Nigeria gets US praise over power privatisation

Barack ObamaNigeria’s double-edged power privatisation exercise has received commendation from the government of the United States of America. Carlos Pascual, United States special envoy and coordinator for international energy affairs gave the commendation at the just concluded Nigerian Investment summit in New York, describing the exercise as unprecedented.

He said that there are few countries in the world where such a wholescale exercise was carried out to completion, especially the privatisation of both the generation and distribution subsectors at the same time.

“There a few countries in the world that have attempted this type of project but it has to be watchful to ensure that it works,” he said.

The US envoy however cautioned the Federal Government to ensure full implementation of the exercise to avoid its failure.

He noted that in the course of implementing the privatisation exercise there are huge business opportunities that would emerge, adding that the country must increase its power generation about four times of the planned 10,000 megawatts.

In addition to the privatisation of the generation and distribution power assets, the Federal Government in its bid to boost generation to its planned 10,000 target has continued to build 10 additional power plants.

Eight of these power plants were initially designed as open –cycle gas turbine (OGGT) power plants and the remaining two are designed as combined-cycle gas turbine (CCGT) power plant. Seven of the OGGT plants have the capacity to be expanded to combined gas turbine (CCGT) configuration. All the generating plants have a combined capacity in excess of 5,453megawatts and 4,774 megawatts net.

The building of the plants are under the supervision of the Niger Delta Power Holding Company (NDPHCN), the state-run energy provider in Nigeria.

The NDPHC was conceived in 2004 as major fast track initiative to add significant new generation capacity to Nigeria’s electricity supply system. The generating projects are accompanied by supporting transmission, distribution and gas transport infrastructure projects.

The Geregu II gas-turbine power plant in Ajaokuta in Kogi State is one of the plants that has been completed on schedule, which commissioning comes on Thursday. As part of the turnkey construction project, Siemens supplied three E-class gas turbines as well as the associated generators. With an electrical capacity of 434 megawatts (MW), the plant will play an important role in the expansion of the power supply in Nigeria.

Ajaokuta is located approximately 200 kilometers south of the Nigerian capital Abuja. Following the Afam V and Geregu I plants, Geregu II is now the third gas-turbine power plant to be constructed by Siemens in Nigeria as a turnkey project and completed on schedule.

The privatisation journey began in 1999 with the constitution of the Electric Power Sector Implementation Committee by NCP to undertake a comprehensive study of the electricity power industry. It took a foothold when the frontline bidders for the electricity distribution companies emerged in the course of the year and when clear winners of the bids for both generating and distribution companies emerged.

There are 11 Distribution Companies (Discos) and 6 Generation Companies (Gencos) and then there is the Transmission Company of Nigeria (TCN).

Following the approval of the National Council on Privatisation chaired by Vice President Namadi Sambo late last year, the preferred bidders paid a total of $335,854,986.15, which the transaction process required them to pay as bid guarantees.

The distribution companies and preferred bidders are Abuja Distribution Company, Kann Consortium; Benin Disco, Vigeo Power Consortium; Eko Disco, West Power and Gas; Enugu Disco, Interstate Electrics Limited; Ibadan Disco, Integrated Energy Distribution and Marketing Limited.

NEDC/KEPCO Consortium for the Ikeja Disco; Aura Energy Limited for Jos Disco; Sahelian Power Limited for Kano Disco; 4Power Consortium for Port Harcourt Disco, and Integrated Energy Distribution and Marketing Limited for the Yola Disco.

For the power generation companies, North-South Power Limited, Shiroro Hydro Power plc; Mainstream Energy Solutions for Kainji Hydro Power plc; CMEC/EURAFRIC Energy Limited for Sapele Power plc; Amperion Power Distribution Limited for Geregu Power plc, and Transcorp Consortium Ughelli Power plc.


Information from Business Day was used in this report.



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