sincere businessmen who are willing to invest in the state.

    He noted further that the state government will also provide adequate incentives that will encourage and motivate investors coming to the state.

    Lamenting the dearth of Small and Medium Enterprises (SME), which he attributed to poor power supply, the Deputy Governor assured the group of the state government’s support, adding that “power remains the key for revitalisation of SMEs and establishment of industries in the State”.

     

  • 10 power plants may get gas by June, says NNPC chief

    10 power plants may get gas by June, says NNPC chief

    The 10 power plants built under the National Integrated Power Plant (NIPP) initiative  will be connected to gas pipelines either by June or the end of the year, Group Executive Director, Gas and Power, Nigerian National Petroleum Corporation (NNPC) Dr. David Ige has said.

    Speaking on the sidelines of the 12th Aret Adams Memorial Lecture in Lagos, at the weekend, Ige said the connection would enable the plants to access gas for improved electricity generation and distribution.

    Aret Adams was former Group Managing Director of NNPC.

    Ige said the plants would add 5,000 megawatts (Mw) of electricity to the national grid upon completion.

    The plants are Geregu 11 (334Mw); Calabar (630Mw); Egbema (378Mw); and Ihonvbor (504 MW). Others are Gbarain (252Mw); Sapele( 504Mw); Omoku (252Mw); Alaoji (1030Mw); Olorunsogo II (750Mw) and Omotosho ( 500Mw).

    He said: “Plans are underway to connect gas pipelines to the 10 power plants constructed by the Federal Government to ease electricity problems and further encourage economic growth. Gas is critical to the growth of the power sector and the government is working to ensure that enough gas is channelled to the power generation plants.”

    Ige also stated that the government has made arrangement to  provide gas to the privatised power generation plants formerly owned by the defunct Power Holding Company of Nigeria.

    He said there is enough gas waiting for Omoku power plant but noted that pipeline vandalism is a major problem in the industry even as the government plans to reduce or stop it.

    “A lot has been done to bring huge volumes of gas to the power plants. But each time, we try to breach the shortfall in gas supply; our efforts are frustrated by vandals who break the pipes at will. Since the beginning of this year, we have not had one week of respite. There have been consistent attacks of pipelines. When we have these attacks, the pipeline pressure drops immediately because of the off-take. If we shut down to repair the pipelines, it takes about 10 days to repair. Thereafter, you need some days to build up the pressure. By the time you are building up the pressure, people are attacking the pipelines again,” he added.

    The Acting Head, Public Communication, Bureau of Public Enterprises (BPE), Alex Okoh, said the government is working hard to provide gas to the plants.

    The spokesman, Niger Delta Power Holding Company of Nigeria, Yakubu Lawal, said the company was not delaying the sale of the plants which investors bid for in 2014. He said the firm has completed the building of the plants, with Olorunsogo being the latest one commissioned a fortnight ago in Ogun State.

    “The goal of the company is to build the 10 power plants, which we have done in line with the mandates given to us by the government. It is the responsibility of NNPC to provide the gas. So, how did we cause the delay in the sale of the plants as rumoured in some quarters? he asked. Yakubu said gas supply was not part of the mandate given to the company and would not concern itself with that. He said the court would determine the fate of three of the plants that are under litigation.

  • Owners of 10 power plants emerge

    Owners of 10 power plants emerge

    The National Council on Privatization (NCP) Technical Committee Chairman, Mr. Peterside Atedo, yesterday in Abuja presided over the the financial bid opening for the 10 power plants of the Niger Delta Power Holding Company (NDPHC).

    The plants which are the National Integrated Power Project (NIPP) are jointly owned by the three tiers of government.

    Of all the firms that offered to buy 80% equity of the plants, AITEO Consortium, the only bidder for Alaoji Generation Company Limited won the bid with $902million.

