The Nation Newspaper

Tag: POWER

  • Power and the South Korean example

    ‘You only have power over people so long as you don’t take everything away from them. But when you’ve robbed a man of everything he’s no longer in your power–he’s free again’ – Alexander Solzhenitsyn

    There is something quite instructive that power mongers in Nigeria and other Third World countries must learn from what happened recently in South Korea. The country’s Prime Minister, Chung Hong-won, resigned from power amidst public outrage over his leadership’s perceived slapdash handling of the Sewol ferry disaster. The Sewol ferry sank on April 16, with only 174 people out of the 476 on board reportedly rescued. Equally sad is the fact that majority of the passengers were students and teachers from Danwon High School in Ansan, a city near Seoul. This, no doubt, means that a large chunk of the trustees of the posterity of South Korea was destroyed in that ugly incident.

    This conduct of voluntary official resignation is surprising because such a patriotic act is uncommon where yours sincerely emanated from. Thus, it was bemusing to see contrite Chung in a televised address declare on behalf of the government he served: “As I saw grieving families suffer with the pain of losing their loved ones and the sadness and resentment of the public, I thought I should take all responsibility as prime minister…There have been so many varieties of irregularities that have continued in every corner of our society and practices that have gone wrong. I hope these deep-rooted evils get corrected this time and this kind of accident never happens again.”

    He went further: “The right thing for me to do is to take responsibility and resign as a person who is in charge of the cabinet.” The South Korean embattled prime minister underscored his empathy for human life when he finally retorted that the “cries of the families of those missing still keep me up at night”. Well, some pundits might not see anything extraordinary in what Chung did because in South Korea, prime ministers are often fired when the government takes responsibility for major disasters. But his latter declaration merely shows the conscience and humanity in him; otherwise, he would not have agreed to be the fall guy let alone take “all responsibility” by resigning from his plum job. Chung is not just leaving the job, President Park Geun-hye has instructed he leaves after clearing the mess from the ferry disaster.

    After a bout of reflections over this laudable occurrence in far-away South Korea, my mind wandered over the egregious corruption and intractable Boko Haram-led abductions and killings going on in this country without meaningful official panacea. Quite vividly, this column reflects on the attack, sometime, of Federal government Girls College in Yobe State, where lives were lost, properties burnt and several students and teachers kidnapped. Adamawa State is not left out of these gory tales while Borno State remains the centre-stage of mind-boggling Boko Haram pogrom. Currently, the country is still agonising over the abduction of over 234 girls in Chibok area of that state. Yet, the administration of President Goodluck Jonathan looks so confused that it has not offered any meaningful solution to the problem. The teenage girls abducted while writing their WAEC examinations have not been released and the president doesn’t realise that he lacks the moral right to remain in power. This singular act of his makes me doubt whether he listens to foreign media like the CNN, Al-Jazeera and even SkyNews. Otherwise, he would have known that he has since lost his legitimacy to continue in power.

    Rather than come up with effective solution that could bring lasting peace into the country, the president is presently ingrained in the dirty politics of his re-election. He was in Kano and Ibadan to do ‘azonto’ dance while parents and families of the abducted girls and victims of the Nyanya bomb blast are in serious pain and agony. Under similar circumstances, someone in South Korea has resigned for badly managing a national disaster.

    The president, because of his enormous powers, does not feel the pains being felt by other Nigerians. What has been happening is to see presidential aides defending the presidency’s intolerable indices of crass ineptitude and other unpardonable errors as if defending their inalienable inheritance. Their paymaster must have forgotten that power is transient. The president would never consider resignation because he has been intoxicated by power. After all, Edmund Burke, a great philosopher and thinker of British ancestry, once observed that though powerful men ‘may be distressed in the midst of all their power but they will never look to anything but power for their relief.’ That is what Dr Jonathan is doing, which is peculiar to the leadership attitude in Third world countries. Such leaders according to Stephen Vincent Benét thought that because ‘they had power, it amounted to wisdom.’

