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FG set to privatise power transmission system


News » Editorials
Nigeria

June.16.2014

The Federal Government is set to privatise the country’s electricity transmission infrastructure six months after it physically handed over the generation and distribution companies to private investors.

The move, our correspondent gathered, was to boost power supply by bringing in private hands, considered to be more efficient, to manage the transmission assets.

The electricity transmission system has been described as the weakest link in the power supply chain, a development that has led to numerous system collapses.

Senior officials of the Federal Ministry of Power told our correspondent on Sunday that the government was set to privatise the transmission system in order to ensure that the objectives of the reforms in the power sector were not defeated.

“I can confirm that the government is serious about getting power right and it is set to privatise the country’s transmission infrastructure in order to avoid anything that will make this reform a failure,” an official, who spoke on the condition of anonymity because he was not authorised to speak on the subject, said.

The Permanent Secretary, Federal Ministry of Power, Mr. Godknows Igali, had given a hint about the government’s plan to privatise the power transmission assets at the signing ceremony of a Memorandum of Understanding between the National Power Training Institute and Schneider Electric in Abuja.

He said, “The power sector is undergoing an open revolution. What has happened in Nigeria is something that has not happened in any other place in the world, where the entire distribution and generation outfits have been privatised by the government.

“Even in transmission, we are now opening the window for its privatisation so that the private sector can come in by bringing their creativity, versatility and drive for performance. We know the journey has started slowly but steadily.”

Only last week, banks in the country expressed concerns over the poor state of the transmission infrastructure and how this might negatively affect the power firms.

But Igali stated that the power sector was at its transition phase and stressed that the new owners were still settling down after six months of their takeover of the generation and distribution firms.

He said, “They are expanding, putting new capacities in place, upgrading, bringing money into the system and replacing some installations to make them more efficient.

“These are little disruptions and it may seem as if we are not yet moving forward but actually, we are moving forward and we will soon arrive at a comfortable cruising level where Nigerians will see the desired change.”

He said the signing of the MoU between NAPTIN and Schneider was for the training of Nigerian electrical engineers.

The Transmission Company of Nigeria is in charge of the transmission system, which is being managed by Manitoba Hydro International, a Canadian firm with expertise in electricity equipment management.

The Federal Government, in March last year, while formally handing over the TCN to Manitoba, ordered it to halt the incessant system collapses that had characterised the country’s power transmission infrastructure.

The PUNCH had reported exclusively that 28 system collapses had been recorded in the power sector between January 2013 and April this year, a development that worsened the supply of electricity across the country.

The information was contained in the periodic report of the TCN released early this month.

To adequately address the issue, the Managing Director, MHI, Mr. Mack Kast, had told our correspondent that the firm would need $1.5bn annually to efficiently evacuate the 20,000 megawatts of electricity being targeted by the Federal Government by 2020.

The firm only announced that it had received $655m (N102bn) as of February this year.

Part of the funds received by the TCN was disclosed by the Minister of Power, Prof. Chinedu Nebo, last week while trying to allay the fears of bankers who expressed concerns over the poor state of the power transmission infrastructure.

Nebo told bankers that the government was also training engineers who would efficiently manage the nation’s transmission infrastructure.

According to him, a lot of funds have been earmarked for the development of transmission assets, as $2.55bn sourced from both local and international organisations has been set aside for the revamping of the assets.

He said, “The issue of transmission is vital because no matter what is generated if it is not transmitted, it will not get to the Discos. Already, the National Economic Council has recommended and Mr. President has approved a sum of $1.6bn from the proceeds of the sales of the NIPP plants just for transmission alone.

“In addition to that, the World Bank has brought in a substantial amount of money, more loans are coming in and these are in excess of $500m. In the Eurobond that was oversubscribed, we had about $135m just for transmission. From the African Development Bank, the amount that is already being accessed is $150m, just for transmission.

“From the French Development Bank, $170m is already in the pipeline and very soon will be accessed. In addition to that, there is an incredible number of parties internationally who want to invest in transmission, not just to give us loans but to come and invest in a PPP arrangement.”

Nebo said that ideally, transmission should have 150 per cent of generation, but it had never been so in Nigeria.

“But by the grace of God, under President Goodluck Jonathan, we hope to achieve 120 per cent capacity, and in that way, no matter what we generate, we should be able to transmit.”

The Director-General, NAPTIN, Mr. Reuben Okeke, said the MoU would greatly boost the institute’s drive to ensure adequate training for engineers in the power sector.

According to him, Schneider will train instructors who will in-turn train technicians involved in professional wiring of houses to avoid fire accidents.

Okeke said NAPTIN currently had over 600 engineers who were being trained and explained that the collaboration would produce the knowledgeable manpower needed to drive developments in the sector.

 
Article Credit: Punchng

Updated 5 Years ago
 

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