X-raying 10 NIPPs Under Buhari

2017_9$large_NIPPs_under_Buhari

The NIPP, under the management and supervision of the Niger Delta Power Holding Company (NDPHC), is funded by the three tiers of government. While there is one federal financier, the others are the 36 States + FCT and 774 local governments, The Daily Trust reports

The projects are to fast-track power generation and delivery. With this projects, the NDPHC was established, a special purpose company, tasked with the responsibility for implementation.

The projects consisting of power generation, transmission, distribution and gas infrastructures are a major key to bringing in steady and uninterrupted electricity supply.

The generation aspect had 10 gas-fired power plants, with seven situated in the Niger Delta for ease of access to gas feedstock. The $7.1 billion generation asset was to give high volume megawatts (mw) – about 5,000mw of electricity using gas-for-power, transmitted and distributed to consumers through the national grid.

On June 10, 2016, after more than a decade of not fully meeting its desired expected goal, President Muhammadu Buhari, injected a fresh management into the NDPHC. Buhari, according to sources, studied the impact the NIPP will have in Nigeria’s power supply and economic transformation; and moved in to make it work at once.

A lawyer, Mr Chiedu Ugbo was appointed to head the new management team of the NDPHC as managing director with a mandate from the president for timely delivery of the projects.

In a chat with some management officials to evaluate the productivity at the NDPHC one year after Ugbo took over leadership, the Daily Trust observed that the twin challenges of inadequate provision for gas feedstock and a corresponding delayed privatisation programme are getting solutions.

Thus the mandate for Ugbo is to: “Tackle the lack of gas supply to the gas stations, find a good solution and then kick start a transparent and result-oriented privatization process,” an official said.

The official said the Minister of Power, Works and Housing, Mr Babatunde Fashola, had charged power sector operators saying, “The simplest way to put it, is that we do not have enough power. Power cannot be steady unless it is enough. Not only must it be enough, we must create excess capacity.”

Improved gas for 10 NIPP plants

Although the NIPP scheme has succeeded in building power plants, it has not ensured that gas is adequately supplied to them. However from the interaction, Daily Trust gathered that in the first 100 days of Mr Ugbo, the new NDPHC management started to drive the original mandate of gas plants, making it functional through an improved gas-to-power value chain.

The NDPHC, along with the Federal Government, World Bank, the Nigeria Bulk Electricity Trading (NBET) and a local gas supplier, Seven Energy, signed a pact to improve the supply of gas to some of the power plants. Seven Energy is investing about $500m in the construction of gas processing facility at the Ukpo Field in Akwa Ibom State which will flow to most of the plants under the NIPP

Again, the NDPHC led by Ugbo and the World Bank finally signed an agreement for a Partial Risk Guarantee (PRG). The previous delay in securing the PRG dealt a huge blow to the privatisation process of the 10 NIPP plants as there was no backup or financial assurance for them to operate just like other Generation Companies (GenCos).

The PRG secured the supply of about 130 million cubic feet per day of gas to the NIPP’s 563mw Odukpani-Calabar plant by Seven Energy. Officials of the firm said the PRG for gas signed for Calabar was the first of its kind for gas in Nigeria.

Speaking at the occasion, the new management team leader, Chiedu Ugbo, noted that it will address liquidity challenges experienced by the gas supplier for the Calabar power plant. The gas supplier will now supply gas molecules from a completed pipeline to their field in Akwa Ibom State.

Payment for the gas now has the World Bank assurance to Seven Energy as it backs the NDPHC to make the payments. It is the first gas-to-power guarantee the bank has provided for which it is unlocking almost $700 million of investment into the gas infrastructure in Nigeria.

Restarting privatisation of 10 power stations

A huge asset like the NIPP needs capable private investors to buy them over in a transparent exercise devoid of cronyism and corresponding inefficiency. Experts have been hopeful that the present administration will go the extra mile and demonstrate transparency and due process in the privatisation exercise that was stalled since 2014, after the bids submission for the 10 gas-fired power plants.

NDPHC officials told Daily Trust that the firm has gotten approval from President Buhari to resume the privatization process. Industry operators see this development as a bright part for the electricity market which requires more robust private hands to drive efficiency.

In an interview with Daily Trust recently, Mr Ugbo said the new privatisation process would be in phases starting with three of the plants namely – 563mw Calabar; 434mw Geregu and 513mw Omotosho. It is evident that in this first year, there is a clear cut forecast and the full restoration of the original vision of the establishment of the NDPHC – to build and privatise efficient power assets.

Another milestone that improved nationwide power supply since November 21, 2016 was the commissioning of the 330 kilovolt (KV) power transmission switching station in Ikot Ekpene, Akwa Ibom State by Fashola. It now evacuates about 1,000mw electricity that was stranded earlier from Alaoji, Afam, Calabar and Ikot Abasi power stations through Ugwuaji in Enugu up to Jos, Plateau State.

More so, records from the NDPHC communication section show that the new management has deployed about 36 units of 330kV and 132kV substations for the Transmission Company of Nigeria (TCN). It has also superintended the construction of 1,635km of 330kv Double Circuit lines; 720km of 132kV Double Circuit lines; 10 new 330kV substations, seven new 132Kv substations, 6,150MVA of 330/132kv transformation capacity, 2,800MVA of 132/33kV transformation capacity. It has also provided over 25,000 complete self-protection (CSP) transformers which will retain over 30 per cent of power being lost to poor transmission network.

Improving renewable energy access

In January 2017, Mr Ugbo launched the Solar Home System (SHS) project with a target of energising 20,000 homes. The pilot community, was lit up around Gwagwalada Area Council of the Federal Capital Territory, Abuja, and commissioned by Vice President Yemi Osinbajo in January.

The 20,000 units along with 1,073 solar powered boreholes would be commissioned across communities in northern Nigeria under the first phase of the programme. “NDPHC is actively involved in the process of bringing power to rural communities, thereby stimulating social and economic activities in the rural communities located off the grid,” an official noted.

Tasks still ahead

Although a significant task has been achieved in the last one year of the present NDPHC management, there is still much to be done in seeing that the NIPPs have great impact in Nigeria’s ailing power sector. They need to get about two of the power plants completed, and close the delays on issues involving right of way for power projects across communities. However, with the feats in providing gas feedstock, approval for fresh privatization process, it is hoped that the power sector will soon get a better intervention through efficient NIPPs.

Source: IWIN

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