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| Minister for Power, Babatunde Fashola touring a site in Benue state |
The inefficiencies in the privatised power sector have made the deposit money banks (DMBs) unwilling to provide loans to electricity generation and distribution firms as they are no longer convinced about the viability of investing in the power sector, judging by the happenings in the Nigerian Electricity Supply Industry, as The Punch reports.
Officials of the Federal Ministry of Power, Works and Housing, the Nigerian Electricity Regulatory Commission, the Nigerian Bulk Electricity Trading Company Plc, as well as those from the financial sector said the lenders were becoming very cautious about lending to investors in the power business. The inability of the power firms to meet their various contractual obligations to the NBET, gas suppliers, the DMBs and other service providers, had made some banks to shut their doors on loans to the electricity companies.
Also, it was learnt that the banks were not comfortable with the happenings around the tariff, as they argued that aside from the fact that the tariff was low, there was no sign that the Federal Government would raise it any time soon in order to adequately meet the revenue requirements of the power sector.
In a related development, the Transmission Company of Nigeria has said its on-going five year expansion programme, designed at expanding electricity transmission capacity to 11,500 Megawatts by 2019 will require $7.5 billion.
The Managing Director of TCN, Mr Abubakar Atiku, said this at a news conference in Abuja on Monday. He said part of the strategic plan, aimed at ensuring steady power supply, was to boost its transmission capability to 8,200MW by the end of 2018. He added that it would be realised by completing eight of its new projects in 2018.
Atiku said that the completion of the projects would eventually lead to a total transmission capacity of 11,500MW.He said that the ultimate expansion programme was designed to ensure the completion of 59 projects by 2019 in line with the envisaged Federal Government’s realisation of 10,000MW.
He explained that the five-year plan had also been carefully developed with the overall aim of realising an uninterrupted power supply with the realisation of 20,000MW by 2022.
Giving the breakdown of the measures envisaged to source the fund, Atiku said the project was expected to receive concessionary loans and grant of $3.4 billion from TCN’s support international finance agencies.
Furthermore, the Federal Government was expected to contribute $1.5 billion while the financing initiatives of TCN were expected to contribute $2.6 billion in realisation of the project.
Atiku said that to key into the incremental power plan of FG, TCN planned to realise the completion of 22 critical projects captured in the 2016 Budget.
He said that TCN increased its present transmission capacity from 5,500MW to 6,00MW, adding that efforts were on to increase the wheeling capacity to 7,500MW with the completion of 31 projects by 2017. He pointed out that TCN restored unavailable service equipment to boost and strengthen the national grid.
According to him, with the restoration of critical equipment hitherto neglected by the previous management, the transmission system has been relatively stable with zero system collapse.
The MD said that TCN was focused at ensuring that no power was left stranded in the generating stations, adding that efforts were being intensified to ensure stability of the national grid.
He said this was being archived through the introduction of changes in TCN’s operational ways of conducting business.
NAN
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