The Nation Newspaper

Tag: POWER

  • Privatisation: Govt reneged on power generation, funding agreements, operators allege

    The Federal Government may be the major cause of the problems being faced by the power sector after its privatisation. It has failed in most of the performance agreements signed with those who bought the power firms.

    According to the Eko Electricity Distribution Company (EKEDC) Board Chairman, Mr. Charles Momoh, and the Country Director, Energy Market and Rates Consultants, Mrs. Rahila Thomas, the government did not honour the agreements signed during the sector’s privatisation in 2013.

    Momoh said while handing over the assets, the government  promised that generation would be between 5,000 megawatts (Mw) and 7,500Mw by 2015.

    This, he said, has not happened  as agreements on improved supply of gas to thermal plants, establishment of cost-reflective tariff and payment of outstanding debts that accrued from unpaid electricity bills of customers, especially ministries, departments and agencies (MDAs), have not been respected.

    Mrs. Thomas said the transmission segment of the supply value chain works sub-optimally  because of  underfunding. She said the Transmission Company of Nigeria (TCN) was allocated N30.3 billion for capital expenditure in the budget contrary to the Multi-Year Tariff Order (MYTO) requirements.

    To buttress the huge shortfall in capital expediture allocation, she stated that MYTO requirement for 2016 is N205 billion. For 2017, it is N419 billion and N265 billion for 2018.

    She also noted that donors indicated their intention to provide $623 million for the transmission segment but nothing has been done three years after the pledge.

    Momoh and Mrs. Thomas spoke when the Senate Committee on Privatisation, led by its Chairman, Senator Ben Bruce, visited Eko Electricity Distribution Company (EKEDC), Lagos.

    Eko DisCo Chief Executive Officer Dr Oladele Amoda listed the challenges and achievements of the company, including the huge debt of about N10.7 billion owed by customers, power theft and meter bypassing by customers, among others.

    He appealed to the Senators to make a law that would prescribe stringent punishment for offenders involved in vandalisation of equipment, theft and tampering with meters. He urged the lawmakers to include in the 2017 budget appropriation the debts owed by MDAs.

    Bruce said the visit became imperative because people were questioning the privatisation process; “some said it was a mistake to have privatised the sector and why there has not been improvement in power. The generation level has not changed from what it used to be before privatisation. So the committee had to go round privatised entities to know the problems.”

    The committee chair said it was inexplicable that power output had not improved since the sector was privatised three years ago.

    The Federal Government owes the sector N900 billion. Bruce said it would be extremely difficult for the Senate to approve N1 triilion for the government to pay for debts when there was no output to justify such payment.

    The Committee promised to meet other DisCos, Appropriation and Budget Committees as well as stakeholders to find lasting solutions to the problems.

    The committee said the Senate would, before the end of the year,  draft a law against power theft, vandalism of equipment and meter bypassing. It also pledged to appropriate the fund to pay the debts owed the power firms in the 2017 budget, and also meet with the Central Bank, DisCos and the Bureau of Public Enterprises (BPE) to solve the problem of accessing foreign exchange by power companies.

  • Fed Govt invites World Bank, others for power supply

    To boost power supply, the Federal Government has invited World Bank, International Monetary Fund (IMF), African Development Bank (AfDB), United States Agency for International Development (USAID) and others, which have huge portfolios and interests, to invest in energy.

    The government is seeking investment in power generation, distribution and transmission.

    The Minister of Power, Works and Housing, Mr. Babatunde Fashola, made this known during a panel discussion at the 5th European Union- Nigeria Business Forum at the Eko Hotel, Lagos.

    He said the funding gap in the sector was wide and required investments to improve electricity supply and the economy.

    In his keynote address entitled Financing the power sector, Fashola said the sector has huge investible propositions, which only bigger corporations have the capacity to meet, adding that the sector has the capacity to provide returns on investment for any company that invests in it.

    He said the government was striving to provide an enabling environment through its policies to guarantee adequate returns on investment.

    Fashola said: “Without doubt, bad environment is a problem, which the government is trying to address. It is obvious that the power sector has huge potential, which can only be realised with the right environment.

    “When one considers that the sector is broken into 11 power distribution companies (DisCos) and six power generation companies (GenCos), one would see that there is huge potential in the industry. This is the reason the Federal Government is asking investors, especially global financial institutions, to invest in the sector.”

    The Head, Economic Cooperation and Energy Section, European Union, Mr. Juan Casla, said power sector was crucial to the growth of any nation, urging the Federal Government to put in place measures that would foster its growth.

     

  • Hostage to power (1)

    •(Intrigues as Gov. Amosun neglects Ogun State’s death roads)

    Ibikunle Amosun’s dalliance with power projects comic ironies. At his first pilgrimage in its shrine, he was robed and mitred as a messiah. But few days to the end of his first term as Ogun state governor and at the beginning of his second spell in office, he yielded to that proverbial mutation that remains the tragedy of many a Nigerian politician; almighty Senator Ibikunle Amosun a.k.a SIA got domesticated by power.

