How Atiku, Obi plan to fix power problem

Two of the main contenders in Nigeria’s next presidential election, Peter Obi of the Labour Party and Atiku Abubakar of the Peoples Democratic Party, have laid bare their plans on how to solve the country’s electricity problem.

The country’s beleaguered power sector is seen to be moving at a snail’s pace, with the national grid collapsing last month for the sixth time this year, despite over N1.6 trillion interventions by President Muhammadu Buhari’s administration.

Obi said he would achieve 15,000 megawatts (MW) of electricity in four years – an ambition no administration has attempted.

The Labour Party candidate, who travelled to Egypt in June, said he studied the dynamics of the country’s power generation and met with the companies involved.
Egypt, with a population of 103 million, generates over 50,000MW of electricity.

“I visited the power plants in Egypt to see what they were able to do within those five years. I visited the companies that executed the projects. Held a very useful meeting with the CEO of the company, visited the power holding company of Egypt and other agencies involved to learn what they did,” Obi said on Channels TV.

“I also visited the financiers of the project, what they were able to do can easily happen here. And my commitment is that Nigeria will be able to generate, transmit and distribute 15,000MW within a four-year period of a government,” Obi added.

For PDP’s Atiku, the first step in solving the country’s perennial power problems will be to launch a $20 billion consortium of private sector institutions to establish an Infrastructure Debt Fund to primarily mobilise domestic and international private resources for the financing and delivery of large infrastructure projects.

He added that due to the priority that he places on the power sector, upon which the successes of other sectors are hinged, “I am proposing innovative financing of infrastructure that will involve the facilitation of a review of the financial, legal, and regulatory environment to promote private investment in power, among other sectors.”

“I’ll promote the incentivisation, with tax breaks, a consortium of private sector institutions to establish an Infrastructure Debt Fund (IDF) to primarily mobilise domestic and international private resources for the financing and delivery of large infrastructure projects across all the sectors of the economy,” Atiku said on Twitter.

Most of the experts who spoke with BusinessDay said most politicians need to look beyond scoring political points by having a firm understanding of the challenges facing Nigeria’s power sector. This, they said, would prepare them sufficiently for the task ahead.

“Obi and other leading candidates have not properly addressed the issues or can claim to have a firm understanding of how best to get around it,” Chinedu Onyegbula, an energy sector expert and director at Bullox Resources Limited, said.

Collins Obi, an energy specialist with a Lagos-based multinational, said the energy challenges facing Nigeria are complex and multi-dimensional and cannot be solved in a fragmented or piecemeal way but in a holistic and system-level manner.

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“Just like the Egypt’s model, Nigeria needs a community-based, decentralised, market-driven and people-centric manner to power services for the country to come out of the woods,” he said.
Ndubuisi Ekekwe, a Nigerian professor and the founder of First Atlantic Semiconductors & Microelectronics, commended Atiku for coming up with a solution to fix Nigeria’s power problems, although he said, “The proposal is not novel.”

“That is what has happened in most parts of Africa: credit guarantees work but are also limited once the guarantor cannot expand them,” Ekekwe said in a note.

He said politicians need to address the reasons why people see opportunities in the energy sector and yet refuse to invest. “Interestingly, we know the #1 reason: a court now determines how much producers of power can charge their customers, irrespective if that will bankrupt the sector,” he said.

Adedotun Agbemuko, a postdoctoral researcher at Energyvile, believes Nigeria’s electrical power problem is not capital. “You can raise all the capital you want; if it’s spent in the wrong place like has been done in the last 23 years, nothing changes. Grid developments have been disproportionately unbalanced,” Agbemuko said.

President Muhammadu Buhari won the 2015 presidential election with a promise to boost power supply in the country.
In the 2015 All Progressives Congress manifesto seen by BusinessDay, he said, “The APC government shall vigorously pursue the expansion of electricity generation and distribution of up to 40,000 megawatts in four to eight years.”

“We have given ourselves the target of 10,000 megawatts of distributable power. In 2016 alone, we intend to add 2,000 megawatts to the national grid,” President Buhari said while addressing the National Economic Council retreat held at the State House, Abuja on March 21, 2016.

Total power generation in the country stood at 3,920.8MW as of 6am on Monday, with a generation capacity of 7,652.6MW and transmission wheeling capacity of 8,100MW, according to the Nigerian Electricity System Operator.

“It is absolutely unacceptable that in 2022 after billions of dollars have been sunk into the power sector, we still can barely generate 3,500MW,” James Harry, coordinator of the Association of Electricity Customers Monitoring Network, said.