The Ibadan Electricity Distribution Company (IBEDC) has blamed the Transmission Company of Nigeria (TCN) for the poor electricity supply to Sagamu, Ota, Papalanto, Abeokuta, Ibadan North, Iseyin and other economically viable areas under the company’s network.

The company has also explained that any current power outage being experienced by Magboro, Mowe, Ibafo communities and environs is as a result of the reduced power supply from the national grid, which is not within its control.

The Deputy Managing Director of the company, Mr. John Ayodele said in a recent statement that the company had always clamoured for adequate and reliable power supply to these economically viable areas with a higher concentration of maximum demand customers.

According to Ayodele, TCN has been unable to deliver due to undersized transmission lines, overloaded transmission power transformers and aged/obsolete indoor 33KV breakers.

Ayodele argued that the TCN, which is the middle-man of the value chain, “does not always wheel power supply when and to where it is needed”.

“IBEDC has requested to take more power to areas where load demand exceeds supply but a lot of those requests are still pending.  Also, the frequency of interruptions – sometimes more than ten times in twenty four hours, have made a number of our premium customers to resort to self-generation, leaving the national grid completely,” Ayodele explained.

He noted that ideally, IBEDC ought not to reject power, but added that “this happens due to the existence ofareas where the customers do not have the purchasing power reciprocal to the amount of power they receive due to economic reasons and a general apathy to bill payment”.

“Over the years we have discovered that when we send power to these locations it ultimately results in huge energy thefts. Thus, in order for the company to avoid further revenue loss occasioned by this negative trend, we are hereby forced to reject the power supplied to customers in these areas. Besides all these, IBEDC is hampered by an avalanche of transmission limitations which vary from region to region. It is worthy of note that the percentage of what we reject is still significantly lower to what we accept for onward distribution,” Ayodele said.

According to him, the power company is now left with mostly residential customers who do not pay promptly for the electricity delivered to them.

To worsen the situation, he argued that a lot of these customers embark on meter by-pass and energy theft, adding that this has significantly impacted our revenue negatively.

Despite the precarious operating environment, Ayodele posited that as a customer-sensitive and responsive power company, we would continue to appeal to TCN for better and reliable power supply to enable us retain our premium customers who are beginning to seek alternative power sources.

“We will continue to improve and upgrade our infrastructure for power supply delivery to all our esteemed customers in the face of all the obstacles in the sector” he added.

On the poor power situation in  Magboro/Mowe/Ibafo and environs, the company noted that it had lived up to its promise to ensure the people of those areas were energised at the end of 2016 by an alternative power supply route through Kobape road 2x60MVA, 132/33KV NIPP New Abeokuta Transmission Station at a cost of over N70 million.

“IBEDC is a distribution company and we can only distribute the power that is being delivered to us from the national grid. Any current power outage being experienced by these communities is as a result of the reduced power supply from the grid which is not within our control. This is evident in the fact that the national grid has already experienced two system collapses within the first two weeks of this month. As we speak, power is still being supplied to Asese, Ibafo, Magboro, and environs on a daily basis, however, the quantum is dependent on our allocation which has been extremely inadequate. Also, the energisation process will be in phases for the communities as local rehabilitation work is on-going,” the company explained.

Time was when the power generation companies (GENCOs) and the distribution companies (DISCOs) were best of allies ever but all that has become a thing of the past now as both of them no longer see eye-to-eye in a manner of speaking.

The reason for this is not far to seek: the once cordial relationship enjoyed by the GENCOs and DISCOs has turned sour because of the growing debts owed by the latter.

Investigation by The Nation revealed that the DISCOs owe the GENCOs a very humongous sum, accumulated in the last couple of years.

Crux of the matter   

The issue is that DISCOs receive bulk power through the Nigerian Bulk Electricity Trading Plc (NBET) supplied by GENCOs.

The inability of the DISCOs to meet their payment obligations to NBET for power supplied by the GENCOs, has also made it impossible for the GENCOs to pay the gas suppliers.

Expectedly, the DISCOs have blamed their inability to meet their financial obligations in the electricity value chain on non-reflective tariffs, vandalism, low power generation, inability to access credit facilities from the banks and non-payment of bills by customers.