    Like too many of his peers, the executive governor of Ogun State, ceded sovereignty to power thus he was fatally crushed; like the court jester who dared to joust with a palace guard. Power is indeed seductive. Falling beneath its sway, Amosun lost control. He got tamed and undone by its beauty, like Achilles over Penthesilea and Obakoso over Oya. Mischief makers would say he emasculated himself sipping excessively from the bittersweet nectar of power. Did he?

    Aides of Amosun would argue otherwise. They would say Amosun plays master to power. They would describe him thus: “Amosun, like our revered sage, Chief Obafemi Awolowo, is a man that is conscious of his place in history. People like that are men of vision.”

    No doubt, Amosun is no stranger to power. He was elected Senator for Ogun Central district  in April 2003. In April 2007 he made an unsuccessful bid to be elected governor of Ogun State. He vied for the position again in 2011, and this time, he was elected on the platform of the Action Congress of Nigeria (ACN). He currently observes his second term on the platform of the All Progressives Congress (APC). You could be forgiven for thinking Amosun is no political neophyte but somewhere along the line, he got enfeebled by power. This sudden change, paralleling the finale of his frail leadership, has become his life pattern. It shades his history with a dark tan.

    Nonetheless, zealous underlings would describe Amosun as the best thing to happen to Ogun State. They would stress that he is a man of uncommon mettle and foresight. Anthony Storr, late British writer and psychiatrist would term this one of the many delusions that render Ogun state’s ugly reality justifiable for Amosun’s zealots, and as such, jealously defensible against all assaults of reason.

    Under Amosun’s government, calamity and death runs Ogun roads amok. Like blood-dimmed tide loosed upon a grassy plane, tragedy splashes about the ‘Gateway State,’ drowning lives and innocence in a passionate, intense swirl of ghastly auto accidents.

    The world would never forget in a hurry, the poor, helpless souls that thrashed out and gave their final gasps in grotesque, bloody accidents on Ogun’s bad roads – on Amosun’s watch. Omolade Ogunnoiki, 17, was a 100 Level History student of Olabisi Onabanjo University (OOU). Together with her friend, Funmilayo Pampam, 18, and Olatunji Dairo, a 2014 Physics graduate of OOU,  she was crushed to death. They were casualties of an auto accident involving a truck carrying an unlatched container and their Lagos-bound passenger bus, on the Ilishan- Sagamu highway in Ogun State. The accident claimed nine other undergraduates and the  driver of the bus.

    Omolade and Funmilayo probably nursed dreams of greatness. Dairo too. Their parents laboured to educate them,  they wished they would grow to become the pride of their families and their comfort in their twilight. As you read, those dreams lie six-feet under red earth, with the crushed teenagers and Physics graduate. In bid to avoid bad portions on the road, the driver of the truck reportedly drove against the traffic until its container fell off its hinges, crushing to death the two friends, Dairo and nine other OOU students. At the time of their demise, Ogunnoiki and Pampam were 17 and 18 years old respectively.

    Cut to a hodgepodge of mutilated and bloodied innards at Owode-Ijako junction, Ogun State: a beloved wife and mother, departed home with her three children only for them to be brought back as mangled corpses to the deceased’s husband. The victims perished in an accident caused by bad portions of Owode-Ijako junction. Lest we forget Baba Prince, the septuagenarian who was brutally crushed and torn to pieces, by a reckless truck driver who veered off the road to escape a deep crater, at the deadly Owode-Ijako junction.

    Overzealous aides would rail against this piece and many others. They would call it a ‘tiresome campaign’ that should be done with already. They would wonder why this page contains yet another account of bloodshed and deaths on Ogun State’s cratered roads. Some would term this an affront to “His Excellency,” an inexcusable slight to a man who truly loves and values the lives of Ogun citizens.

    If Amosun truly values the lives and safety of the people of Ogun State, he will stop ignoring the incessant deaths and bloody accidents caused by craters dotting the state’s famished roads. If Amosun truly loves the people of Ogun State, he would stop ignoring the misery and tears of parents and grandparents dying like stray fowls even as they experience the untimely deaths of their sweet, innocent children, on Ogun’s bad roads.

    He wouldn’t be having a blast expanding his mansion and beautifying it, while the citizenry’s infant sons and daughters are crushed to death at Owode-Ijako’s cratered junction. He wouldn’t scoff at news of the hot death suffered by the young native, who got burnt in a fire that started from a fallen tanker and extended from Owode-Ijako junction, into his home.

    If Amosun is truly the people’s messiah, he wouldn’t ignore the death traps on Ijoko, Agoro, Ijako, Iyana-Ilogbo, Ilepa, Lafenwa and Itele roads. He would stop ignoring the bloody ravines dotting Alade, Elekunmefa, Imise, Onihale, Singer, Iju, Lusada, Atan-Ota and Igbesa to mention a few. At Toll-gate junction, Joju, Temidire and environ, mucky pools still stagnate in perilous craters along the bypasses because these scenes of deadly accidents are inconsequential to Governor Amosun.

