17 May 2018

Nigeria: Govt Provides More Details On N72bn Investment Plan for Discos

Abuja — The federal government has provided more details on the N72 billion financial facility it plans to provide for the 11 electricity distribution companies (Discos) in Nigeria to upgrade and expand their networks.

It said the facility would be a shareholder loan which the Discos must be willing to match or it would be converted to an equity.

According to the Discos' privatisation terms, the government has 40 per cent shareholding in them while the core investors of the Discos maintain 60 per cent shareholding.

Also, the government indicated that the Transmission Company of Nigeria (TCN) would be the source of the facility as well as its manager.

Last Sunday, the Minister of Power, Works and Housing, Mr. Babatunde Fashola, disclosed the government's plan to invest the sum in the Discos. He noted in Yola, capital of Adamawa, that the financial facility would help the Discos expand their networks to be able to take stranded electricity from the generation companies (Gencos) to consumers in the country.

However, the Managing Director of the TCN, Mr. Usman Mohammed, had while commissioning a 60MVA high voltage transformer at TCN's Bauchi transmission substation on Tuesday, disclosed deeper details of the investment plan.

Mohammed, stated that the TCN approached the government to allow it assist the Discos upgrade their networks and its proposal was approved, hence the investment plan.

According to him, the new transmission facility will improve the capacity of the substation from 70MVA to 130MVA, and improve electricity supply to Bauchi and other areas which include Ningi, Naborodo, and Das communities.

"We expect that Jos Disco will expand their network to ensure that they pick the load. To assist Discos in this regard, we approached the federal government and they agreed that TCN is going to invest in distribution on behalf of Ministry of Power, Works and Housing and we already have N72 billion which has been approved by the Federal Executive Council for this purpose.

"Where we discover that we have load and that load cannot be taken by the Disco, we apply this fund to assist in expanding that network so that it can take the load. The fund is like shareholder loan to distribution companies which they must match or it will be converted to equity," said Mohammed.

He noted that the TCN has continued to expand the transmission network, adding that it has in the 11 months, installed more than 18 power transformers using its in-house engineers.

"We are working very hard to see how we can further stabilise the grid. On Sunday, the 15th, we commissioned two transmission projects. One is a 40MVA transmission substation in Mayo-Belwa in Adamawa State commissioned by the Minister of Power Works and Housing and on the same day the Minister of State Power, Works and Housing, Suleiman Hassan commissioned a 30MVA power transformer in Gombe transmission station.

"When we came in, the capacity of transmission was 5500 megawatts (MW), as at December 2017, when we last simulated, the capacity of the grid was 7,154MW," he explained.

According to him: "From June to date, TCN engineers have installed more than 18 power transformers including the 60MVA 132/33kV power transformer here in Bauchi transmission substation.

"The new power transformer was installed 100 per cent by TCN engineers. We are working very hard to create the Transmission Rehabilitation and Expansion Programme (TREP) stage two and that will involve building a line from Calabar to Kano and this has gone very far because we have gotten an organisation that will provide us with a grant to do the study and that meeting will take place tomorrow. We would continue to do all we can to ensure that the grid continues to grow into a very robust transmission network."

In his remarks at the inauguration, the governor of Bauchi, Mr. Mohammed Abdullahi, stated that the new transmission facility would improve the quality of power supply to Bauchi.

Abdullahi said: "I am very happy to be the one commissioning this 60MVA power transformer in Bauchi. To so many people the meaning of this may be lost to them, but for me and the people of Bauchi State this is a very great development.

"Overtime the quality of power that has been supplied to Bauchi state has always been an issue, the simple reason is that the quality is not able to drive most of the major economic activities in Bauchi. The up-grading of this substation here in Bauchi is a very good development to the very good people of Bauchi State."

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