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When Will Nigerians Enjoy Stable Electricity?

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Unarguably, the provi
sion of stable and uninterrupted power supply is key for accelerated economic and industrial development of any country. Analysts are quick to point out that Nigeria’s quest to become one of the 20th economies in the world may as well be a mirage without stable electricity supply.
They say that stable electricity supply will reduce the cost of manufacturing and services; boost investment and employment, among others.
However, in spite of its importance, efforts to guarantee sustainable stability in the power supply chain has remained elusive despite huge investments in the sector by successive administrations since independence.
For instance, available records showed that the Olusegun  Obasanjo’s government spent over three billion dollars on its National Integrated Power Project (NIPP) as at 2007. This, according to Gov. Gabriel Suswam of Benue, the Chairman, Joint Transaction Technical Committee, is out of the over 10 billion dollars earmarked for the NIPP.
He said that the amount was also inclusive of the two billion dollars Federal Government’s counterpart funding for Mambilla Hydro Power project and the 1.4 billion dollars set aside for additional nine turbines plants.
At the moment, four of the projects which on completion would generate 4,774MW, had been completed, while six others are at 80 to 90 per cent completion.
To further boost the initiative, the President Goodluck Jonathan’s administration has strengthened the power sector reform by fully privatising the Power Holding Company of Nigeria (PHCN).
The exercise eventually resulted in the unbundling of the PHCN and the establishment of power Distributing Companies (DISCOs) across the country.
Although the reform is yet to significantly improve power stability nationwide, the World Bank, however, applauded the government for the initiative, with a call on other African countries to emulate the policy.
Mr Mukhtar Diop, the bank’s Vice President, Africa, made the commendation while listing some infrastructural achievements in Africa, during the recent African Union Summit on Financing Infrastructure Development, in Dakar, Senegal.
According to him, the power reform is one of the ways of solving Africa’s problems by Africans. “We must commend the leadership in Nigeria for the successful completion of the privatisation of the country’s power sector. “The electric reform in that country is one of the ways of solving Africa’s problems by Africans. We commend the country for that.”
It is, perhaps, against this backdrop, that President Goodluck Jonathan promised to restore uninterrupted power supply to Nigerians by the end of 2014.
Jonathan gave the assurance while commissioning the NIPP 500MW Omotosho II Power Station at Omotosho in Okitipupa Local Government Area of Ondo State.
He said that his optimism was based on the progress in the completion of the ongoing 10 independent power projects spread across the country.
“My administration is committed to boost electricity supply in the country. Today, we are in Ondo State to commission Omotosho Power Plant that will also serve the people of these areas and improve electricity supply in the country.”
But in spite of the government’s assurances, pundits doubt that uninterrupted and stable power supply to Nigerians would be achieved by the end of 2014.
Mr David Ladipo, whose company, Azura, is spending 700 million dollars to build a 450 MW plant in South Africa,  insists that with  the situation on ground, it will still take Nigeria 50 years from now to enjoy stable power supply.
Ladipo told Reuters news agency that Nigeria would need about 140,000MW to guarantee stable power supply.
‘’Nigeria is still scores of years away at this threshold. At present, it generates a meagre 4,000 MW for a population estimated at 170 million.
‘’South Africa, with a population of about 50 million people, produces about 40,000 MW  of electricity and has been trying in recent years to increase output.
“It will probably take Nigeria another 50 years before it attains the same level of electricity consumption per capita as South Africa currently enjoys today,” Ladipo said.
However, Gov. Babatunde Fashola of Lagos State believes that with patience and commitment, Nigerians will soon enjoy the dividends of the ongoing power sector reforms.
Fashola expressed the optimism in Lagos at the closing ceremony of the 7th Lagos Economic Summit, tagged: Ehingbeti. According to him, the privatisation of the power sector will not be successful without the cooperation of investors and consumers.
He urged the public to develop energy conservation culture and manage existing power infrastructure adequately. “We should desist from illegal connections of electricity and ensure that our bills are paid appropriately.
“Electricity poles should not be used as speed breakers by reckless drivers; we should all protect the infrastructure from being damaged,’’ the governor said.
The Minister of Power, Prof. Chinedu Nebo, shares similar sentiments, noting that the Federal Government has concluded plans to explore ways of implementing the Indian power sector model in order to further boost the nation’s capacity to generate more power.
Nebo stated this recently in Abuja when he received a delegation on power from India.
The minister said that the Nigerian power sector which was still in a transitional stage after the privatisation still had a lot to learn  from the Indian experience.
According to him, this is because of the peculiarity between both nations’ power sector. He said the ministry would soon summon a stakeholders’ forum of all Generating Companies (GENCOs), Distribution Companies (DISCOs) and the regulatory bodies to take a closer look on how India transformed its power sector.
Nebo also invited the Indian delegation to the first National Council on Power conference slated for August 2014 in order to have a robust discussion.
The minister assured the delegation that the Federal Government was committed to achieving 10,000 MW by the end of the year despite the challenges.
Speaking on behalf of the DISCOS, the Chief Executive Officer of Eko Disco, Mr Oladele Amoda, said the company had already had a technical arrangement with Tata of India.
He urged the India delegation to take seriously the issue of transfer of technology so as to fast-track the development of the sector.
The Indian High Commissioner to Nigeria, Mr Ajjampur Ghenashyam, who also spoke,  advised Nigeria, as the hub of economic activities in the West African sub-region, to take the lead in the development of regional power market.
He said that India had achieved over 400 per cent leap in generation capacity in the last 10 years due to the competitiveness of the market.
Ghenashyam said countries like Nepal, Bangladesh, Bhutan and Pakistan had already been enjoying from seamless cross-border market and this had further boosted confidence for investment flow into the sector.
The envoy said that India was ready to partner with Nigeria in the development of the nation’s power sector.
Nonetheless, analysts have advised the government to also invest in the development of alternative sources of energy, such as wind and solar in order to boost the capacity of the country to meet its energy requirement.
They also advise the government to fast-track the completion of the NIPP projects in order to realise the objective of providing uninterrupted power supply to Nigerians by the end of 2014.
Mr Adamu,writes for   News Agency of Nigeria (NAN).

