Liquidity crisis impeding Nigeria’s power sector growth – Adighije, MD NDPHC

Jennifer Adighije is the Managing Director of the Niger Delta Power Holding Company (NDPHC). She holds a master’s degree in wireless networks and telecommunications from Queen Mary University of London, UK, and a bachelor’s degree in electrical and electronics engineering from the University of Lagos. A seasoned engineer, Adighije has honed her expertise across both the private and public sectors, equipping her with a comprehensive understanding of the energy landscape. In this exclusive interview with the Abuja BusinessDay team led by John Osadolor, Managing Editor; Onyinye Nwachukwu, Abuja Bureau Chief; and Ladi Patrick-Okwoli, Adighije shares her bold vision for NDPHC, emphasising the need for cost-reflective pricing to help tackle persisting liquidity challenges in the electricity sector.Excerpts:

Talk to us through your background, experience, and how they prepared you for this role.

I was appointed by Mr. President on August 19, 2024, and officially resumed office on August 26, 2024, to lead the NDPHC. I am an electrical and electronics engineer. I bring a wealth of experience spanning both the private and public sectors. My career began at PHCN, now TCN, where I worked as a transmission engineer at the Apo Transmission Substation. I then transitioned to the private sector, where I served as a systems and networks engineer in the global telecommunications industry. After several years in the private sector, I returned to public service and joined the Central Bank of Nigeria (CBN), working in the Procurement Department. My time at CBN reinforced my commitment to corporate governance, particularly the principles of accountability, transparency, and responsibility—values that have shaped my professional ethics. These principles have been instrumental in my leadership at NDPHC, where I emphasise due process, ethical decision-making, and a culture of excellence. Leading by example, I am fostering a team that upholds the highest standards of corporate ethics, ensuring that we build an organisation defined by integrity and efficiency. Having demonstrated these qualities, I am able to build a team that demonstrates the highest level of corporate ethics. And that’s the organisation we are building under my leadership.

“Specifically, one of the strategies in terms of generation is that we now have a robust recovery plan for our power plants.”

What’s your strategic vision for the Niger Delta Power Holding Company, and plans to achieve it?

With regards to vision, I and my team of executives communicated it very clearly to the staff of the organisation. We do not just want the staff to be partakers of the success; we want them to actively participate in the success story. The vision is built around optimisation, anchored on three pillars. Pillar one is optimising the performance of our assets so that we can enhance revenue. Pillar two is optimising our processes so that we can enhance our efficiency across the organisation. And pillar three would be leveraging human capital and technology to sustain transformation over time.

Those are the three core strategic goals of the team, which we have communicated across all the departments in the organisation. We have also come up with strategies to ensure that the corporate vision is achieved individually and collectively across the organisation. Communication is very key in attaining any vision. And because we communicate the vision alongside the goals and the objectives, it aligns with the aspirations of the staff of the organisation. The staff are already beginning to see actually new steps that we are taking to ensure that we attain the vision and accelerate growth. So far, the feedback from the staff has been very positive. That has also impacted the level of progress we have made.

How do you intend to lead the company, particularly in power generation?

In leading the organisation to success, like I said, we deployed very effective strategies that would ensure that we attain a goal. The strategy is a successful plan that would ensure that goals and objectives are turned into reality. The strategies are across the departments and the entire organisation, which would ensure that we attain our vision—both short, medium, and long term. As a generation company, NDPHC is primarily assessed by power outputs. We have an effective strategy in place to ramp up our generation. Let me also mention, very humbly, that prior to my leadership, our average daily dispatch was below 500 megawatts. But as we speak, our average daily dispatch is usually above 800 megawatts, which means that we have improved very significantly our generation outputs to meet market demands. And this is possible because we have a winning strategy.

Specifically, one of the strategies in terms of generation is that we now have a robust recovery plan for our power plants. We also have a very proactive procurement plan that enables us to do preventive maintenance across our power plants. It has also helped us to build sustainability and efficiency across our power plants, which are generally measured by the availability factor. Across each of the power plants, we have improved the availability factor very significantly because of an effective recovery and restoration plan in place.

Like you do know, we have ten plants; seven are commercially operational, and three are still a work in progress. Our commercially operational plants include the Calabar power plant, which is a 575 megawatts power plant; Alaoji power plant, which is undergoing upgrades from open cycle to combined cycle, and has a 450 megawatts installed capacity; Ihovbor power plant in Edo state, which is a 450 megawatt capacity plant as well; Sapele power plant, another 450 megawatt plant; Omotosho power plant, which is another 450 megawatt plant, and Olorunsogo power plant in Ogun state, which is also 675 megawatts. These are the commercially operational power plants. The Egbema and Omoku power plants are still works in progress at different stages of completion. Also, we have the Gbarain power plant, which is our smallest power plant, with two generating units of 275 megawatts.

Does the NDPHC intend to leverage opportunities in renewable energy and off-grid solutions?

Let me take you back historically to the concept of the National Independent Power Project (NIPPs) managed by NDPHC. The NIPP was actually developed in two phases. Phase one is relying on fossil fuels for generation, which is why we established 10 power plants, which are gas-fired. The NIPP phase two is actually in line with the energy transition plan. The proceeds from the sale of the power plants in the NIPP phase one are supposed to be used to start the NIPP phase two, which is relying on renewable energy in the sense of hydro, solar, or wind power plants. From inception, we had always factored in that transition from NIPP phase one to phase two. So definitely there are plans in place to ensure that we start the NIPP phase two soon.