The DISCOs also claimed that they are being owed a debt of N100 billion by ministries, agencies and departments (MDAs), a debt, which the Minister of Power, Works and Housing, Mr. Babatunde Fashola, said was subject to verification.

However, while a majority of the DISCOs have demonstrated increasing capacity to access funds for network development, others have blamed their excuses on the non-reflective tariffs and the N3 trillion exposure of the financial sector to the banks for their failure to discharge their obligations.

Peeved by the apparent non-performance of some of the DISCOs, Fashola had advised that “those DISCOs who cannot run the business must be honest with themselves and begin to look for options either to raise capitals, to get more strategic partners in or to do whatever they consider appropriate within the framework of their contract in order to get on with this job.”

The Nation gathered that the power companies are battling with a debt overhang of over N400billion.

While GENCOs’ debt is put at over N300bn, DISCOs have complained of being owed over N100bn by customers.

At the twilight of last year, the Executive Secretary, Association of Power Generation Companies, Dr. Joy Ogaji, had revealed that: “The debt is over N300bn that GENCOs are being owed. If the situation is not checked, there will be blackout. It is so imminent that I don’t know if most of the generation we are having now can go beyond Christmas if the payment problem is not solved. We can’t pay contractors; most of the machines are packing up.”

Ogaji, however, said the Nigerian Bulk Electricity Trading Company Plc should be blamed for the problem, saying, “As GENCOs, we don’t really have any direct relationship with DISCOs at the moment; GENCOs are meant to generate power and government brought NBET as a wholesaler, which takes all the power being generated by GENCOs and sells to the DISCOs. So the onus lies on NBET to collect the money from the DISCOs. “The claim on whether DISCOs are remitting money or not should not be the problem of the GENCOs, but that of NBET. Government told us that NBET is properly capitalised and has enough money to meet all of the GENCOs’ payments. But unfortunately, NBET has not been able to do that.”

In a chat with The Nation, one of the GENCOs confided in our correspondent at the weekend that through their umbrella association, they have resolved to approach the Nigerian Electricity Regulation Commission (NERC) for approval to supply power directly to certain categories of customers and also collect the bills directly.

Thus, the power generators are making subtle moves to bypass the DISCOs and supply power directly to certain class of customers.

“The DISCOs owe the GENCOs a lot of money and that is why there is crisis in the sector. Some of the Discos actually do not have what it takes to run the sector and some of them will soon go under. The GENCOs are not talking like the Discos because they also owe gas suppliers. They have also formed their own association and plan to meet NERC for approval to supply power directly to certain class of customers and also collect the bills directly. That is the only out to ensure that the GENCOs do not collapse,” one of the operators who asked not to be named explained to our correspondent.

In a recent advertisement by the Association of Nigerian Electricity Distributors, the umbrella body for the DISCOs stated that its members were being owed N100bn by consumers, including military and government Ministries, Departments and Agencies as their biggest debtors.

However, different operators in the sector blamed the DISCOs for the drastic illiquidity in the power market, as they argued that the DISCOs were not doing enough with respect to revenue collection from electricity consumers.

Aside the NBET, the Niger Delta Power Holding Company recently urged the DISCOs to ensure adequate remittance to the bulk trader in order to enhance smooth operations of the power business.

The Managing Director/Chief Executive Officer, NDPHC, Mr. Chiedu Ugbo, stated that the indebtedness to his company by the power market as of August 2016 was over N105bn.

“The total energy invoiced by the eight operational NDPHC plants since they started functioning amount to about N235bn. But out of this amount and as of August 2016, we were being owed about N105bn,” Ugbo told newsmen in Abuja.

Echoing similar sentiments, President, Nigerian Gas Association and Managing Director, Frontier Oil Limited, Mr. Dada Thomas, in a media interview recently blamed the DISCOs for the parlous state of the sector.

But the DISCOs had argued that aside the fact that the current Multi Year Tariff Order put together by the Nigerian Electricity Regulatory Commission was not cost reflective enough, the refusal of ministries, departments and agencies of government to settle their electricity bills was also hampering their ability in making the required remittances.