    So sad, what we have in Nigeria is buck-passing because no government official believes he should be sacrificed for systemic rot that supersedes his/her coming to power. In every disaster, rather than toe the path of honour, the nation’s leadership sees the hands of political opponents in every disaster that befell it. Such leaderships as we have today and perhaps in the past are paranoid, despite their obvious ineptitude. This is one salient reason we have a system in which citizens are penalised for honesty and as such, everyone has learnt to lie to power through nauseating flatteries.

    A sinking government in Nigeria might not embrace the South Korean example because truth is silently interred in the corridors of power with no one being ready to courageously exhume it. And that is the tragedy of power under the Nigerian situation which has given birth to the death of genuine feeling; the dearth of inspired response and the flight of awareness that make it possible for most men of power to feel in their veins, the pains/miseries of other men. The Nigerian leadership has eyes and still cannot see. It has overtime, under this ruling party, grown so callous and yet unashamed. The president, except for the flight of honour, should see reason for common sense, common honesty and common decency – not the pursuit of 2015 elections and how to strategise on his return to power. Dear President Jonathan, a word, it is often said, is enough for the wise!

  • Embrace power reform, SMEs told

    Embrace power reform, SMEs told

    Chief Executive Officer of Stanbic IBTC Holdings Mrs Sola David-Borha, has called on small and medium scale enterprises (SMEs) to tap into the power sector reforms for business growth. She made the call at the seventh Lagos State Economic Summit where she was a panelist at one of the sessions on power sector funding.

    She said: “The power sector reforms have presented a huge opportunity for start-ups and SMEs to explore for growth. There is a supply and infrastructure gap in the power sector that small business owners can plug to their benefit. “For instance, the distribution and generation companies would need metres, cables, electricity poles, payment cards, among others, which can be readily handled by small businesses.”

    She said the government’s determination to ensure the success of its privatisation process and the local content policy, which ensures that local businesses are not overlooked, are positive pointers to encourage investment in the sector.

    Mrs David-Borha said the reforms and the enormous growth opportunity in the sector make it easier for financial institutions to finance SMEs involved in the power sector. “I am hopeful that even when there are challenges in the power sector, the government will step in to address whatever needs to be done because there is so much at stake to allow the sector to fail,” she said.

    Mrs David-Borha said smart pricing is critical to the power sector transformation. “There have been calls for right pricing, but I would add that with smart pricing, everything will fall into place,” she said.

    She said the bank will continue to leverage on the rich heritage and know-how of the Standard Bank Group to support the reforms and the sector by providing both debt and equity in the right balance and by attracting foreign investors into the country.

    She said post-acquisition financing is always less risky than acquisition financing because then the cash flow situation is known and the financier can perform accurate valuation and due diligence.

    “Many promoters, the new owners of the power assets, raised debt and call it equity, but what we are doing is both debt and equity,” she said.

     

  • Bayelsa explains power crisis

    * Says no deliberate plot to punish some areas

    Bayelsa State Government on Monday said ongoing repairs of the Kolo Creek Turbine were responsible for the energy crisis in the state especially in some local government areas.

    The government convened a press conference in Yenagoa where it clarified some issues following insinuations that the administration was deliberately denying some areas electricity.

    Some areas in Nembe, Southern Ijaw and Ogbia which depend on the turbine for electricity, including Otuoke, the community of President Goodluck Jonathan, have been in darkness for some months.

    But the Commissioner for Energy, Francis Ikio; Special Adviser on Energy, Olic Kemenanabo and the Chief Press Secretary, Mr. Daniel Iworiso-Markson, took turns to reel out facts behind the crisis.

    Ikio said the faulty component of the turbine known as Gas Generator has been undergoing repairs in Vancouver, Canada.

    Explaining that the component was being repaired by its original manufacturers, Ikio hinged the delay in delivering the equipment on technical reasons.

    Reading from a volume of progress report on the equipment sent to the state by the company, the commissioner said the faulty equipment would be ready for test-running in May 26, 2014.