    Eighteen pages of hastily placed advertisement couldn’t drain the ink of this writer’s pen. It is an open secret that The Nation was never deemed worthy of advert patronage by his government until this column started to project the ugliness of his administrative incapacities.

    Journalists and media houses should never stop reporting the carnage on Ogun State’s famished roads, on Amosun’s watch. Let journalists be guided by the rhetoric: “If I lose my wife, children and grandchildren to accidents on Ogun State’s famished roads, what would I do?”; “If Omolade 17, Funmilayo, 18 and Dairo were my children, would I hail Amosun?” And shall we excuse Amosun’s neglect of Ogun’s death traps simply because they are ‘federal roads?’ Why can’t Amosun take lessons from Governor Akinwumi Ambode on how to rehabilitate bad ‘federal roads?’

    And would all of Amosun’s underlings, loved ones and associates excuse his continued neglect of Ogun’s deathtraps, if they had lost wives, husbands, grannies, infant sons and daughters on those bad roads?

    Now that Governor Amosun has mastered the fine art of ‘buddy sessions’ and ‘political statement’ with President Muhammadu Buhari on social media, will he urge Buhari to assist with the challenges that actually matter?

  • ‘Nigeria’s gas output can deliver 32 Gw of power’

    If dysfunctional gas facilities are fixed and fiscal and regulatory policy issues in the gas subsector addressed, the current gas production can deliver 32 gigawatts (32,000Mw) of power, oil and gas industry operators have said.

    This was contained in a communiqué at the end of the three-day international gas conference of the Nigerian Gas Association (NGA) held in Abuja.

    It was signed by the association’s president, Mr. Dada Thomas, and made available to The Nation

    Giving the verdict, they said there is a need to urgently fix the dysfunctional gas-to-power value chain, to attract investment to the sector. There is also the need for the government to respect the sanctity of contracts and agreements.

    According to them, the illiquidity of the power market requires urgent attention. “We suggest a rethink of the quality and capitalisation of players, and a readjustment of the tariff structure may be required. Without a doubt, we must find creative securitisation mechanisms that improve bankability,” they added.

    On gas policy, the communiqué noted that the conference recognised the role of the NGA in creating sustained awareness on issues, and the opportunities within the gas sector. It posited that the association should continue to work with the government and stakeholders to harness gas as a catalyst for sustained economic development with the right regulations and policies.

    “The emerging gas roadmap by the government is a welcome development that could provide the much-needed clarity on issues of ownership, infrastructure development, gas gathering and pricing.

    “The association will mobilise the sector to do a proactive review of the Draft Gas Policy to provide a win-win document that will attract the required investment for the sector. The intent would be the reduction of lead-time between policy formulation, legislation and implementation to enhance the competitiveness of Nigeria as a preferred gas investment destination,” it said.

    According to the communiqué, the conference recognised the need to nurture the willing buyer-willing seller commercial model that will encourage and sustain the gas value chain, from the reservoir to the consumer.

    It also saw the need to encourage investment in exploration for gas to increase national reserves and facilitate access to such reserves by competent operators. It recognised the threat to security in the Niger Delta and acknowledged the progress being made to address the menace. “We agree that the sector must join hands with government to support intelligence based security arrangements.

    “NNPC Joint Venture funding continues to constrain rapid development. We support the efforts towards finding alternative funding mechanisms.

    “There is slow decision making by policy makers and regulators and conference strongly recommends a collaborative model to find fast track processes and solutions that achieve the desire for Nigeria to be a gas-based industrialised hub meeting both local and export demands.

    “Conference believes that financing is possible if the right conditions for success such as fixing the gaps in the value chain, avoiding policy summersault, honouring sanctity of contracts, stabilisation of the exchange rate, long term view of fiscal policies are in place.

    “There exists the need for approximately $51 billion in investment in the sector to cover gas exploration, processing, transportation and general infrastructure. Whilst acknowledging the funding constraints of government at this time, we still agree that such investments must be Government led. It might require creative schemes to leverage the existing assets and infrastructure,’’the communique added.

    “The need to establish a Gas Promotion Council that will address investment opportunities in the sector was raised. The NGA puts itself forward to midwife same if it finds government’s interest,” the communiqué added.

  • Clamour for power shift resonates in Ogun

    Clamour for power shift resonates in Ogun

    The people Yewa/Awori, Ogun State, are increasingly becoming frustrated by their failure to produce a governor since the Gateway State was created 40 years ago. Traditional rulers from the area no longer want to leave things to chance. Ahead of the 2019 general elections, Yewa monarchs and politicians are already strategising to end the marginalisation. Correspondent ERNEST NWOKOLO reports. 

    Altough Ogun State is made up of three dominant groups, the Ijebu/Remo in Ogun East, the Egba in Ogun Central and the Yewa/Awori in Ogun West, the first two groups have been taking turns to produce governors for the state. Attempts in the past to end the apparent marginalisation of Yewa/Awori axis have always failed.