The Chief Executive Officer, ANED, Mr. Azu Obiaya, recently told our correspondent that to avert an increase of over 200 per cent in electricity tariff payable by residential consumers in the near future, the federal government had to intervene in the sector.

He explained that the government’s intervention was vital in order to address the N809bn revenue shortfall in the industry.

Obiaya insisted that the intervention could come in form of subsidy to consumers, access to foreign exchange by the companies, as well as commercial reasonable financing for the DISCOs.

He explained that DISCOs were not willing and could not impose any increase in tariff on consumers, but maintained that to avoid a situation where the consumers would have to pay as high as N70 to N105 per kilowatt-hour as energy charge, the federal government must do something.

Currently, the average rate being paid as energy charge by residential consumers across the country is N22.8/KWH, but this may increase if nothing is done to address the N809bn revenue shortfall in the power sector, according to the DISCOs.

The blame game

The blame game in the power sector has come to the fore again as Transmission Company of Nigeria (TCN) claimed that DISCOs 30 percent remittances on monthly invoices is responsible for the current poor state of the country’s electricity services.

Nigeria’s economic growth has been slowed by lack of steady power supply, despite claims by government of embarking on privatisation of the sector, which has divided the former PHCN into different components: GENCOs, DISCOs and TCN with the promise to double power generation from its present 4.5 mega watts.

According to the General Manager in charge of Transmission at TCN, Bede Opara, DISCOs have not been able to pay their debts due to energy theft and other issues. “The low revenue collection affects transmissions as well as gas plants. All these are parts of the issues affecting the sector at one point or the other.”

Power drop in months

It is however instructive to note that the Nigeria Electricity System Operator, NESO, a section of TCN responsible for operating the transmission system, has indicated that due to these shortfalls there is constant collapse of the system.

According to their report in May 2016, the national grid collapsed five times. In June, it collapsed four times. July, September and October, each witnessed one collapse, while November and December witnessed three collapses each. The transmission network was said to have recorded over 26 system collapses in 2016. These were largely blamed on weak transmission network, regarded as the weakest link in the electricity value chain.

Before now generation and distribution companies have asked for more time and patience from Nigerians to improve electricity supply. Their plea came as they identified weak transmission network as a major hindrance in the attainment of the 10,000 megawatts target set by President Muhammadu Buhari to be achieved in 2019.

Data obtained, showed that Kaduna, Eko, Jos, Yola, Port Harcourt, Abuja, Ibadan and Benin DISCOs rejected the 1,336.75MWH of power from TCN in the third quarter of this year, despite instability in the supply of electricity across the country.

Specifically, in the month of July, a total of 318.83MWH, which was three per cent of the total energy delivered to the DISCOs, was rejected by four of the firms. In July, the Kaduna DISCO’s rejection of 132.99MWH made it the highest in the month. The Eko DISCO rejected 67.46MWH; Jos, 63.05MWH; while the Yola DISCO rejected 55.33MWH.

In the same month, the Port Harcourt DISCO took in the highest quantum of power at 441.43MWH; Kano accepted 397MWH; while the Enugu DISCO collected 302.49MWH.

In August, there was an increase in load rejection by the distribution companies to the tune of 541.56MWH, which was four per cent of the total energy delivered to them as against the 318.83MWH delivered in the previous month.

The Port Harcourt DISCO rejected the most quantum of power with a total of 239.88MWH, followed by the Eko DISCO with 134.8MWH. In the month under review, five DISCOs took excess load beyond their Multi-Year Tariff Order allocation to the tune of 187.21MWH.

The Abuja DISCO took the most, with 132.81MWH; followed by the Kaduna Disco, with 23.21MWH; Ibadan, 16.24MWH; and Enugu, 12.42MWH. Further analysis showed that September saw the rejection of 476.36MW, representing 12 per cent of the total energy delivered to the Discos. It was, therefore, the highest load rejection in the quarter.

The Abuja DISCO rejected 94.72MWH, followed closely by Port Harcourt, with 92.35MWH; Ibadan was next with 67.14MWH; and the Benin DISCO turned down 46.40MWH. Among all the DISCOs, only Kaduna accepted power beyond its MYTO allocation, taking in 65.96MWH in excess of its MYTO allocation.

