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Buhari leaves indelible mark on ailing power sector

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Days after Muhammadu Buhari’s inauguration as President in May 2015, memes of blocked bottles of beer appeared on Twitter, with many saying his body language had stirred the sleeping electricity utilities into action. The moment was not sustained but the Nigeria electricity supply industry (NESI) saw improved fortunes.

Buhari’s desire to leave a legacy is shown in the many billions of naira worth of intervention funding to the power sector, brilliant policies to drive the renewable energy sector, his willingness to cut down electricity subsidies and give the sector an electricity pricing model that could guarantee commercial returns.

The government passed a major minigrid regulation, which spurred massive investments into the renewable energy sector in 2018. Funding support from multilateral agencies including the World Bank equipped the Rural Electrification Agency to fund several small projects across Nigeria.

However, his inability to either privatise or properly fund the Transmission Company of Nigeria saw it replace distribution companies (DisCos) as the weakest link in the value chain. Buhari could not liberalise gas pricing and ensure every customer had meters and crazy bills would tarnish any legacy in the sector in the minds of consumers.

Power Sector Recovery Program (PSRP)

Conceived in 2017, the PSRP is a series of carefully-thought-out policy actions, operational and financial interventions to be implemented by the Federal Government of Nigeria to attain financial viability of the power sector, and reset the NESI.

The programme approved by Federal Executive Council began the process of eliminating accumulated deficit, improve DisCos performance and improve market viability.

Revenue surge

The total revenue generated in the power sector, including payments by DisCos and government agencies, crossed N80 billion in January for the first time, according to the official data, indicating that the industry is on the cusp of becoming a N1 trillion cash-generating industry.

This has been largely driven by reforms in electricity pricing through the service-based tariff, improved metering and intervention funding that has helped DisCos’ investments into improving network capability.

Intervention funding

The Buhari administration continued with the intervention funding started by the President Goodluck Jonathan administration to the power sector. By the end of his tenure, over N1.7 trillion has been spent.

Read also: Nigeria’s onshore oil output dips as IOCs hold sway in offshore

Analysts say the impact has been muted and has fed dependency mentality. “These have led to a situation where everyone across the value chain is experiencing losses, from GenCos to DisCos. The capacity of these organisations have massive holes unplugged; so it’s a case of, with so much liability, how do we keep investing?” said Jide Pratt, chief operating officer of Aiona and country manager of Trade Grid.

Metering gap

Metering in the current administration recorded a boost. Data obtained from the National Bureau of Statistics revealed that the number of metered end-use customers grew from 3.15 million in 2015 to 5.13 million in 2022. However, the challenges with estimated billings still persisted.

Notable achievements

The incremental 4,000MW+ of power-generating assets including the Zungeru Hydro, Kashimbila Hydro, Afam III Fast Power, Kudenda Kaduna Power Plant, the Okpai Phase 2 Plant and the Dangote Refinery Power Plant.

The Buhari-led Federal Government and German electricity company Siemens signed a power agreement, which could double Nigeria’s electricity generation and raise distribution capacity three-fold to 11,000MW by 2023 at the cost of over $3 billion.

The Maiduguri Emergency Power Project, constructed by the Nigerian National Petroleum Company Limited (NNPC) to supply 50MW of electricity to Maiduguri and its environs, has been completed and inaugurated.

There was ground-breaking in March 2023 for the first solar cell production factory in West Africa, being built by the National Agency for Science and Engineering Infrastructure in Gora, Nasarawa State.

The Solar Power Naija launched in April 2021 to deliver 5 million off-grid solar connections, impacting more than 20 million Nigerians, and financed through Central Bank of Nigeria loans, as well as through partnerships with Niger Delta Power Holding Company, NNPC, and the Nigeria Sovereign Investment Authority.

The Nigeria Electrification Project is a $550 million programme being implemented by the Federal Government of Nigeria in partnership with the World Bank and African Development Bank.

The Special Grid Interventions by Federal Government has many key grid initiatives with more than N125.2 billion budgeted between 2015 and 2021 for TCN, and Development Finance Funding through the World Bank, AFDB, AFD, JICA and others of up to $1.7 billion.

Another achievement is the constitutional amendment signed by Buhari on March 17, empowering states to generate, transmit, and distribute electricity in areas covered by the national grid.

“This move is geared towards restructuring the power sector landscape to entrench competition and improve the experience of consumers in the Nigerian Electricity Supply Industry,” said Ayodele Oni, an energy lawyer and partner at Bloomfield Law Practice.

Criticisms

The power sector under Buhari witnessed series of incessant national grid collapse. Over 98 full or partial grid collapses were recorded during his administration.

His administration also failed to fulfill its 2015 election campaign promise to increase power generation and distribution to 40,000MW between four and eight years.

Some project timelines including for Siemens project were missed.

“On the whole, I think the Buhari’s administration has been unable to match good intentions with success, and the only major plus will be the Siemens deal,” Pratt, an energy analyst, said.