    Ahead of the 2019 general elections, traditional rulers and politicians from Yewaland have started strategising ahead for the governorship contest. The primary objective is to actualise their agitation for power shift to Ogun West Senatorial District. They want one of their sons or daughters to become the governor.

    The area comprises five of the old local governments — Yewa South, Yewa North, Ipokia, Ado/Odo/Ota and Imeko-Afon. Those not conversant with their plight may question the propriety of their scheming for the position, although the election that is more than two years away. However, it is understandable for others who have witnessed how the number one seat has been eluding them over the years, on the altar of internal crisis and lack of cohesion.

    Ogun is the home state of many notable Nigerians, including former President Olusegun Obasanjo, the late Chief Obafemi Awolowo, the late philanthropist and politician, Chief Moshood Abiola and the Afenifere leader, the late Abraham Adesanya. The state clocked 40 in February.

    Some of the past governors of the state are: the late Chief Olabisi Onabanjo (Ijebu), Otunba Gbenga Daniel (Ijebu/Remo) and Chief Olusegun Osoba (Egba). The incumbent Governor Ibikunle Amosun is also of Egba extraction.

    Before the return to civil rule in 1999, prominent politicians from the area such as the late Prof. Afolabi Olabimtan and the late Dr. Tunji Otegbeye tried to reverse the trend, but the attempts were feeble, in the face of the more organised, united and robust political onslaught by opponents from Egba and Ijebu/Remo axis.

    The highest elective position ever occupied by Yewa is the office of the deputy governor for eight years; Alhaja Salmot Badru, played that role during the Gbenga Daniel’s era. Someone from the area, Prince Suraj Adekunbi, is currently the state House of Assembly.

    In 2011, the zone came close to clinching the governorship position. The clamour for power shift almost propelled events in their favour, but they missed it, because of disunity and internal strife. Rather than forge a united front during the governorship election of that year, two of its prominent sons — former Military Administrator of the old Oyo State and later Sole Administrator in Ekiti State, Gen. Tunji Olurin, and former Group Managing Director, Gateway Holdings, Prince Gboyega Isiaka, contested against each other on the one hand and against Senator Ibikunle Amosun from Egba on the other hand.

    The chief promoter of Olurin on the ticket of the Peoples Democratic Party (PDP) was former President Olusegun Obasanjo, who saw Olurin as the best man for the job. Former Governor Daniel was the arrowhead in the push for Isiaka’s governorship agenda on the platform of the Peoples Party of Nigeria (PPN).

    The army general was said to be trusted, experienced and credible, with global exposure. But, the Yewa/Awori people were acrimoniously divided over who should go for the job, between him and the more cerebral and also younger Isiaka.

    The division was fuelled by the feud between Obasanjo and Daniel. The region could not speak with one voice and deliver bloc votes for one of their sons. As a result, Amosun, who enjoyed the support of his Egba brothers, and sisters eventually won the election.

    The mistakes of 2011 were repeated in 2015, as Akin Odunsi, who contested on the platform of the resuscitated Social Democratic Party (SDP) and Isiaka split the votes of the Yewa/Awori region. Odunsi was elected as Senator for Ogun West (Yewa) in 2011 on the ticket of the All Progressives Congress (APC), but owing to a disagreement within the fold, he contested the April 11, 2015 governorship race on the platform of the SDP. The two Yewa politicians could not dislodge the incumbent Governor Amosun of the APC.

    Indications are that the Yewa/Awori axis would continue to play second fiddle in Ogun politics. For instance, the PDP has just zoned its governorship ticket for 2019 general elections to the Ijebu/Remo axis.

    Its Chairman, Sikirulai Ogundele, told The Nation that the party was determined to return to power in 2019, hence, it has zoned the ticket to the Ijebu/Remo axis early enough to enhance adequate preparation. He added that the Ogun PDP “can’t afford to gamble with Yewa agenda” in 2019.

    The former Chairman of Ifo Local Government Area said the decision was arrived at after many strategic meetings. The decision paves the way for an unnamed governorship aspirant from Ijebu who is perceived to possess the potentials to bring the PDP back to power in the next dispensation.

    But The Nation gathered that the particular aspirant is a House of Representatives member, Ladi Adebutu, who is representing Remo North and Sagamu Federal Constituency.

    A chieftain of PDP, who does not want his name in print, gave an insight into why the party elected to settle for Adebutu, the son of a billionaire philantropist and business magnate, Sir Kessington Adebutu.

    He said: “When we lost the election in 2011 and 2015, we went to the drawing board to examine why we lost in the two instances and then got some answers. And on the basis of that we set criteria for a would-be governorship candidate in 2019.

    “We considered the popularity of the person, his financial buoyancy, his credibility and how all these would impact on the party’s chances of returning to Government House in 2019. If you watch closely, the cap fits Ladi Adubutu.”