The Minister of Power, Works and Housing, Babatunde Fashola, says the sabotage of power assets by militants has prevented the nation from generating 7,000 MW of electricity.

The minister, who disclosed that the nation’s power grid could now support 6,500 MW debunked claims that the capacity of the nation’s power grid is not more than 5,000 MW. He added that if pushed to its limit, the nation’s grid could as well carry 7,200 MW.

A statement by the minister’s media aide, Hakeem Bello, stated that Mr. Fashola said this while speaking at the January edition of the Nextier Power Dialogue held at the Thought Pyramid Art Centre, Abuja.

According to the statement, Mr. Fashola said, “You hear us announcing that we commissioned one
transmission project or the other, you see me going round for these commissioning; that is the Grid evolving. Today, at its most frugal, it would support 6,500MW; pushed to its limit it would carry 7,200MW.

“So it is not true when you hear that the Grid capacity is not more than 5,000MW. It is growing every day and more projects are coming up.

We have completed some and more are still coming up. So that is where we are.”

The Minister said while power was out due to attacks in one axis, the expansion of either the Grid or gas supply was kept alive on another axis and hydro power was also being expanded.

He added that though over 3,000MW has been lost recently to attacks on gas infrastructure, a steady average of about 3,000MW to 4,000MW was built back from around August until last week.

“Now it means that notionally, if we had those 3,000MW plus 4,000MW we were already at 7,000MW. But we would not have it because some of our family members are angry,” he said referring to militants.

The minister noted that there have been outages across the country in the last 24 hours, stressing that government would do something drastic to rectify the situation.

Mr. Fashola pointed out that while the problems of sabotage were going on, debts were being owed the gas companies.

“You have heard that Federal Government is owing and all that; but you know, we don’t have the authentic figures and until we have that I cannot go and tell President Buhari that we want to pay ‘about…’. He will say we are not serious. So we expect to see the completion of that so that we can pay what is proven debt,” Mr. Fashola said.

The Minister pointed out that Government has made progress in its efforts to achieve energy sufficiency, which was its first objective at inception.

“In the last one year that we have been in office, we have got to an all-time high of 5074MW. Nigeria has never reached there before. But immediately we got that, do you know what happened? They started breaking the gas pipelines one by one. We had 14 attacks in about two months”.

“We need to get power from wherever we can. So, we said the first step is Incremental Power wherever we could get it; as long as it is legitimate, it is safe, it is environmentally compliant, we would put it on.

“But some of our brothers are angry; and I continue to tell them anger is not a strategy. I know they will not be angry forever.”

The Minister, who appealed for peace and understanding among the militants, appealed to their relations and friends to persuade them to embrace peace adding,

“While they are angry, they are punishing us, they are punishing themselves, they are punishing everybody”.

Following reports that FG wishes to grant investors in the power sector further tax holidays, the Chief Executive Officer, Financial Derivatives Company Limited, Mr. Bismarck Rewane, has stated that the sector needs a financial bailout, not a tax holiday.

FG intends to stimulate investment in the sector by granting tax holidays to current investors. Rewane doesn’t think this is the right decision.

“A tax holiday only incentivises those who are making profit. These are loss-making entities right now, because they borrowed monies and borrowed in dollars as well. What the government should be doing is to look for how to bail them out rather than give them further tax holidays,” he said according to Thisday.

“Tax holidays are good for people who initially were profitable and all of a sudden became unprofitable, that is like Google, Facebook or MTN. Tax holidays helped them in investing more. Tax holiday is useful after the fundamentals of that industry have shown that the companies are going to be profitable. Right now, that is not the case. What these companies need is a financial bailout and interest moratorium to enable them cover their cost and invest additional capital in transforming the industry,” Rewane explained.

Although CBN had created a special intervention fund for the power sector, Rewane said it is always “too little and it is never enough. So, they (government) need to do something really bold.”