    He assured the people of the state of the government’s commitment to their welfare insisting that the administration would not play politics with the development of the state.

    Sympathizing with areas heavily affected by the crisis, he described persons accusing the government of deliberately punishing and marginalising some communities as mischief makers.

    He recalled series of times the component was refurbished in the past and said the current repairs would turn the gas generator to a new one.

    “This government is serious and focused. There is no marginalization or intention to punish anybody. We know the importance of power and we cannot afford to play politics with it”, he said.

    Kemenanabo who provided further insight into the problem, said the administration inherited a moribund turbine.

    According to him the present government took over the turbine at a time it could only generate six megawatts of electricity instead of its 20 megawatt capacity.

    Describing the gas generator as the engine of the gas turbine, he said the equipment was first repaired in 1999 after its original installation in 1985,

    He said after the repairs, the gas generator began to function as a new one and lasted till 2006.

    But he recalled that it was sent to another vendor, Alba Power, for repaiforgot the second time instead of the original manufacturers.

    He said: “The second case was when it was sent out for repairs but not to the original manufacturers. It was through a vendor whose name is Alba Power. It repaired and returned it. From the date of commissioning, it was obvious that there were many cracks on the machine.

    “This same machine ran only about two and half years and it was already collapsing before this administration came on board. When the government came into power, the government in his wisdom established a committee to appraise existing and new proposals for gas turbine.

    “We thought it wise to carry the gas generator back to the original manufacturers. That generator was sent out at about December 20, 2013. From that day there was no space to move it into the repair shop of the company in Canada. The machine was conducted into the shop in January 19, 2014”.

    On why the government decided to refurbish old turbine instead of considering proposals for new ones, he said it was foolhardy to discard a turbine because of a faulty component.

  • FG to rehabilitate 30 Dams to Boost Power

    The Federal Government has concluded plans to rehabilitate about thirty dams to boost power supply.

    The dams, recommended by the Ministry of Water Resources, are expected to generate additional 147.60 mega watts to the existing power source.

    Minister of Water Resources Mrs. Sarah Ochekpe who made the disclosure in Abuja during a briefing said access to electricity is put at forty per cent.

    The minister, who was represented by Director, Dams and Reservoir operations in the ministry, Dr Emmanuel Adanu explained that while constructing dams in the past and recently for water supply and irrigation it constituted small hydro power plants in the construction processes.

    According to her, the ministry has partnered energy sectors to conduct studies on the proposed dams and engineering designs of the small hydro power schemes accompanying each of them.

    She said this was to serve project activities and generate electricity to rural communities, adding that the supply of water and energy are important to achieving sustainable national development.

    “In Nigeria, statistics have shown that shown that only forty per cent of the people have access to electricity, sixty per cent of the population has access to safe drinking water while access to sanitation is put at forty one per cent.

    “As part of integrated river basin development, the Ministry and some RBDAs while constructing dams in the 1980’s and recently for water supply and irrigation, incorporated small hydro power plants to generate electricity to serve the project activities and the host of rural communities.

    “Based on the collaboration between the Water and Energy sectors, Federal Ministry of Power conducted the feasibility studies and engineering design of some of the small hydro power schemes mentioned above for rehabilitation and concession to boost electricity supply in Nigeria.

    “No nation can develop without adequate supply of water and energy. Demand for water will continue to increase significantly over the coming decades. The need for increased collaboration and cooperation between the agencies and stakeholders in the water and energy sectors can not be over-emphasized.”

     

  • Importing power

    Importing power

    •Someday, we’ll import presidents!

     

    THe news came with bold, if not alarming headlines on the front pages of national newspapers last week. It said that Nigeria may have found a remedy to her seeming intractable power headaches; she would soon begin to import electricity from the central African state of the Democratic Republic of Congo, (Congo DR, formerly Zaire).