    He also explained the rationale behind the zoning of the ticket to the Ijebu/Remo axis, rather than continuing to stick to the earlier decision to give it to the Yewa/Awori people. He said: “I have said it that we want to return to power in Ogun State. The year 2011 was an opportunity for the party to produce a governor from the Yewa/Awori axis, but two candidates emerged from there and the party lost.

    “Again, 2015 offered another opportunity, but the chance was also lost due to similar circumstances. So, after watching the political signals from that area, it is obvious that they are neither ready to be united nor prepared for that office.

    “We can’t afford not to be in government come 2019, because of the insensitivity of the present administration to the plights of the people. The good people of Ogun State can’t endure this ‘penny wise, pound foolish’ style of governance in Ogun.

    “The Yewa/Awori agenda can’t take us there in 2019. In 2011 and 2015, a good number of the voters in Ogun West Senatorial District did not vote for the PDP candidates from that area. We are moving away from Yewa/Awori this time.“

    But the Ogun West appeared more determined and willing to make sacrifices that may ensure the success of their long held dream.

    Former Special Adviser on Youth and Sports during Gbenga Daniel’s administration, Mr. Raheem Ajayi, said it is sad that an area that has been the cash cow of the state has not gotten the chance to produce a governor, despite repeated attempts. He said the Yewa/Awori region is home to many industries in the state.

    Ajayi, who hails from Imasayi, Yewa North Local Government Area, added that the region had repeatedly supported people from Ijebu, Remo and Egba to produce governors in turns, but wondered why same support could not be extended to a Yewa/Awori son or daughter in 2019. He appealed to the Egbas, Ijebus and Remos to back a candidate from Yewa/Awori region to become governor in 2019, in the spirit of fairness, equity, justice and democracy.

    Ajayi said: “The good people of Yewa/Awori are now more determined to get it right this time around. We are poised to getting one of us elected as the governor in 2019. We supported the late Chief Olabisi Onabanjo, an Ijebu man in 1979; he was elected and got re-elected in 1983.

    “We also supported Chief Olusegun Osoba, an Egba man; he was elected governor in 1992 and got elected again in 1999. With our support, the Remo people also got the opportunity of having one of their own elected as governor in the person of Otunba Gbenga Daniel. He was elected in 2003 and re-elected in 2007.

    “Yet, another Egba man, Senator Ibikunle Amosun, also got our support to become governor in 2011 and he was also re-elected last year. The appeal is to all genuine lovers of democracy, fairness and equity in the state to support us to get ‘the elusive’ seat.”

    Adebayo Sheriff, Chairman of Ogun West Liberation Movement (OWELIM), a socio-political group working for the actualisation of the Yewa/Awori agenda in 2019, said the group is already having sensitisation meetings with market women, artisans, community leaders and other stakeholders to drum up support for their cause.

    According to Sheriff, OWELIM’s efforts have started yielding dividends, as the President, Awori Native Coalition (ANC), Chief Prince Oye Taiwo, has not only thrown his weight behind the project, but has also pledged to reach out to his Awori people in Ota Aworiland. He said: “This is a sign of good omen for the governorship aspiration of the area. Before now, it was difficult, if not impossible, for Yewa people and the Aworis, two of the major ethnic groups that constitute Ogun West Senatorial District to speak with one voice regarding the district’s governorship agenda.”

    The renewed quest for the Yewa/Awori agenda might not be unconnected with earlier calls by the paramount ruler of Yewaland and the Olu of Ilaro, Oba Kehinde Olugbenle, on his people to work selflessly for the unity and progress of Yewaland.

    Olugbenle urged the people to take a critical appraisal of their current situation and position in the scheme of things in Ogun State since its creation. He advised them jettison acrimony to enable them move forward politically. The monarch said until they come together and the focus fixed on the task ahead, they may not be able to break the jinx in 2019.

    The Olubara of Ibaraland, Oba Jacob Omolade, also re-echoed the same sentiment. He said the time has come for the Yewa people to occupy the governorship seat at Oke-Mosan Governor’s Office come 2019, warning that the opportunity should not be allowed to slip off again this time around.

    According to him, other zones that had produced governors in turns are watching to see whether the Yewa people will repeat the mistakes of the past in 2019.

    With the PDP’s mind already made up, regarding where its candidate would come from, would the ruling APC zone its ticket to the Yewa/Awori axis? Only time will tell.

  • ‘Power sector revenue loss may hit N809b’

    ‘Power sector revenue loss may hit N809b’

    Should the lull in power supply persist, the sector’s revenue loss will be about N809.8 billion by next January, the Executive Secretary, Association of Nigerian Electricity Distributors (ANED),  Sunday Oduntan, has said.

    Besides, payment for electricity bills has fallen substantially as only 35 per cent of consumers pay   yearly.

    The loss in revenue was caused by problems, such as non-payment of bills by consumers and failure of the power distribution companies (DisCos) to pay the power generation companies (GenCos) in time,  among others.

