The Transmission Company of Nigeria (TCN) plans to spend additional N1.36trillion within the next four years as capital funding to upgrade Nigeria’s electricity transmission network, the Nigerian Electricity Regulatory Commission (NERC) has disclosed.
NERC said it approved N1.36trillion as capital expenditure for the years 2016 to 2020, and N287 billion for its operational expenses for TCN within the same period.
It said the approval was part of the company’s projection in the Multi Year Tariff Order (MYTO) 2015.
The regulatory agency explained that this will aide in its upgrade plan for the network from 5,500 megawatts (MW) in 2016 to over 11,000MW in 2020 and on a continuous basis.
The acting chairman of NERC, Dr. Anthony Akah disclosed this in the presentation he made to sector operators at the recent meeting of the National Council on Power (NACOP) in Kaduna.
According to him, the TCN was facing a severe funding challenge and needed a cost reflective tariff in the MYTO to enable it execute transmission projects it has planned to upgrade the network.
Akah said NERC recognised the imperative for huge investment in Nigeria’s transmission network, hence, its approval of the capital expenditure for TCN in the MYTO.
NERC however insisted that TCN must revise its capital expenditure programmes in order of priority to the country’s power sector, adding that it needs to consult with its various customers on expected service improvements it wants to attain.
The commission also said that an anticipated arrangement of promissory note was currently being discussed with the Nigerian Bulk Electricity Trading Plc (NBET) and the electricity distribution companies (Discos) to ensure 100 per cent payment of TCN’s invoices by the Discos. This it said will boost remittances to the company.
“Recognising the imperatives for significant investment to improve TCN’s transmission capabilities to deliver projected incremental to stable power supply to the NESI, NERC approved additional Capex of N1.36 trillion for the years 2016-2020 in TCN’s MYTO 2015 tariff order.
“Likewise, Opex of N287 billion was approved for the tariff years 2016-2020. Incremental growth in TCN’s transmission capacity is expected to improve from 5500MW in 2016 to over 11000MW wheeling capacity on a continuous basis,” said Akah in the presentation.
He said the TCN was currently challenged by poor funding from poor revenue remittances by the Discos. He also said the TCN’s inability to exert necessary grid and market discipline in the electricity sector would impact on the predictability of incremental and stable power supply.