    They firm had earlier offered $680million for the generation firm, which, according to Atedo, was below the reserved price. However, upon a second chance, AITEO jacked up its bid for the power plant to $902million, which the chairman said was above the reserve price.

    Meanwhile, EMA Consortium won the bid for Benin Generation Company  Limited with $580million and defeated the  reserved bidder Index Consortium, which offered  $575million for the same generation plant.

    With an offer of $625million, EMA Consortium also defeated the reserved bidder Nebula Power Generation Consortium that bid $623,750,000 for  Calabar Generation Company Limited.

    In the case of Egbema Generation Company Limited, Dozzy Integrated Power Limited emerged the winner with a bid of $415,075,000 while the reserved bidder, AITEO bided $392million.

    Gbarian Generation Company Limited got KDI Energy Resources that offered $340million as winner with Azikel Power Limited which offered $305 as its reserved bidder.

    Meanwhile, Seoul Electric Power Limited won the bid for Geregu Generation Company Limited with $690million, while Yellow Stone emerged the reserved bidder with $613million.

    The preferred bidder for Ogorode Generation Company Limited was Daniel Powe Cnsortium which offered $531,777,777 to defeat three others that failed to cross the reserved price.

    With $751,240,000, ENL Consortium Limited won the bid for Olurunsogo Generation Company as Index Consortium emerged the reserved bidder with &730million. AITEO, however, withdrew from the bid and lost its chances and entry funds.

    The bid for Omoku Generation Company Limited was won by Shayobe International Consortium  that offered $318,710,840 to floor the reserved bidder- AITEO Consortium that offered $312,500,000.

    Of the nine companies that offered to purchase Omotosho Generation Company Limited, Omotosho Electric Power Limited won the bid with $659,999,000. The reserved bidder ENL Consortium had offered $659,999,000 for the same generation company.

    Speaking, the Minister of State for Power, Alhaji Mohammed Wakil, noted that the ministry would accord the sector the necessary support it requires.

    According to the Managing Director, NDPHC, Mr. James Olotu, the 10 power plants are to offer Nigerians the best they deserve in order to grow the economy and reduce hardships of the citizenry.

  • Re: Scramble for power plants

    Re: Scramble for power plants

    YOUR Inside Business article under the heading: “Scramble for power plants” published on Sunday, July 21, 2013, provided a lot of insider details if not useful insights on the issues besetting the nation’s power sector and at best the renewed vigour with which the government is pursuing development in the sector.

    To be sure, the writer also provided a lot of arsenal with which any discerning public can attempt a post mortem at the end of the much touted privatisation. But pray, is it time to bring out our drums and cymbals yet to celebrate? I think not.

    For the avoidance of doubt, here’s a recap of the article, which would suffice.

    From the report, we are made to understand that the power plants designed by the Niger Delta Power Holding Company (NDPHC) are selling like hotcakes judging by the heightened interests expressed by 110 prospective investors for the 10 thermal stations. The NDPHC is currently offering for sale 80 per cent stakes in the 10 gas-fired power generating stations it built from the scratch on behalf of the three tiers of government.

    Specifically, the transactions, to be conducted through International Competitive Bidding is supposed to cover the following generation companies namely: Alaoji Generation Company Nigeria Limited, situated near Aba in Abia State of Nigeria with total gross installed capacity of 831.3 MW (at ISO); Benin Generation Company Limited, situated near Benin City in Edo State and with total gross installed capacity of 507.6 MW (at ISO); Calabar Generation Company Limited – situated near Calabar city in Cross River State, with a total gross installed capacity of 634.5MW (at ISO); Egbema Generation Company Limited – situated near Owerri in Imo State with a total gross installed capacity of 380.7 MW (at ISO); and Gbarain Generation Company Limited, situated near Yenegoa in Bayelsa State with total gross installed capacity of 253.8 MW (at ISO).