    The Nation gathered that the sector loses between N10 billion and N15 billion to a wide range of   industry problems, such as pipeline vandalism, low level of water at the hydro power plants, erratic power supply, and inability of the consumers to pay their bills, among others.These problems have contributed to the erratic power supply in the country.

    Oduntan in a telephone interview with The Nation said the sector would be losing N809.8 billion by January, next year, if there is no improvement in the operation of the industry.

    He said the sector had recorded a shortfall in liquidity of N383.2 billion between 2013 and 2015, adding that the figure would increase as Nigeria’s economy continues its abysmal performance.

    Oduntan said: “Between November 1, 2013, when the new investors took over the unbundled assets of the Power Holding Company of Nigeria (PHCN) and December 2015, the sector lost revenues of about N383.2billion. This is the loss recorded by the sector in two years. This is lower than the total loss of N809.8 billion, which the industry will incur between December 2015 January 2017 if the industry continues to grapple with its problems.

    He said losses accruing  to the sector were substantial, adding that it would be difficult for the industry to recover the loss soon going by the numerous challenges facing it.

    According to him, the power generation companies, the electricity distribution, and others at the value chain, have suffered losses. He stated that the loss in revenue would continue if urgent steps are not taken by the Federal Government to improve the operating environment.

    Oduntan also said 30 per cent of the electricity consumers pay their bills yearly, stressing that the issue has impacted negatively on the operation of the sector.

    He said: “Consumers on average pay N2,000 out of N5,000 monthly bills DisCos have charged them. Cases abound where many consumers do not pay anything.  A research conducted by the association shows that less than 40 per cent of consumers in Nigeria pay their energy bills. The issue has further compounded the woes of the power firms and the economy in particular.”

    The industry, Oduntan said, is battling liquidity problems following the loss in revenue recorded in the past five years. He explained that the problems in the sector are in stages because they do not come once, stressing that the operators are badly affected.

    Also, the Chief Executive Officer, Frontiers Oil Limited, Mr. Thomas Dada, said the loss cuts across every aspect of the sector. He said gas suppliers are counting their losses too due to problems in the industry.

    He explained that pipeline vandalism has ripple effects on the sector because every operator in the value chain is affected by the development. “Both the producers and suppliers of gas used in generating electricity have lost huge revenues to pipeline vandalism. Whenever pipelines are vandalised in the Niger Delta region, producers and suppliers of gas count their losses. On several occasions, they incur double losses while trying to stay in business,” he said.

  • Forex threatens power production

    •Equipment cost soars by 90 per cent

    The imbalance in the foreign exchange (forex) market has hindered smooth operation by the nation’s power sector as dollar exchanged for about N470 at the parallel market, The Nation has learnt.

    Despite the implementation of the flexible exchange rate mechanism that allowed for sourcing of forex from multiple sources, operators in the sector are battling scarcity of dollars.

    It was gathered that firms, on account of high exchange rates, are unable to repay the loans they took to buy the assets of the Power Holding Company of Nigeria (PHCN) in 2013.

    Also, it is difficult for the firms to get enough dollars to import meters, transformers, and other materials needed to meet their obligations to customers.

    Industry sources said operators may be forced to further prune down the cost of operation if naira continues its free fall amid the recession in the economy, by downsizing the workforce and reducing output.

    The Group Leader Generation, Sahara Power Group, Micheal Uzoigwe, said the lopsidedness in the exchange rate was affecting activities in the industry.

    According to him, the high cost of foreign exchange has resulted in price increase of spare parts by 90 per cent. He  added  that the issue was having ripple effects on the sector and the economy,  explaining that output in the value chain has reduced to an abysmal level due to high cost of obtaining dollar in Nigeria.

    Uzoigwe said: “Getting enough dollars for transactions and achieving optimal capacity is a problem to electricity generation companies (GenCos). The reason is because the price of gas is denominated in dollar and that power generation companies are unable to get enough money to buy the product. He said firms were paying N165 per unit of gas two years and they are now paying between N460 to N470 for the same unit of gas in 2016, then there is a problem.

    “Two things are likely to happen. First, the GenCos would not be able to get enough millions of cubit of gas for generation. Secondly, the firms would find it extremely difficult to break even in the industry.”

    Uzoigwe said Sahara Power Group, bought Egbin power plant for $400million in 2013 when dollar exchanged for N165, adding that the Group now pays a lot to service the debt.

    “We at (Sahara Group) bought Egbin Power Plant for $400million few years ago. The Group took loans from the banks to buy the plant. Now we are repaying the loan. Given the fact that the value of dollar has increased greatly, the Group is paying more money to service the debt. The additional money that is being paid on the debt would have been channelled to a more productive usage,” he added.

    Also, the Chief Executive officer, MOMAS Nigeria Limited, Mr. Kola Balogun said operators across the value chain are struggling to survive in the face of bad economy.

    He said the woes of the operators have been compounded by the rise in the value of dollar in recent times, adding that companies are not recording growth because Nigeria runs an import-dependent economy.