2,500 celebrate historic groundbreaking in one of Africa’s neediest countries for a $14m solar field to advance economic and social development

BUJUMBURA, Burundi, January 19, 2017/ — Amid the lush and rolling hills of Mubuga, 100 km outside the Burundian capital of Bujumbura, 2,500 people came yesterday to celebrate the festive ground-breaking for a 7.5 MW solar field that will add 15% to the East African country’s generation capacity. In a colorful and drum-accented ceremony attended by government officials, international investors, religious leaders and the diplomatic community, Gigawatt Global (http://GigawattGlobal.com), the leading frontier solar and social development enterprise, announced the $14 million pioneering project in one of the world’s least developed nation.

“Empowering economic and social development is at the heart of our green energy business,” said Michael Fichtenberg, VP for Finance and Business Development of Gigawatt Global. “This high impact development investment supported by leading international financial institutions signals that Burundi is open for development and business.”

This will be the largest private international investment in the power sector in Burundi in nearly 30 years, with the power being sold for 25 years to REGIDESO, the national electric company. “We are very excited at the groundbreaking of the Gigawatt Burundi solar field,” said His Excellency Come Manirakiza, Burundi’s Minister of Energy and Mines. “After their success in Rwanda, Gigawatt Global has proven it can be relied on to deliver efficient, clean renewable energy at reasonable cost, contributing greatly to our economy and society. We look forward to the speedy completion of this project, and are thankful for the collaboration and cooperation with Gigawatt Global as energy in Burundi is a clear priority.”

Gigawatt Global, an American-owned Dutch developer, is a founding member of the White House Power Africa initiative and financed and developed the first commercial scale solar field in continental sub-Sahara Africa (outside of South Africa) in neighboring Rwanda in 2014.

The project has been supported by a grant from the Energy and Environment Partnership (a Finland, UK, Austrian fund) and the Belgian Investment Company for Developing countries (BIO) to cover the relevant studies. The project is also supported by African-EU Renewable Energy Cooperation Programme (RECP) and the Renewable Energy Performance Platform (REPP), currently engaging in project due diligence.

“This project is a great example of Burundians, Americans and other international partners working together for the economic development of Burundi,” said Anne Casper, U.S. Ambassador to Burundi. “The success of this project will be a positive signal to other potential investors, who are watching Gigawatt Global and the Government of Burundi to see if investing in Burundi is stable, predictable and easy to do. We are working together very hard and very closely — the U.S., Burundi, the Netherlands, and Gigawatt Global — to make this project a success — to enable the whole country to get energy and this will lead to the country’s economic development.”

U.S. Power Africa Coordinator Andrew Herscowitz underlined the importance of Gigawatt Global’s work by saying, “As a founding Power Africa partner, Gigawatt Global continues to demonstrate its industry leadership with this investment in Burundi.”

HE Hendrikes Verwein, the Dutch Ambassador to Burundi, said, “The Kingdom of the Netherlands supports Gigawatt Global and commits to assist the company in the pursuit of its investments. The Kingdom of the Netherlands expresses its wish that the contractual commitments included in the agreement protocols for the construction of the solar plant in Mubuga be rapidly implemented.”

“Gigawatt Global is expecting to deploy $2 billion in renewable energy projects in Africa as partners of the White House Power Africa initiative in the coming years as renewables are taking the lead in power generation in Africa and emerging markets,” said CEO Josef Abramowitz. “We are targeting sub-Sahara Africa as a high impact and high growth market, with a portfolio of small, medium and large power projects in the highest priority development areas.”

The board of the African Development Bank (AfDB) has provided a total sum of $100 million to Nigeria for its power sector. The facility which comes as $80 million of loan and $20 million as own funds, will be used to rehabilitate the Kainji and Jebba hydropower dams.

These works will allow the two plants to increase the actual output which is 917 MW. The aim here is to push them at full throttle, thus adding 1,338.4 MW of energy coming from the infrastructures that provide energy at one of the most affordable rates in the country.

The financing agreement falls under the New Deal on Energy for Africa of the bank which wants to support Africa’s energy development. Nigeria for its part mainly wants to tap into private sector to develop clean energies, subsequently reducing its dependency to thermal energy.