We are looking to collaborate with investors to start the NIPP phase two, even before we conclude the privatisation of NIPP phase one. We are currently aligned with Mr. President’s energy transition plan in ensuring that we can quickly begin to make investments that can create plants with renewable energy sources, which will be cheaper and more efficient for us as a company and as a nation. In certain instances, we have already started pre-feasibility studies. So it’s a work in progress. But I must add that privatisation is not our process; it is driven by the Bureau of Public Enterprise, and so they decide on when that will happen.

Any plans to participate in state-led power generation as provided in the new electricity Act?

Certainly, and that is the essence of the Electricity Act. In establishing bilateral relationships, we have to go into some sort of partnership with the states. For these states that have already transitioned to their own electricity regulatory authorities, we have already written to the governors to let them know that we are available; they can always come to us as their preferred generation franchisee to be able to meet the electricity demands in their states. We want to partner with them to also create the enabling frameworks to unlock the potential and enhance the socio-economic development of their states by delivering quality and sustainable electricity.

How would you assess Nigeria’s power sector?

The power sector has evolved and will continue to evolve. But the Electricity Act 2023 is a game changer for the sector because it is an advancement on the Electricity and Power Sector Reform Act of 2005. It has developed very significantly to a large extent because what it aims to achieve is a decentralisation of the power sector. This will now liberate each of the subsectors, the generation, the transmission, and the distribution subsectors, essentially opening up the Nigerian Electricity Supply Industry (NESI), the electricity market. It is actually to our advantage because the industry is transitioning to bilateral transactions. This means that we can trade bilaterally with off-takers and collaborate with TCN, thereby opening market opportunities for us. So, the Electricity Act is a game changer for the sector. And I believe that we will begin to make significant improvements because the sector will now be more enticing and attractive for investments. We know that no nation can thrive when the businesses and people are not thriving. And the businesses and the people cannot thrive when there is no access to quality, affordable electricity.

On our own part, despite being a generation company, NDPHC also has the mandate to carry out interventions to fix some of these inadequacies in the sector. If you may know, we have invested billions of dollars in enhancing the transmission grid. And we have also invested hugely in the distribution subsector. There’s no distribution company in Nigeria that has not benefited from our intervention projects in terms of distribution substations, transformers, and even lines and feeders. We do interventions across the entire gas-to-energy value chain. And that is because we are concerned about enhancing access to quality electricity. Now, if that quality is not provided by the distribution company, I’m not here to hold a brief for any of them. But I can tell you that on our part as NDPHC, we are very keen on ensuring that we sustain that value chain so that the customers can also enjoy quality electricity. When they enjoy quality, they demand more, and when they demand more, the distribution companies can also demand more from us, and we can dispatch more to the grid. It is a win-win situation for all of us.

Read also: NDPHC to leverage technology, others for company’s growth – Adighije 

The power sector faces a myriad of challenges despite all these efforts. What do you see as the missing link and possible solutions?

I dare say that this government has demonstrated a keen interest in turning around the power sector. The passage and successful commencement of implementation of the Electricity Act have shown that Mr. President has the will to make a difference. Some bold moves have been made in that regard. I will tell you that the greatest challenge of the industry is the liquidity crisis, which arose from several factors, one of which is that the electricity consumed by the majority of Nigerians, is not cost-reflective. What that means is that a huge subsidy burden is on the government to provide liquidity. As generation companies, we are unable to recoup our costs because only a percentage of our invoices are settled. And this is because on the distribution side, they are also unable to recover all the costs of energy that they sell to their customers.

That said, we are confident that certain initiatives, for instance, the Presidential Metering Initiative, will bridge some of these gaps, enhance collection and billing rates so that the discos remittances can improve, and enhance generation too. Don’t forget, it is a chain. When the disco remittances improve, our own remittances, settlements on our invoices also improve. With the introduction of the Band system, where, for instance, a cost-reflective tariff has been introduced on Band A, things will continue to get better. I do know that there are also plans to implement such tariffs across other bands, amongst other plans that Mr. President is putting in place—interventions, policies, and programs that would help to ramp up liquidity in the sector. If liquidity is ramped up and our cash flow improves, then we can also improve the quality of service. But Nigerians need to first understand that premium service is tied to our ability to have the cash flow to sustain it.

So in terms of challenges, the major one is access to liquidity. And relating to that is access to affordable capital. If our commercial banks are able to give sector practitioners single-digit loans, for instance, we would see a lot more capital injection into the sector to either scale or improve on infrastructure that would enhance our transmission system and then distribution system. That way, we can meet up with the demands of the industry, and our grid availability and distribution availability would also be optimised.

NERC said that four of your plants did not generate electricity within the second quarter of 2024. Why was that, and are they restored now?

Well, I didn’t get to see that information. But even if that was the case, I can tell you that it is not the case today. Like I mentioned earlier, I came on board with a robust recovery plan. Where we had outages, we have already recovered a number of those units. Under my leadership in the last six months, we restored one additional unit in Calabar. We’ve restored two units in Omotosho. We’ve restored two units in Ihovbor. We’ve restored one unit in Sapele. So it means in total, we’ve restored about 700 megawatts in addition to our availability, and of course, the transmission grid capacity.

How does your company balance the need for increased power generation with the quest for environmental sustainability and social responsibility?

As a company, we are very conscious about the environment. We operate our power plants in a manner that is environmentally friendly. One of our power plants is undergoing an upgrade from open to combined cycle, which is essentially supposed to be a proof of concept because we plan to do that across all our power plants. So in upgrading from an open cycle to a combined cycle, what that means is that we will reduce our reliance on fossil fuel. This means that even our generation will be environmentally friendly. It is of double benefit because we will be able to enhance our generation capacity. Therefore, by the time we install the heat recovery system across the plants, it will improve our efficiency and dispatch by almost 100 percent. That way also, we will be able to operate in line with the environmental standards and Mr. President’s energy transition plan.