    He said many operators in the sector rely on accessories imported from abroad for production, stressing that they spend a lot of money on production when cost of importation is factored in.

    Balogun asked: “Are we to talk of gas that its price is denominated in dollar? Are we to talk of pre-paid meters, sub-station equipment and other tools that are imported? Are we to talk of money spent on seeking partners abroad by power firms?”

    Balogun, whose firm manufactures meters said indigenous meter producers are having problems despite the fact that they are sourcing 60 per cent of their materials locally.

  • ‘Govt needs N3.25t to generate 20,000Mw of power’

    The Federal Government requires $20 billion (about N3.25 trillion) to provide 20,000 megawatts (Mw) of electricity by the year 2020, the Managing Director of KAIROSTS Nigeria Limited, a financial advisory firm, Mr. Olajuwon Olaleye, has said.

    Olaleye, who was an aide to the former Minister of Power, Prof Chinedu Nebo, said the sector would receive new impetus when the National Assembly approves the appointment of the Chief Executive Officer of the Nigerian Electricity Regulatory Commission (NERC) and other key officials, adding that the government expects the Senate to expedite actions on the process soon.

    Olajuwon in an interview with The Nation said the appointment of officials of the Commission and other agencies in the sector are crucial to the government,  as it would impact on the sector positively.

    He said Nigeria needs $1million to generate megawatts (Mw) of electricity, which means that the country would be spending $20billion to provide 20,000Mw of electricity.

    He said the country was in a critical financial position and that it would need to raise funds through Foreign Direct Investments (FDIs) and signing of agreements with donor agencies in Europe and America to be able to provide 20,000Mw of power and further improve supply.

    Olajuwon, an adviser on Investments, Finance and Donor Relations to Prof. Nebo during his tenure as the Minister of Power, said it had become imperative for Nigeria to partner donor agencies abroad, in order to finance the sector in view of the recession plaguing the economy.

    Olajuwon said: “There is no doubt that Nigeria is in a very critical situation financially and would need to partner donor agencies and foreign investors in order to finance key infrastructural projects in the petroleum and power sectors. Once this is done, activities would be galvanised in areas such as power generation, distribution and transmission.”

    He quoted the Minister of Finance, Mrs. Kemi Adeosun,  as saying at the ongoing World Bank conference in Washington, United States, that the country needed money to finance its power sector and others that were germane to the growth of the economy.

    “The Finance Minister, Adeosun, last week in Washington, overtly or covertly expressed the desire of Nigeria to welcome foreign investors and institutions that can raise fund to finance the economy, especially the power sector.  This shows that Nigeria needs external funding sources to bring the economy, nay the power sector back to life,’’ he said

    In a related development, former President, International Association of Energy Economists (IAEE), Prof Adeola Akinnisiju, said money needed to be injected into the electricity sector to make it viable.

    He said power industry survives in developed economies such as the United States, Europe and others because it is well managed and also boasts of good managers.

    “When money is properly channeled into the power sector, coupled with good management, the industry will perform optimally and generate enough electricity for the country.  The sector is in a comatose because problems exist across the value chain – generation, distribution and transmission,” he said.

  • Fashola: ‘Power belongs to God’

    Babatunde Raji Fashola, the amiable former governor of Lagos state and the man whom President Muhammad Buhari has saddled with the enormous responsibility of overseeing three critical ministries of Works, Housing and Power, was in Ilorin, Kwara State this penultimate week.

    For me, it was an opportunity to meet once again, a man with whom I had worked closely with while in Lagos and serving as the chairman of the Nigerian Union of Journalists (NUJ) in that unique state of aquatic splendour. And from the interactions, it was evident that BRF, as he was to be eventually branded by the people of Lagos, has not changed much; particularly in terms of his commitment to working things out, literally drawing out water from the rocks. He has grown older, of course he has advanced in age but this type of ‘growing older’ is the one facilitated by exposure to the pressure of work, work and work. And when you notice that the man has been much traduced by political naysayers; when you consider the weight of opposition that accompanied his emergence as a federal minister and the burden that has been placed on his shoulder; you can only commend him for how far he has gone.

    Let me share this: there is this cartoon that went viral some months back. It was a drawing of President Buhari and BRF. Buhari, ever to the point, faced his Minister of Power and asked, ‘Fashola, what happened to Power?” Well, if you expect the Minister to answer the way a former IGP answered an almost similar question when the then Military President, Ibrahim Babangida asked, “my friend, where is Anini?”, then you got it wrong. Trust the Nigerian sense for the comical, BRF, in that cartoon, simply replied his boss: Power Belongs to God!

    Yes, power belongs to God. He gives and takes it from whom He wills. It is a message that celebrates the essential BRF.

    But beyond the theological, that cartoon encounter also exposes the kind of pressure that has come to bear on the minister. His boss, the President, wants results and he needs results because that is the gauge people would use to measure his performance in office. And if there is one area where Nigeria looks for urgent results, it is in the area of power.

