Stakeholders are expecting improvement in electricity transmission and distribution as companies embark on projects funded by a $250 million intervention of the Central Bank of Nigeria (CBN).
The fund meant to urgently fix existing dilapidated infrastructure in the area of electricity distribution and transmission would enable the Transmission Company of Nigeria (TCN) wheel more electricity on the short and enable distribution companies (DisCo) procure and repair their key interface infrastructure.
Although existing challenges, especially unsettled management issues have hindered some DisCos from accessing the fund, there are indications that some DisCos have ordered thousands of transformers, as some of the utility companies have been provided about N6 billion under the initiative.
Most stakeholders noted that the development of funding would offer consumers value for money which they are made to pay under the Service Based Tariff and improve the liquidity crisis in the power sector while addressing the menace of stranded electricity.
Energy Finance Expert, Dan Kunle noted that financing improvement in the transmission and distribution segment of the electricity market is sacrosanct.
Stating that the funding by the CBN is on the right path, Kunle noted that improving the manufacturing sector to perform better on the backdrop of improved electricity remained critical.
Speaking on the matter recently, Abubakar Aliyu, the Minister of Power, stated that the apex bank was already funding a $250 million project to ensure the rehabilitation of critical interfaces infrastructure between both segments to increase and stabilise power delivery.
This, according to him, is in addition to the Siemens Presidential Power Initiative (PPI) that will bring in additional $2.0 billion or more to the transmission grid from the government.
With the critical intervention, the minister said the government was expending almost $4 billion secured by the current administration to augment the grid, adding that much of the funds were being actively spent and the results will be felt soon.
Read also: $170m power project to boost transmission by 1GW – FG
According to him, the interface projects along with others already being embarked upon by TCN brings ongoing projects in the transmission segment alone to 135 ongoing projects with 30 completed key substation projects and 12 transmission lines.
Also speaking on the issue, Edward Eje, Market Operator at TCN, said the interface project was aimed at providing quick solutions at various transmission/distribution interfaces where there are challenges.
“This makes sense to me. It is a laudable measure to achieve a seamless and a hitch-free power transmission from the transmission stations to the distribution network,” Eje said.
Eje’s position also aligned with the comments by Nnaemeka Ewelukwa, the managing director and chief executive officer of Nigerian Bulk Electricity Trading Company (NBET)
Ewelukwa disclosed that the apex bank was able to identify critical projects that could quickly address and restore normalcy to the sector in the near term.
“The CBN has actually performed a very positive role in trying to sort out these electricity market challenges.
“The CBN is working with TCN and the Discos. This is even as the federal government is doing the Siemens project and TCN is implementing the report. And so the DISCOs and TCN worked together to come up with a list of some critical projects and I can’t be specific on the amount, maybe we can furnish that subsequently but that is what is happening,” he said.
The NBET’s boss said CBN decided to find those critical interventions so that there could be some quick wins even as the bigger project is being implemented.
In his intervention, an energy expert, Oyebode Fadipe, stated that one of the fundamental issues in the power sector was poor liquidity in the industry.
He added that while it is true that one of the expectations of the privatisation programme is that the sector would be self-funding so that the government would ultimately stop funding it, the benchmark had not been realised.
“It is in direct response to this liquidity challenge that the CBN was brought into the loop. There is therefore sense in the involvement of the CBN in the interface projects between Disco and TCN,” Fadipe said.
He stated that the action of the apex bank would help to bring more stability in the grid and by doing so, more people will be able to receive electricity for their use.
Fadipe stated that quality of supply is also expected to increase because in some locations where the transformers are overloaded, they would be uprated.
