The Transmission Company of Nigeria has signed an agreement with a consortium of Chinese companies to secure financing required for projects that will enhance the creaking grid, says TCN head, Sule Abdulaziz at an energy conference in Dubai, on Tuesday.
During a panel session at the Middle East Energy Conference, Sule said securing funding to complete over a hundred ongoing transmission projects including building transmission lines and substations has been because it has struggled to raise funding to finish them.
“But now there are companies coming to us with PPA, we signed MOUs and agreements with some of them so that they can do some of these projects.”
“They will be earning from it until they have recovered all their money, then the assets belong to the TCN,” he said.
The TCN boss said the three funding sources – budgetary expenditure, donor funding from multilateral organisations including the World Bank and the African Development Bank; and through the TCN’s own internally generated revenue were insufficient to meet the financing required to fund on-going transmission projects.
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“We have met 16 companies mostly from China and there is another one, an Indian company called Paras. We have already gone into such agreements with them,” he said.
The TCN boss told BusinessDay he is unable to disclose the specific details of the deals after his presentation but a search in foreign business press showed that TCN selected a handful of Chinese firms with recent ones being bids for $155 million network extension last April.
The Chinese consortium made up of Xian Electric Engineering Co. Ltd/Sumec Complete Equipment & Engineering and North China Power Engineering Ltd was awarded the contract for the construction of high-voltage (330 kV) transmission lines for the Nigeria Transmission Expansion Project 1 (NTEP 1).
China, Nigeria’s biggest bilateral creditor, is reported to be scaling back lending in Africa amid its worsening growth woes.
Nigeria’s external debt owed to China accounts for 83.57 percent of its total bilateral debt as of June 30, 2022, totalling $3.9 billion, a 12.7 percent increase from $3.5 billion in the same period last year, according to data from the Debt Management Office (DMO).
In 2020, Nigeria’s debt office said the loans from China were being used to finance infrastructure projects in the country.
It said the projects were 11 as of March 31, 2020, and they include the Nigerian Railway Modernisation Project (Idu-Kaduna section), Abuja Light Rail Project, Nigerian Four Airport Terminals Expansion Project (Abuja, Kano, Lagos, and Port Harcourt), Nigerian Railway Modernisation Project (Lagos-Ibadan section) and rehabilitation and upgrading of Abuja-Keffi-Makurdi Road Project.
Abdullaziz, TCN’s boss also said the eligible customer declaration is helping the company to strike new deals with investors.
A landmark energy industry event, the Middle East Energy returned this year at the Dubai World Trade Centre from 7 – 9 March, offering a platform for innovative power companies to showcase their latest energy trends from smart solutions to renewable and clean energy.
Organised by global exhibitions organiser Informa Markets, the 48th edition of the event brought together buyers and sellers from across different countries to explore the latest advancements in energy products and solutions and provide opportunities to network with international energy suppliers, discover products and solutions that are changing the energy landscape, and build long-lasting business relationships.
According to the organisers, the goal is to guide the Middle East and African region through the energy transition in order to build resilient energy systems and infrastructures.
