25 March 2014

Nigeria: FG's Power Firm Seeks U.S.$7.7 Billion for Expansion

The Transmission Company of Nigeria (TCN), the only successor PHCN company still owned by government, yesterday said it was targeting to realise about $7.7 billion (N1.255trn) from investors for the expansion of transmission infrastructure over the next five years to enable it effectively evacuate 20,000mw of power by 2020.

Speaking at an investors' conference organised by the TCN in Abuja with the theme "Opportunity for investment in TCN transmission capital projects", the managing director of TCN, Mack Kast, said the investment required will ultimately equip the company with the capacity to evacuate 20,000mw by 2020.

He said, "We have our existing participants here and we hope to bring new investors to the table. What we are asking for over the five-year period is about $7.7bn and we believe that we can reach that goal.

"We already have some funding: we have the federal government funding, we have the potential proceeds from the sale of the NIPPs' assets but that isn't enough. We need more and that's why we came here today so that we can work on getting that increment to make sure that we can deliver up to 20,000mw capability by year 2020."

In his remarks, the representative of the World Bank, senior energy specialist, Africa region, Erik Fernstrom, stated that the bank was making a $700 million lending to the TCN based on the request of the Ministry of Finance. Fernstrom assured that the loan which was being actively packaged in collaboration with the TCN management would be delivered shortly.

To the potential investors he said, "For those of you that are interested in the market opportunities, I will like to disclose to you that these moneys will be procured following strict World Bank guidelines. The process will be transparent and it will be open to anybody interested in this market opportunity."

Mr Ibrahim Waziri, a former staff of the Nigerian National Petroleum Corporation (NNPC), is chairman of TCN's board which was inaugurated in January by the federal government. Manitoba Hydro International (a Canada-based company) was awarded the contract to manage TCN on behalf of the federal government after an exhaustive bidding process conducted by the Bureau of Public Enterprises (BPE).

Manitoba is expected to transform TCN into a technically and financially efficient company during their three-year contract. They are mandated to develop the proficiency of TCN staff through training and capacity-building programmes. Under the management of Manitoba, TCN is expected to effectively and reliably wheel power generated by generation companies to load centres.

Meanwhile, the current poor power supply being experienced in Abuja for about a week now is as a result of the drop in power allocation to the Abuja Electricity Distribution Company Abuja (Disco) from about 600mw to 150mw, representing a 75 per cent drop. LEADERSHIP has learnt.

The situation has resulted in untold hardship for electricity consumers across the city many of whom said they had gone three straight days without power.

When contacted over the development yesterday, the Head, Public Affairs, Abuja Disco, Mrs Patience Toyo, told LEADERSHIP that the fault was as a result of the low energy allocation to the utility from the transmission sector.

She said, "The fault is not from us, which is why we are apologising to our customers to bear with us, the low energy allocation we get can't even serve three-quarter of our customers. Before now we use to get about 500mw to 600mw but now we are operating as low as 150mw."

She explained that the situation has also affected the Disco's cash collection, noting that without adequate power allocation, it is constrained from serving its customers optimally.

While expressing the hope that the situation may improve within a week, Toyo said, the Abuja Disco is now forced to resort to load shedding due to the poor energy allocation.

Meanwhile, checks by our correspondent revealed that residents in Gwarinpa, Wuse, Karu, Lugbe, Kubwa and other suburb are worst hit by the power rationing.

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