 

Sani Adamu

L-R:  Chairman, Liaoning Efacec, Chief Sam Amyamele, Vice President, Engineering, Mr Li Jiawei, Vice President, International, Ms Hliang Xae Li and Minister of Power, Prof. Chinedu Nebo, signing a memorandum on power in Abuja, recently.

L-R: Chairman, Liaoning Efacec, Chief Sam Amyamele, Vice President, Engineering, Mr Li Jiawei, Vice President, International, Ms Hliang Xae Li and Minister of Power, Prof. Chinedu Nebo, signing a memorandum on power in Abuja, recently.

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TotalEnergies, Conoil Sign Deal To Boost Oil Production

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TotalEnergies has signed agreements with Conoil Producing Limited under which to acquire from Conoil a 50 per cent interest in Oil Processing Licence (OPL) 257, a deep-water offshore oil block in Nigeria.
The deal entails Conoil also acquiring a 40 per cent participating interest held by TotalEnergies in Oil Minining Lease (OML) 136, both located offshore Nigeria.
Upon completion of this transaction, TotalEnergies’ interest in OPL257 would be increased from 40 per cent to 90 per cent, while Conoil will retain a 10% interest in this block.
Covering an area of around 370 square kilometres, OPL 257 is located 150 kilometers offshore from the coast of Nigeria. “This block is adjacent to PPL 261, where TotalEnergies (24%) and its partners discovered in 2005 the Egina South field, which extends into OPL257.
Senior Vice-President Africa, Exploration & Production at TotalEnergies, Mike Sangster, said “An appraisal well of Egina South is planned to be drilled in 2026 on OPL257 side, and the field is expected to be developed as a tie-back to the Egina FPSO, located approximately 30 km away.
“This transaction, built on our longstanding partnership with Conoil, will enable TotalEnergies to proceed with the appraisal of the Egina South discovery, an attractive tie-back opportunity for Egina FPSO.
“This fits perfectly with our strategy to leverage existing production facilities to profitably develop additional resources and to focus on our operated gas and offshore oil assets in Nigeria”.
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“COP30: FG, Brazil Partner On Carbon Emissions Reduction