The Nigerian National Petroleum Corporation (NNPC) has announced that it is planning to reduce the country’s importation of petroleum products by increasing the capacity usage of the nation’s refineries to 60% by the end of 2017.

Group Managing Director (GMD) of NNPC, Maikanti Baru said the NNPC is keen on putting an end to product importation in a few years. He added that a solid plan has been put on ground to achieve that.

“We are putting together various programmes to ensure that we achieve at least 60 per cent local refining by the end of this year. It is the procedure, or methodology, that we are changing a little bit; we are focusing on the process licensors to come and audit our processes and they have already started auditing most of our process units in the various refineries,” he said.

Baru said that the plan is in addition to other efforts put in place adding that Nigeria should be able to end importation in a few years.

“We hope if we do all these systematically, we should be able to get about 60 per cent level of capacity utilization by the end of this year or, at worst, by the first quarter of 2018 and get to 80 per cent by the end of 2018 so that we would locally be able to supply half of our Premium Motor Spirit (PMS) requirements,” he told the media

Dirisu Yakubu with agency reports

The Lagos Chamber of Commerce and Industry (LCCI) has urged private company owners to invest into the power sector so as to boost the country’s power supply this year.

According to the LCCl Director General, Muda Yusuf , the provision of a stable power supply could make Nigeria become self-reliant and attract foreign investors into the country.

The Nigerian power sector lost an estimated N1.578 billion at January 7, 2017 as a result of gas and water constraint, according to daily operational report of the Nigerian Electricity System Operation. Gas constraint was put at 3137MW, while the water management constraint was 150MW.

Yusuf advise the Federal Government to ensure the quick payment of all debts owed to power firms as stipulated in the 2017 budget, in order to be able to address the problems in the sector and reduce unemployment.

“Liquidity in the power sector should be enhanced to ensure improvement in power supply. It is equally important to ensure adequate capitalization of the Electricity Bulk Trader to provide liquidity to the GENCOs and the Gas suppliers. The private sector owners of the power firms should also inject greater equity finance into their investments,” he told Guardian news.

The latest industry data on sector reforms and activities has revealed that the collapse of seven power plants across Nigeria has resulted in a total electricity load loss of 1, 899.7 Megawatts.

This report indicated that four out of this plants owned by the National Integrated Power Projects (NIPP) were shutdown, while the remaining have been functional for days.

“Partial collapse occurred on January 12, 2017. At 8:41hours, system frequency dropped from 51Hz to 43Hz. Lagos, Oshogbo, Jebba, Kainji and Shiroro lost supply, while other areas survived. The total load loss was 1,899.7MW. As of 6am on January 13, the following plants were still shut down: Geregu NIPP and Sapele NIPP, in addition to the plants previously reported as shut down. Plants previously reported as shut down include Alaoji NIPP, Ihovbor NIPP and Gbarain,” it stated.

It added that gas constraint accounted for 2,680MW, while grid and water management constraints were both zero megawatt. Due to these constraints, the power sector lost an estimated N1.358bn,

Nigeria has been witnessing poor power supply which have crippled industry sectors and affected households in the country. These situations have been blamed on lack of adequate investment by electricity firms.

The Abu Dhabi Fund for Development (ADFD), in partnership with the International Renewable Energy Agency (IRENA) has thrown its weight behind an energy project which aims to provide power to 150,000 people in Niger Republic.  The project involves the development of a 2.1 MW mini photovoltaic plant, paired with domestic solar units. Besides the targeted populations, about 100 schools will be powered under the initiative which will also help improve access to water.

“In the past four years, IRENA and the ADFD were able, through this project, to identify energetic projects enable to help boost access to power, insure power security and provide affordable energy to populations that need it,” said Adnan Amin, director of IRENA.

The project is one of four to benefit from the support of the two institutions, which amounts to $44.5 million. Each of the four projects got between 5 and 15 million dollars in financing, which represents half of  the financing required for some of the projects. Provided as loans, the funds will be paid back over 20 years, with an interest of 1%-2%.

Since it was launched in 2013, the project which is led by the ADFD and IRENA promoted the financing of 19 projects ($189 million), and helped secure $387 million in co-financing.