    Though information was limited and scanty on such a major strategic move, the Minister of State for Power, Mohammed Wakil, who made the revelation at an investors’ conference organised by the Transmission Company of Nigeria (TCN) in Abuja last week, noted specifically that, “Nigeria is in bilateral and multilateral relationships at various stages of advancement with other governments for the importation and exportation of power. For example, Nigeria has signed a MoU (memorandum of understanding) with Democratic Republic of Congo for the importation of electricity from the Inga Dam Power Plants for both local consumption and export to other countries.

    “The Inga is envisaged to exceed 40,000 mw on full exploitation. TCN network spreads to all parts of the country and across the border to some neighbouring countries to form part of the West African Power Pool, (WAPP). With the realisation of Inga and other initiatives, Nigeria will become a regional hub in international electricity trade, exporting large swathes of internally generated as well as imported power to WAPP countries”.

    Most Nigerians who are for decades, hapless victims of what has become Nigeria’s electric power conundrum would only chuckle cynically at Minister Wakil’s seeming oversized ambition. Since the current civilian dispensation in 1999, successive Peoples Democratic Party (PDP) governments have been embroiled in efforts to provide the populace a modicum of reasonable electricity supply but the harder they try, the worse the power supply situation gets. Of course, the situation not helped by a mixture of rampant graft, ineptitude and a total lack of patriotic zeal has left Nigeria in more prolonged darkness today than before 1999.

    Former President Olusegun Obasanjo’s eight-year rule supposedly spent billions of dollars on power projects billed to generate at least 10,000 megawatts by 2007. But by the time he left office, generation had dropped below the old level of about 3,000 megawatts. The Goodluck Jonathan administration, after pumping even more dollars into the power cesspit, eventually privatised the generating and distribution arms, a process that was completed November last year. If anything has changed for the consumers, it is the fact that service has worsened as outages have become persistent and longer.

    The lingering troubles seem to obviate the suspicion that the divestment was less than transparent and that party stalwarts may have hijacked the process. The new owners, it has been revealed are badly exposed to banks and do not have new funds to invest. Therefore, they cannot add much value. We are still bedevilled by the perennial problems of low water level at the dams during the dry season, breakdowns at the antiquated thermal plants and more recently, lack of gas supply and vandalism.

    For about a decade now the gas brouhaha has lingered. Some gas-powered plants have been built without the provision for gas; thus a few plants like Geregu are ready and no gas to fire them. Transmission has also remained an albatross as improvements are not made on infrastructure network over the years. Today, Nigeria’s electricity generation, transmission and distribution is in a miasma. At the lowest ebb; yet we speak so glibly about importing power.

    It is under this confused milieu that we are signing a MoU with Congo DR to import electricity. Several questions are begging for answer: are we handing over our strategic national facility to another country? How much are we going to invest? What is the cost of transmitting power across about five countries? Are we not perturbed that we are already importing petroleum products from Cote D’Ivoire and Niger Republic; we also import most of our staple food, do we have to import power too? How come Nigeria, the ‘giant of Africa’ is the one importing power? What else are we going to import?

  • Ikeja Disco invests N600m in power supply

    Ikeja Disco invests N600m in power supply

    •Ibadan firm restores metering scheme

    To improve power supply, the Ikeja Electricity Distribution Company (IKEDC) has injected about N600million into its operation.

    Its Managing Director/Chief Executive Officer, Abiodun Ajifowobaje, said at the firm’s customers’ forum in Lagos that this was a quick intervention to ensure short-term customer satisfaction.

    The management, he said, was continuing with its long term plan for sustainable electricity supply.

    He explained that the essence of the forum was to create mutual interaction between the firm and its customers, and to identify areas that would enable the company serve the customers better.

    He said the forum would be held regularly as a communication window and feedback mechanism.

    He said: “We conduct customers’ forum in all our business units so that we can use the opportunity to meet with them and tell them what we are doing and our plans for the future. We also want to create a two-way mutual interaction aimed at finding ways to improve service and serve our customers better.

    “Our board under the quick win-win intervention, approved about N600 million for us to do all projects including metering, inauguration of on-going transformer projects, replacement of vandalised transformers, re-metering and also do some overhead line clearance, which often cause network disability.”