    And to be candid, Fashola has been up and doing since he assumed office only that as the Yoruba would aptly put it, the hen’s feather would not allow anyone to notice that bird also sweats.  During his visit to Kwara, BRF visited my boss, Governor Abdulfatah Ahmed. And from the report he gave to the governor; he submitted a DVD report, uncommon in this clime;   we only need to extend our hands of support to the man in order to achieve what he has set out before him.

    According to Fashola, if you live in Kwara or have had reason to pass through the federal road called Ilorin-Jebba-Mokwa, going to the north, you will know that travellers spend weeks, at times, before getting to their destinations, yet that road is a very important strategic road for agriculture. Statistically, Fashola said on daily basis, not less than 5,000 trucks pass through that road and about 18,000 small vehicles. Imagine having even only 500 trucks and 2,000 smaller vehicles stranded on a road on a single day. Yet that has been the experience which the Federal Government is committed to change, according to the report from BRF.

    That section of the national road was his first port of call upon landing in Kwara. Now with contractors back to site for repair and rehabilitation, the time spent on the road has drastically reduced. And that is the beauty of democracy, as the minister himself said it:”This is what democracy really means to those people. That is why they voted so that one day a journey of an hour will no longer take them one week.

    He also talked about efforts in the power sector. Let me quote him: “The only matter that I’m sure interests and concern the people of Kwara State as it does other parts of Nigeria is power. We have set out a very simple roadmap where we have identified the problem. We don’t have enough power as a country, so we must get more. So, the first leg is incremental power. The second leg is to stabilize power and the third leg is uninterrupted power. The first leg is largely everybody’s responsibilities. It’s the responsibility of the government and the responsibility of the citizens. So we are expanding opportunities for power; we are signing solar agreement; we are starting solar project; we are looking for power from coal; we are trying to resolve the gas issues; we are developing more hydro capacity. Right now, most power we are using is coming from the hydro power plants and we are going against the odds from about 2,000 to about 3,500 megawatts.

    “Yes it is true that the rains have helped, that’s what hydro energy is about; more water means more power and off peak when there is no water there is less power, because that is the energy that drives the electrical parts of the generating plant. But what is unsaid is the fact about maintenance, repairs that we started which has improved the amount of energy that we can get from those hydro plants. Before now, even though the rains were there, we couldn’t get more energy. Now we are getting more energy because we are fixing turbines, we are maintaining parts; we are getting close to 400 extra megawatts from those hydro plants, which was not there to be taken last year.  We are also talking to the gas people; the communities that are angry, and when all of that come together and we merge that with the gas outage which is about 3,000 megawatts, the prospect for more reliable and increase power clearly lies ahead. And I know those communities will not be angry forever.”

    Power belongs to God. But he has allowed BRF to be in charge of generating and supplying electricity to Nigerians under the current government. And from his accounts, he is walking the talk, as the ruling party promised during electioneering campaign. Right now what the minister needs is our prayers and support to make his efforts in the works and power sectors successful.

    BRF needs to be commended for creating synergies between state governments and the federal seat. For instance, Governor Ahmed made the minister to realise that “in 16 years, the visit by BRF was the first time a federal minister would sit down to discuss issues of road and power with the state”. An excited Ahmed said while responding to the progress report from Fashola: “This is the first time any representative of the federal ministry of works will come and sit with us, review the status of our road and work out strategic ways to get them to the levels that will be beneficial to us and the economy. We’re very excited and are happy. We thank you so much for this”.

     

    • Oba writes from Ilorin, Kwara State.
  • Power generation rises to 3,523Mw 

    Power generation rises to 3,523Mw 

    The Nigerian Electricity System Operator (SO) yesterday said power generation stood at 3,102megawatts (Mw) on Tuesday, 3,214 Mw on Wednesday and rose to 3,523Mw yesterday. The pwoer generated was sent to the 11 distribution companies (DisCos).

    Its Operational Report said peak generation of Wednesday was 3,682Mw while lowest generation for the same day was 2,947Mw.

    The SO noted that the highest system frequency on Wednesday was 51.50HZ, lowest system frequency was 34.90HZ while highest voltage recorded was 300KV.

    According to a record of the power generation that was sighted in Abuja yesterday,  the three hydro power stations, produced 1,188Mw on Wednesday. Kainji generated 199Mw, Jebba 426Mw and Shiroro 563Mw while 16 gas power plants  generated 2,027Mw. Nine plants recorded 0Mw production on the day under review.

    Egbin generated 391Mw, Sapele generated 62Mw, Delta 244Mw, Geregu 75Mw, Omotosho 120Mw, Geregu NIPP 105Mw, Sapele NIPP 102, Alaoji 106Mw, Omotosho NIPP 73Mw, Odukpani NIPP 58Mw, Ihovbor NIPP 94Mw, Okpai 397Mw, Ibom 50Mw, Omoku 28Mw, and Para Energy 28,93Mw.