Achieving a robust power transmission network

 

By Uche Aneke

I watched with zeal and enthusiasm the recent Presidential Power Reform Transaction Signing Summit at the State House Abuja. At that Summit, the preferred bidders for the Power Holding Company of Nigeria (PHCN) Successor Generating and Distribution Companies who have paid the initial 25% of the bid prices were handed over their 25% payment
certificates. The balance of 75% is expected to be settled within 6 months.

That event to me was indeed a major step forward in the implementation of the power sector reform. The Minister of Power, Professor Chinedu Nebo, in his speech at the event, described the summit as a “further boost to the reform momentum and investment confidence.”

I say so because the critics of the ongoing privatization efforts in the power sector did not believe that the process would reach the present stage of its journey. Their skepticisms were initially hinged on the fact that privatization of the power sector was not an answer to Nigeria’s quest for uninterrupted power supply and therefore concluded
that the project would not work.

Today, we have gone beyond the unbundling of the PHCN to the sale of the successor companies. It is also becoming increasingly clear that the solution to the interrupted power supply in the country lies in the hand of the Private Investor, given the enormity of the financial investments that are required to revitalize and transform the sector for efficiency and result.

For instance, to achieve the projected 40,000 MW in the country by the year 2020, it requires an annual ten billion dollars investment in the power sector for the next ten years. This means that a whopping one hundred billion dollars is required urgently with generation alone, accounting for thirty five percent of the fund injection. Obviously, this huge capital outlay is not available to the federal government now or in the near future. The interest shown by investors in the privatization of the power sector is unimaginable.

Impressed with the investors market confidence in the power sector, President Good luck Jonathan during the Power Reform Transaction signing Summit, stated that he was encouraged by the sustained interest in the sector and the meaningful investments that had been prompted in gas processing, power generation, power distribution and transmission.

In no distant time, the generation and the distribution companies would be handed over to the preferred bidders to be fully managed by them. The only component of the power sector that will remain in the hands of the government and be managed by them is the Transmission Company of Nigeria (TCN). Already a management contract between
Manitoba Hydro of Canada and the Federal government has been put in place for TCN, to bring global best practices to bear in the expansion and management of the Nation’s grid.

 

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