    Ajifowobaje also said about 30 transformers had been installed to cushion electricity supply, and about 115 transformer installation projects were on-going and would be completed within the next one month.

    He said about 30 transformers parked up, while about 42 were vandalised before the new management took over last November, adding that all the bad transformers had been repaired.

    “The Board has approved installation of some transformers under what we call ‘win-win’ approach to address customers’ complaints and to replace all the bad transformers. Going forward, we will be repairing all bad transformers and reinstalling them, as well as completing all pending transformer installation projects in all sites within the network. With all these, we assure customers within our network of stable power supply when completed.

    “Our technical partners have commenced evaluation of meter system and very soon, we will come out with very robust metering system, but pending the completion of this arrangement, the company is installing meters for customers who have paid for meters.

    “About 6,000 customers have paid for prepaid meters and we have commenced metering them, while we also target about 7,000 customers to be metered by next month,” he said.

    He appealed to customers to alert the management of any suspicious movement from anybody, adding that protecting the equipment would help to ensure stable power supply.

    He said the management of IKEDC sought the assistance of the Nigerian Army, State Security Service, Nigeria Security and Civil Defence Corps, Nigerian Police and the state government in protecting its equipment.

    Meanwhile, the Ibadan Electricity Distribution Company (IBEDC) has revitalised its Credited Advance Payment for Metering Implementation (CAPMI) scheme to hasten the metering of customers’ houses.

    Its spokesman, Tokunbo Peters, explained that under the scheme, which was first introduced by the Nigerian Electricity Regulatory Commission (NERC), customers who make advance payment for meters would be attended to within 45 days from the date of payment.

    The amount advanced by customers for the meter would be refunded with a nominal interest over a period of not more than three years through rebate in the monthly fixed charge component of their electricity bills, he said.

    He encouraged customers on estimated billing and prospective ones to visit their office and apply.

    “The revitalisation of CAPMI scheme is a demonstration of the company’s commitment to metering all its customers and ultimately eradicating estimated billing in its entire franchise area,” he said.

    Ibadan DISCO area is Ogun, Oyo, Osun and Kwara states, as well as parts of Ekiti, Kogi and Niger states.

     

  • ‘How to meet 10,000Mw power target’

    ‘How to meet 10,000Mw power target’

    To meet the 10,000 megawatts (Mw) of electricity target by next year, the Federal Government requires about three million standard cubit feet of gas daily (mmscf/d) to fire the turbines across the country, experts have said.

    The Chief Executive Officer, Niger Delta Exploration and Production Company (NDEPC), Lai Fatona, and the President, Petroleum and Technology Association of Nigeria (PETAN), Emeka Ene, said the only viable option to improve electricity supply is to provide the plants with the required volume of gas.

    Fatona said the cubit of gas needed to place the plants in utmost capacity is in millions, adding that 200,635 standard cubit feet of gas is needed per day to produce 1,000 megawatts, while 2.635million standard cubic feet of gas per day would give the country 10,000 megawatts of electricity.

    He said: ‘’10,031 standard cubit of gas would produce 50megawatts; 20,063 standard cubit feet of gas would provide 100 megawatts; and 200,635 standard cubic feet of gas would be needed to generate 1,000 megawatts. To generate 10,000 megawatts, the power plants would need 2.635 standard cubit of gas.’’

    He said power generation companies must access gas constantly, if they want to perform optimally. He explained that infrastructure is inhibiting the growth of the power sector, arguing that inability to address the problem is affecting generation and distribution.

    Investment in infrastructure, he said, requires a paradigm shift to enable the government to meet the electricity needs of its people.

    Fatona said power firms must be discouraged from fixing the price of gas if the sector would record growth.

    ‘’Infrastructure is the major problem in the sector. As a way of addressing the problem, the utilities firms must be prevented from fixing the price of gas. They have no right fixing the price. The time has come for the companies to completely hand-off such responsibilities. They need to allow people to invest in gas infrastructure. When this happens, the firms would not have problems accessing gas for operation.’’ he added.

