• Saturday, April 20, 2024
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Stakeholders await gains of CBN’s N103bn TCN/DisCos interface on power supply

Stable and transparent policymaking is essential to reach Nigeria’s electrification targets

As part of an emergency approach to ensure the stability of the country’s grid and power system, the Central Bank of Nigeria (CBN), is currently providing about N103billion ($250 million) for the rehabilitation of critical interfaces between transmission and distribution to increase and stabilize power delivery.

The project, which will strengthen the interface between the TCN and the DisCos is expected to gulped about N104 billion and spread across critical locations in the country.

Stakeholders are however divided, insisting that although interventions in the sector, especially the alignment of the interface between TCN and DisCos remains critical, it was high time to ensure that the sector operates without support from the government.

Recall that the power sector was privatized in 2013 to ensure that power supply improves such that the nation’s economy is energized and government involvement in the sector, especially in terms of funding reduces.

However, the reverse is the prevailing reality as the sector remained epileptic with supply currently hovering at 2000 megawatts.

Abubakar Aliyu, minister of Power, had earlier stated that the CBN is already funding a $250 million project to ensure the rehabilitation of critical interfaces infrastructure between transmission and distribution to increase and stabilize 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.

While the grid has continued to fail with two system collapses this week alone, Aliyu said almost $4 billion was secured by this administration to augment the grid. It should be noted that many of the funds are being actively spent and the results will be felt over time.

According to him, the interface projects along with others already being embarked upon by TCN bring ongoing projects in the transmission segment alone to 135 ongoing projects with 30 completed key substation projects and 12 transmission lines.

Edward Eje, market operator at TCN, said: “The interface project is 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 hitch-free power transmission from the transmission stations to the distribution networks.”

Nnaemeka Eweluka, managing director and chief executive officer of Nigerian Bulk Electricity Trading Company, (NBET), disclosed that the apex bank was able to identify critical projects that could quickly address and restore normalcy.

“So, basically what happened was that the CBN has actually performed a very positive role in trying to sort out this electricity market challenges. The CBN is working with TCN and the DisCos. CBN asked what are those critical projects that if they are addressed today can quickly yield results in the sector.

“This is even as the Federal Government is doing this Siemens project and TCN is implementing the report, what are those critical projects that if they are done today, will unlock additional megawatts quickly.

“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 CBN decided to find those critical interventions so that there could be some quick wins even as the bigger project is being implemented.

Bode Fadipe, an energy expert, stated that one of the fundamental issues in the power sector include poor liquidity, adding that whilst it is true that one of the expectations of the privatisation programme is that the sector would be self funding so government would ultimately stop funding it, that benchmark has 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.

According to him, the gains of the DisCo/TCN funded interface project are huge as they would help to bring more load into the grid and by so doing, 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 upgraded.

Pleading anonymity, an energy experts, who is a key investor in the DisCos, told The Guardian that the intervention in the interface project shows the obvious gap that have been neglected over the years by the current administration.

He insisted that government had failed to admit the gap in TCN, adding that the current intervention is mainly determined and handled by the CBN, TCN as well as Nigerian Electricity Regulatory Commission (NERC) since the funding is coming from the government.

Insisting that the intervention is critical and requires sustainable approach possibly on a yearly basis, he noted that the development is however not devoid of bureaucratic challenges, which are associated with the government.

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Kunle Olubiyo, a consumer advocate and legal experts, noted that the continuous intervention while critical shows that such intervention shows that the essence of privatizing the sector has been defeated, adding, “It is not suppose to be.”

Olubiyo noted that the poor governance system, lack of monitoring, accountability and weak set up of the market were responsible for the financial issues in the sector.

“At this point, we no longer need a prophet to tell us that things are not working. It is a supposedly privatized sector and the essence of it that it is meant to be private sector driven. That is not how it is,” Olubiyo stated.

According to him, there is urgent need to review the sector to ensure that the sector work optimally.