    Others are Geregu Generation Company Limited in Ajaokuta, Kogi State with total gross installed capacity of 506.1 MW (at ISO); Ogorode Generation Company Limited, Sapele Delta State with total gross installed capacity of 507.6 MW (at ISO); Olorunsogo Generation Company Limited, situated in Olorunsogo in Ogun State with total gross installed capacity of 754 MW (at ISO); Omoku Generation Company Limited, near Port Harcourt in Rivers State of Nigeria with total gross installed capacity of 264.71 MW (at ISO); and Omotosho Generation Company Limited in Okitipupa local government area of Ondo State, with total gross installed capacity of 512.82 MW (at ISO).

    Besides, in order to handle the sale of the power plants in line with due process and laid down procedure, the three tiers of government reportedly set up three committees namely, the Joint Evaluation Committee, with the mandate to evaluate the expression of interest for the power plants. The Joint Transaction Committee of the NDPHC headed by Managing Director, NDPHC, Mr. James Olotu; and the Joint Technical Committee, headed by Benue State Governor, Gabriel Suswam.

    Also towards this, the NDPHC, alongside the Bureau of Public Enterprise (BPE) and other stakeholders in the power sector, recently launched a road-show in Lagos, London in the United Kingdom, Hong Kong and New York in the United States, to provide needed information to potential investors on the 10 power plants.

    Expectedly, a great scramble is under way for the NDPHC plants. With Nigeria’s population of over 160 million people, the country is without doubt the largest market for investors in Africa. It is against this backdrop that over 200 investors have indicated interests in acquiring the NDPHC plants.

    Also, these investors are seeking to capitalise on the growth opportunities in the Nigerian electricity market where demand far outstrip current supply and the potential for strong economic growth is high.

    Moreover, some foreign investors are interested in the plants because they want to establish a strong presence in West Africa, using Nigeria as a platform for acquiring further assets in the region.

    The NDPHC plants are also being sought after since they are all newly constructed and as such offer the best fuel efficiency and lowest operating costs, thereby relieving investors of pressure from construction cum commissioning costs.

    Investors are also excited by the NDPHC plants because they are assets that can be further developed, as all but one of the open cycle gas turbine power plants have the potential for expansion and growth.

    In addition, these investors relish the opportunity to partner with the three tiers of government who have shown a strong commitment to the country’s power sector reforms, including taking several measures to support the creditworthiness of investments in the country.

    The power plants have also attracted mammoth investors’ interest because their buyers-operator would benefit from a Multi-Year Tariff Order (MYTO) designed to be cost-reflective tariff that accounts for operating cost and capital recovery, incentivising efficient operations based on best new entrant capabilities and technology. The MYTO also brings certainty to the tariff regime.

    Potential operators are also scrambling for the NDPHC power plants because they would benefit from a Power Purchase Agreements (PPAs) with the Federal Government owned entity – the Bulk Electricity Trading Plc. (NBET) – which will act as the bulk buyer of electricity in the early stages of market liberalisation.

    And, the opportunity to benefit from the 10-year term Gas Supply and Aggregation Agreements with Nigerian oil producers makes the NDPHC’s power plants a good buy for private sector investors.

    At the Hong Kong road-show, Suswam disclosed that the three tiers of government have thus invested well over $8 billion in building 10 power plants and expect over $6 billion (about N936 billion) in revenue from their sale.

    The revenue receipt, according to Mr. Olotu, would be ploughed back into the sustained capacity development in the power sector, specifically to build a number of hydropower dams across Northern Nigeria.

    But what remains to be seen is how the government will provide the gas supply need to energise these systems. What is the state of our gas turbines? Are they adequate enough? Can they serve the purpose?

    These are questions which require urgent and quick answers by Nigerians who are more than desirous of seeing a giant leap in the power sector. Before the euphoria over the power plants dies, it is trite to say that government must be seen to be proactive and not reactive on these score.

     

    Abdullahi, a public affairs analyst, wrote in from Awka, Anambra State