    Ene said 80 per cent of the power plants are gas-based, stating that they need un-impeded access to gas to survive. He said each of the turbines need certain amounts of gas to function well since they have different capacities. He said the turbines are designed to meet certain production targets, stressing that gas is critical to their success.

    He said there is enough installed capacity in power plants to increase electricity generation from 6,000 to 10,000 megawatts if enough gas can be supplied.

    He said: “What I know is that millions of standard cubit of gas would be needed by the turbines to function well. Due to the complex nature of their production, the turbines need volumes of gas to survive.”

    He advised the government and private operators to help in fast-tracking gas projects across the country, saying that such investment would boost the power sector operation.

     

  • TCN needs $7.7b to improve power

    TCN needs $7.7b to improve power

    The Transmission Company of Nigeria (TCN) says it need $7.7 billion to expand and improve the power situation in the country.

    Managing Director Mr Mack kast, in an interview with the News Agency of Nigeria (NAN) in Abuja yesterday.

    Kast said the TCN was working on a five-year expansion plan aimed at increasing the wheeling capacity to 10 gigawatt (GW) by 2017, 13GW by 2018, 16GW by 2019 and 20GW by 2020.

    “ What we are saying is that in the next five years, we will need about 7.7 billion dollars to expand our infrastructure and significantly improve the power situation in the country,’’ he said.

    He attributed the epileptic power to a drop in gas supply in the country, adding that the generating capacity dropped from 4,000 megawatts to 3,000 megawatts.

    Kast said the electricity supply chain comprised Generation (GENCOs), Transmission (TCN) and Distribution (DISCOs), adding that disruption to any of the segments would lead to epileptic power supply.

    “We have some generation issues, the TCN has the capacity to evacuate all the power being generated right now.

    “The generation capacity right now has dropped to about 3000mw. This keeps fluctuating on a daily basis due to vandalism and gas challenge,’’ he said.

  • ‘Power firms’ bonds prospects high’

    ‘Power firms’ bonds prospects high’

    Any plan by power investors to issue bonds in the future would be supported by the Pension Fund Administrators (PFAs).

    According to PFAs, bonds from the power firms will have better yields compared to other sectors.

    A Business Development Manager, Pension Fund Department, AIICO Insurance, Lekan Martins, said the sector has huge potential, despite its challenges.

    He said the PFAs will be disposed to investing in the power sector when the need arises. He said when the firms issue bonds in the future, they would make money for themselves and the investors.

    He said PFAs are seeking a review of the 2004 Pension Reform Act to expand their investment windows, adding that power sector bonds is one of their targets.

    Martins said the pension fund assets under the Contributory Pension Scheme (CPS) are expected to increase from N3.8trillion to N4.5trillion by December, adding that the assets would be bigger when there are bonds from power firms. The development, he said, would benefit the power firms and the PFAs.

    “The PFAs are eyeing investment in power by way of buying bonds issued by the utilities firms in the future. However, they are handicapped . To enable them invest in power and other sectors, they have taken up the issue of reviewing the Act with Pension Commission (PenCom). Proposals have been sent to PenCom on the issue. Stakeholders have held series of meeting.

    “In the course of our discussions with the firms, we realised that they need money. And bonds would be a better option. In the future, when the companies issue bonds, the PFAs would be interested in buying them.”

    However, an official of Stanbic/IBTC Pension Fund Department, Mrs Idu Okwuosa, said it was not true that pension fund administrators were planning to invest in power firms through buying shares.

    She said the PFAs are eligible to invest in infrastructure, adding that bonds issued to develop infrastructure could be patronised by the PFAs.

    An official of the Ikeja Electricity Distribution Company (DISCO), who spoke on condition of anonymity, said the power firms are sourcing for funds to improve their operations. The source said weak infrastructure is the bane of the industry, adding that the firms would leverage on available opportunities to raise money and improve electricity generation and distribution.

    The distribution firms, the sources said, were struggling to recover debts owed by consumers, adding that the development is affecting their operations.

