7 March 2019

Nigeria: Our IPPs Are Close to Completion, Says MAN

With most production firms lamenting the high cost of production due to inadequate power supply, poor infrastructural facilities, the Manufacturers Association of Nigeria (MAN), has assured its members that electricity shortage will soon be addressed, as most of its Independent Power Projects (IPPs) in the states are close to completion.

Besides, MAN noted that plans are underway to help its members get access to the eligible customer scheme, despite deliberate efforts by distribution companies (DisCos) to block them.

Indeed, the manufacturers have incrementally generated at least 13,000MW of electricity under the IPPs and micro-grid platforms, to meet their operational demand, as generated power from the national grid remained insufficient.

MAN hopes to use the Manufacturers Power Development Company (MPDC), as a vehicle to achieve the gradual transition from dependence on DisCos for electricity to its IPPs.

It also complained that manufacturers experience inadequate electricity supply with an average of nine hours and three times power outage daily.

With alternative energy utilisation and relative improvement in electricity supply to manufacturing companies from the national grid, expenditure on electricity in the sector totalled N43.19 billion in the first half of 2018 against N66.03 billion recorded in the comparable period of 2017; thus, indicating a decline of 34.6 per cent during the period.

The local producers attributed the decline in expenditure on alternative energy source to low utilisation of energy in the period due to general sluggishness of economic activities and slight improvement in electricity supply from the national grid.

The Director-General, MAN, Segun Kadir, in a chat with The Guardian said, "We are making progress and a number of our projects are almost maturing. We are trying to overcome the challenges that the Discos have put to deliberately block our members from accessing the Eligible Customer Scheme, but we are overcoming it, and we are engaging all the stakeholders in order to access this, and if that happens, we are likely to experience a dramatic improvement of our access to power."

The local producers, through the Chairman, Board of Directors (MPDC), Ibrahim Usman, had explained that about 40 per cent of production costs go into energy provision and such practice remains unhealthy for businesses, considering the lack of competitiveness in the business environment.

The local producers also expressed concerns about the implementation of the eligible customer regulation.

According to MAN, the contractual framework contemplated in the regulation is such that the distribution companies, the Transmission Company of Nigeria (TCN), as well as power producers all stand to generate some revenue depending on the particular class of customers involved.

Under the framework, large scale power users or companies can purchase power directly from generation companies without necessarily going through the distribution companies.

Noting that eligible customer regulation was a laudable scheme, Kadir urged the Federal Government to prevail upon the concerned authorities to ensure that qualified companies were given the approval.

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