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The Federal Government and Brazil have deepened collaboration on climate action, focusing on sustainable agriculture, renewable energy, and the reduction of black carbon emissions.
The partnership is anchored in South-South cooperation through the Brazil-Nigeria Strategic Dialogue Mechanism, which facilitates the exchange of ideas, technology, and policy alignment within the global climate framework, particularly the Paris Agreement.
The Executive Secretary, Amazon Interstates Consortium, Marcello Brito, made the disclosure during an interview with newsmen, in Abuja, on the sidelines of the 2025 COP30 United Nations Climate Change Conference, held in Belem, Brazil.
Brito emphasized that both nations are committed to global efforts aimed at curbing black carbon emissions, a critical component of climate mitigation strategies.
“Nigeria and Brazil are collaborating on climate change remedies primarily through the Green Imperative Project (GIP) for sustainable agriculture, and by working together on renewable energy transition and climate finance mobilisation,” Brito said.
“These efforts are part of a broader strategic partnership aimed at fostering sustainable development and inclusive growth between the two Global South nations,” Brito added.
TheTide gathered that President Bola Ahmed Tinubu announced an ambitious plan to mobilize up to $3 billion annually in climate finance, through its National Carbon Market Framework and Climate Change Fund, positioning itself as a leader in nature-positive investment across the Global South.
Represented by the Vice President, Senator Kashim Shettima, Tinubu made the announcement during a high-level thematic session of the conference titled ‘Climate and Nature: Forests and Oceans’
Tinubu stressed that Nigeria’s climate strategy is rooted in restoring balance between nature, development, and economic resilience.
Hosted in the heart of the Amazon, on November 10—21, the 30th COP30 conference brought together the international community to discuss key climate issues, focusing on implementing the Paris Agreement, reviewing nationally determined contributions (NDCs), and advancing goals for energy transition, climate finance, forest conservation, and adaptation.
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DisCo Debts, Major Barrier To New Grid Projects In Nigeria ……. Stakeholders 

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Energy industry leaders and lenders have raised concerns that the high-risk legacy debts of Distribution Companies (DisCos) and unclear regulatory frameworks are significant barriers to the financing and development of new grid-connected power projects in Nigeria.
The consensus among financiers and power sector executives is that addressing legacy DisCo debt, improving contractual transparency, and streamlining regulatory frameworks are critical to unlocking private investment in Nigeria’s power infrastructure.
Speaking in the context of new grid-connected power plants, during panel sessions at the just concluded Lagos Chamber of Commerce and Industry (LCCI) Power Conference, Senior Vice President at Stanbic IBTC Infrastructure Fund, Jumoke Ayo-Famisa, explained the cautious approach lenders take when evaluating embedded or grid-scale power projects.
Ayo-Famisa who emphasized the critical importance of clarity around off-takers and contract structures said “If someone approaches us today with an embedded power project, the first question is always: Who is the off-taker? Who are you signing the contract with?” . “In Lagos State, for example, there is Eko Electricity and Excel Distribution Company Limited. Knowing this is important,” she said.
She highlighted the nuances in contract types, whether the developer is responsible just for generation or for the full chain, including distribution and collection.
“Collection is very important because you would be wondering, ‘is the cash going to be commingled with whatever is happening at the major DISCO level, is it ring-fenced, what is the cash flow waterfall,” she stated.
Ayo-Famisa pointed out that the major stumbling block remains the “high leverage in the books of the legacy DisCos.” Incoming project financiers want to be confident that their cash flows won’t be exposed to the financial risks of these indebted entities. This makes clarity on contractual relationships and cash flow mechanisms a top priority.
Noting that tariff clarity also remains a challenge, Ayo-Famisa said “Some states have come out to clearly say that there is no subsidy; some are saying they are exploring solutions for the lower income segments. So, the clarity would be on who is responsible for the tariff, is this sponsored?, Can they change tariffs?, In terms of if their cost rises, they can pass it on, or they have to wait for the regulator.
“Unlike, what you find in the willing seller-willing buyer, where they negotiate and agree on their prices. Now they are going into grid, there is Band A, Band B, if my power goes into, say, Ikeja Electric, or I have a contract with them, “am I commingled with whatever is happening across their multiple bands?”
Also speaking, Group Managing Director and CEO of West Power & Gas Limited, Wola Joseph Condotti, stressed the dual-edged nature of decentralization in the power sector.
“Of course, decentralization brings us closer to the people as the jurisdiction is now clear. You also know that your tariff would be reflective of the type of people living in that environment. You cannot take the Lagos tariff to Zamfara, and this is what has been happening before now in the power sector. So, decentralization brings about a more customized solution to issues you find on the ground.
“Some of the issues I see are those that bother on capacity. It was a centrally run system that had 11 DISCOs. Of the 11 DISCOs, I think there are 3 or 4 of us today that are surviving or alive, if I may put it that way. If you go to electricity generation companies, they are doing much better,” she said.
Condotti highlighted regulatory overlaps as another complication, especially when power generation or distribution crosses state lines.
She said, “Investors would definitely have a problem. Say if you have a plant in Ogun State supplying power to another state, say Lagos State; you are automatically regulated by NERC. But the truth is that the state regulator of Ogun State and Lagos State wants you to comply with certain regulatory standards.”
With the growing demand for reliable electricity and an urgent need for infrastructure expansion, the ability to navigate these complex financial and regulatory landscapes would determine the pace at which new grid-connected power projects can be developed.
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