    “The management of power firms are looking for opportunities to improve their operations.

    “They are reviewing various options available to them to increase their operational capital; they are ready to leverage on ideas with better prospects,’’ the source added.

  • Banks’ N320b romance with power

    Banks’ N320b romance with power

    About N320 billion of the N400 billion realised from the sale of Power Holding Company of Nigeria (PHCN) assets came from the banks. With such a huge commitment, banks are having a stranglehold on power financing. COLLINS NWEZE reports.

    Banks’ credit to the economy is expected to rise by 20 per cent in the year, with a significant contribution from the power sector. This will cushion banks’ dwindling earnings over tough regulatory policies by the Central Bank of Nigeria (CBN).

    Findings showed that the lenders coughed out N320 billion of the N400 billion earned by the Federal Government from the sale of the Power Holding Company of Nigeria (PHCN) assets.

    Nigeria, in its desire to be among the top 20 economies of the world by 2020 is targeting an 40,000 mega watts (MW) of electricity.

    With a 167 million population, its current maximum electricity generation capacity – approximately 4,500MW – is inadequate to meet the demand estimated at 10,000MW.

    The Chairman/Chief Executive Officer of the Nigerian Electricity Regulatory Commission (NERC), Sam Amadi, said to meet the generation targets set for 2020, significant private sector investment was required in the supply chain, including generation, gas-to-power infrastructure and distribution networks. He identified inadequate financing, especially with regards to the distribution companies, as one of the major challenges facing the power sector.

    Amadi said improvement in the industry was necessary to sustain the political will behind the power project. He said the role of banks in solving this crisis, by providing the needed financial backbone to the projects, cannot be overemphasised.

    The World Bank and other local and international lenders have showed renewed commitment to power sector funding. Zenith Bank Plc said it expects to increase loans to the privatised power companies. In Bloomberg report, the lender said loans to the power sector may rise to 10 per cent of the bank’s loan book by this year, up from 4.3 per cent in the third quarter and 1.3 per cent at the end of June.

    Its Chief Executive Officer Mr Godwin Emefiele, said: “Opportunities in power opened up and we took advantage of it. It is a very essential utility that we all need for our survival.”

    The value of Zenith Bank’s loans to power firms was about N40 billion in the third quarter after the handovers, said Emefiele. Zenith Bank gave loans to companies including Eko Electricity Distribution Company and Ikeja Electricity Distribution Company.

    There was a $350 million infrastructure financing agreement for Africa between global infrastructure giant General Electric and Standard Bank. The bank explained that the partnership would provide affordable access to power infrastructure meant to augment traditional large scale grid capacity development. The partnership will target Nigeria, Angola, Tanzania, South Africa and Ghana. Others are Kenya, Mozambique, Uganda, Ethiopia and South Sudan. Financing activity will center on project finance, equipment finance, trade finance and advisory.

    Speaking at a ceremony to announce the partnership, President/Chief Executive Officer of GE Africa Jay Ireland said the partnership comes at the right time when there are concerted efforts to boost access to energy across the continent. He said partnerships of this nature would certainly support efforts by respective governments in finding captive power solutions to meet the growing demand for alternative fuels.

    Chief Executive, Stanbic IBTC Holdings, Mrs Sola David-Borha said the bank was committed to partnerships of this nature that help energise the sector. She said the power challenges identified in the focus countries for this partnership were opportunities for growth through sustainable investment. Mrs She also disclosed that through the partnership, financing will also be available for off-grid solutions that rely on cleaner fuels such as biomass and biogas across sub-Saharan Africa.

    Another international lender, Ecobank Nigeria said it will invest $25 billion in five years to help solve Nigeria’s power sector crisis. Ecobank Country Head, Power & Energy, Olufunke Jones said the investment is in line with its policy to support the growth and development of the power sector in Nigeria.

    She said it has played a major role on the buy-side of the power sector privatisation exercise by providing financial advisory services, lead arranger role, acquisitioning financing and guarantees to Distribution Companies (DISCOS), Generating Companies (GENCOS) and National Integrated Power Plants (NIPP).

