Makinde flags-off construction of 11MW independent power plant

Governor Seyi Makinde at the weekend flagged off the construction of an 11MW Independent Power Project (IPP) in Ibadan, in the Oyo State Capital.

The project dubbed hybrid power plant is to be executed by Elektron Energy on a Build-Operate-Transfer model at the cost of N8 billion.

The facility will provide power to government facilities within the Oyo State Secretariat, Agodi, Ibadan and environs.

Other facilities to enjoy from the 11MW hybrid power solution include; 12 healthcare facilities, including Adeoyo Maternity Teaching Hospital, State Hospital Ring Road, the Lekan Salami Sports Complex, Adamasingba, the judicial complexes at Iyaganku and Ring Road, the state’s House of Assembly, and a selection of schools within a defined catchment from the generation plant at the Oyo State Secretariat.

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Speaking at the groundbreaking at the State Secretariat, Agodi, Ibadan at the weekend, Governor Makinde dispelled the notions that only the Federal Government could distribute energy, and that any power generated at the state or local level must be fed to the national grid before it can be distributed.

Citing Section 67(1) of the Electric Power Sector Reform Act 2005, which provides that, “Subject to such terms and conditions as the National Electricity Regulation Commission (NERC) may fix in the licence, a distribution license will authorize the licensee to construct, operate and maintain a distribution system and facilities..”, the Governor maintained that independent power distribution is legal.

He said the project which would be delivered in eight months is to cost N8,027,430,214, with the state government repaying the Elektron Energy for over a ten-year period within which the energy company will operate and manage the infrastructure.

He added that the Special Purpose Vehicle that Elektron Energy will use to execute the contract is Ibadan Hybrid Power Limited (IH Power), noting that IH Power will also be responsible for managing the distribution infrastructure through Ibadan Hybrid Distribution Limited, which will hold an Independent Electricity Distribution Network (IEDN) license.

Makinde said “‘Light’. This word means different things to different people. But when the average Nigerian talks about ‘light,’ they mean electricity – power supply.

“Nigeria has had a long history of problematic public power supply.
“Well, from the days of NEPA, through to the PHCN and now DISCOS, the problem has essentially remained the same. Nigeria has been unable to generate and distribute enough energy to provide a 24/7 power supply to citizens. In fact, at a time, people even changed the acronym NEPA to mean Never Expect Power Always.

“Over time, individuals who can afford to have purchased different sizes of petrol or diesel generators or invested in solar energy as alternative sources of power supply.

“But we are not here today to discuss the problem. We are here for one solution to this perennial problem – for the groundbreaking ceremony of the Oyo State Independent Power Project.

“Before I go into the details of this project, it is important to clarify issues related to power distribution in Nigeria.

“Some have stated that only the Federal Government has the power to distribute energy. So any power generated at the state or local level must be fed to the national grid before it can be distributed. This is only partly true.

“Under the Electric Power Sector Reform Act (EPSR), 2005, independent power distribution is allowed. Regarding “Distribution Licenses,” Section 67(1) states that “Subject to such terms and conditions as the Commission may fix in the licence, a distribution license will authorize the licensee to construct, operate and maintain a distribution system and facilities…”

“Based on this, the Oyo State Government is entering into a contract with Elektron Energy to finance and develop an 11MW hybrid power solution for the Oyo State Government and some of its facilities within the Oyo State Secretariat, Agodi, Ibadan and environs.

“The Special Purpose Vehicle that Elektron Energy will use to execute this contract is Ibadan Hybrid Power Limited (IH Power). IH Power will also be responsible for managing the distribution infrastructure through Ibadan Hybrid Distribution Limited, which will hold an Independent Electricity Distribution Network (IEDN) license.

“This 11MW solution is called a hybrid power solution because it comprises 10MW gas-fired power generation and a 1MW PV solar solution.”

He expressed confidence that “Elektron Energy has both the experience and the financial wherewithal to carry out this project as they already own and operate existing IPPs in Nigeria.”

“This IPP will also power not less 10km radius of public lighting under the ‘Light-Up Oyo’ project. And of course, as we say, where there is light, there is security and economic development.

He further disclosed that, although this project will initially serve Oyo State Government facilities, the government is already thinking of incorporating similar projects into the administration’s vision to facilitate the expansion of its economic base by making power available to industrial catchments with particular reference to the Moniya Business District.

“So, we are very excited about this project. The contractors have told me that it will be ready in six to eight months. Within the terms of our agreement, the Oyo State Government will repay the capital expenditure investment of Elektron Energy over a ten-year period within which the energy company will operate and manage the infrastructure.

Speaking earlier at the event, the state commissioner for Energy and Mineral Resources, Seun Ashamu highlighted the various efforts of his ministry to ensure the government goals are achieved.

He said “Therefore, it is the projects like this that will ensure the sustainability of much of what we are doing in the state as we will have the guarantee of 24 hours electricity.
“What we have today is an 11MW gas and solar hybrid plant with a dedicated distribution infrastructure.

“Once commissioned it will result in improved productivity, eradication of dirty fuel generation, increased productivity of government staff and long-term cost savings.

“The impact of the project is measurable: it will impact the productivity of the Executive (about 25million man-hours), Judiciary and Legislative arms of government; will power 12 healthcare facilities (where about 15,000 patients are seen annually); a 10km radius of public lighting; and selected schools within the radius.

“The IPP will initially serve Oyo State Government facilities but has the potential to spill over to industry and the wider society, thereby feeding into Administration’s vision to facilitate the expansion of the State’s economy while bettering livelihoods.”