    She said: “Nigeria has one of the largest gaps between demand and supply for electricity. To bridge this gap the country requires a combination of favorable government policies, private sector participation and Foreign Direct Investment (FDI) as well as transparency and persistent monitoring that will guarantee an improved business environment.”

    According to her, the power reforms have created opportunities for Capital Expenditure (CAPEX) and Operating Expenditure (OPEX) funding, a consequence of the handover to the new owners. “There is the urgent need to rehabilitate the distribution networks in order to make them robust and flexible enough to accommodate the nation’s demand for power,” she said.

    Local Account Manager, Corporate Banking Group, Mrs. Funmilola Ogunmekan said the power sector is faced with the challenges of upgrading mostly obsolete equipment and processing under a traditional technology framework. This, amongst others, is the immediate challenge before the potential of the industry is fully manifested.

    Mrs. Ogunmekan reiterated that this year, the lender will leverage its position as a bank with the third largest branch network to provide effective Utility Collections and Cash Management services while providing the required additional CAPEX/OPEX funding requirement for at least five of the Distribution Companies across the country.

    Likewise, the United Bank for Africa Plc (UBA) said it has so far extended $700 million, about N113 billion, in funding to different investors towards the acquisition of power assets in Nigeria’s recently privatised power sector. Its Group Managing Director/ Chief Executive Officer, Phillips Oduoza said: “It is a growth sector we are playing very big.”

    World Bank’s role

    The Minister of Finance and Coordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala said the World Bank is providing $1.4 billion to Nigeria to support power infrastructure.

    She said the global lender was planning to set up an infrastructure facility and that Nigeria would be among the first set of countries to benefit from it, given the nation’s large size and the scope of its infrastructure needs.

    “They want to concentrate on power, and are already actively working with several private sector companies that want to invest in Nigeria. They are promising to give Nigeria about $700 million under the International Bank for Reconstruction and Development (IBRD) guarantees for the power sector, as well as a willingness to invest another $700 million to support transmission,” she said.

    She explained that the power infrastructure support finance was derived from the initiative of the World Bank Group and its affiliate, the International Finance Corporation (IFC) which lists Nigeria as one of the focused countries in Sub-Saharan Africa to benefit from such funding.

    Also, the Board of the African Development Bank Group (AfDB) has approved an African Development Fund (ADF) Partial Risk Guarantee (PRG) programme of $184.2 million to support the power sector privatisation. It also provided an ADF loan of $3.1 million, for capacity building for the country.

    The Director of the AfDB’s Energy, Environment and Climate Change Department, Alex Rugamba, said the PRG programme in Nigeria would increase the country’s electricity generation by catalysing private sector investment and commercial financing in the power sector through the provision of PRGs.

    “The PRGs will mitigate the risk of the Nigeria Bulk Electricity Trading Plc (NBET), a Federal Government of Nigeria entity established to purchase electricity from independent power producers (IPPs), not fulfilling its contractual obligations under its power purchase agreements with eligible IPPs. This in turn will increase the comfort level of private sector financiers and commercial lenders investing in the power sector privatisation programme,” he said.

    Continuing, Rugamba said an effective and steady power supply is critical to the sustainability of Nigeria’s development path. The Board’s decision today will allow the AfDB to support the Nigerian Government’s efforts to reform the power sector and position the country for sustainable and inclusive growth.

    Bonds to the rescue

    Banks have also drawn huge funds from the bond market to fund power projects. Four banks raised $1.45 billion in the last three years through Eurobonds to assist them in meeting their power sector funding obligations, Debt Management Office (DMO) Director-General, Dr. Abraham Nwankwo said.

    GTBank issued $500 million; Access Bank issued $350 million while Fidelity Bank and FirstBank issued $300 million each.

    Nwankwo said the funds will be instrumental in helping Nigeria meet its infrastructural needs especially power adding that ambitious banks can explore the funding opportunities that the power sector presents.