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FEC Approves Multi-million Naira Power Projects in Daura, others

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By Mathew Dadiya, Abuja

The Federal Executive Council (FEC), Wednesday, approved multi -billion naira contracts to boost power supply in Daura President Muhammadu Buhari’s hometown in Katsina State, Yobe state and other parts of the country.

The Minister of Power, Engineer Abubakar Aliyu, announced this while briefing State House correspondents after the cabinet meeting chaired by President Buhari at the Presidential Villa, Abuja.

Aliyu said: “Council approved award of contract for the engineering procurement, construction and financing on the implementation of 330 KV and 132 kV line transmission lines and 33 KV, 11 KV and 400 PE distribution line project under phase 1 of the presidential power initiatives in favour of two contractors in the sum total of $581,629,355.

93, inclusive of 7.5%, at the prevailing exchange rate with period of completion 36 months as indicated. “The recipient companies for lot one, from DL from Benin and Enugu DISCOS, Messes SLD electric. Then, Lot DM 3 Abuja, Jos, Kano, Kaduna DISCOS, Messes China civil engineering construction cooperation totaling distance of around 13,000 kilometers for the two LOT and it has been graciously approved by council.”

The minister also explained, that “Council approved the award of contract for the construction of 750 kilowatt solar PV power plant at the headquarters of the where TCN is also situated in favor of Proserv Energy Services Limited in the sum of N1.6 billion inclusive of 7.5% VAT with completion period of six months.”

He said “Council also approved a routine maintenance for the Transmission Company of Nigeria. The council approved contract for the upgrading of the substation in Potiskum town in Yobe State with 132 power transformer. It is an existing substation, which has been there for a very long time with only one transformer and it serves a lot of areas around Potiskum, it is the largest town in the State with a very huge population and is the hub for commerce and transportation. So, with this upgrade, Potiskum will become a hub for electricity transmission and distribution.

“The other component of it is the line bringing additional line from Damaturu. Before now, the line is coming from Gombe, which is over 200 kilometers. It is a 132 single line coming into Potiskum to power the substation. So, having now 330 substitution in Damaturu, that makes it easier and more prudent to take electricity from from Damaturu to Potiskum over a distance of 120 kilometers. Because the longer you take the electricity on a 132 line, you get low quality of electricity. 

“So, with the 132 from Gombe single line and now this proposed one coming from Damaturu to Potiskum, you will have double circuit and with additional transformer of 132 cable, that is one by 60 MB. The second one on that memo is construction of two by 60 MBA and 132 line a transmission substation at Sapade in Ogun state and in favor of Messes VNK international technologists at the total cost of a foreign component $10.2 million and local component of N3.3 billion naira. The third one is the supply and installation of 33 KV substation equipment at Emirate Katsina state, in favor of eases Power Deal Construction limited in the sum of N4 billion.”

Meanwhile, the Minister of Women Affairs, Pauline Tallen, said FEC approved Women Economic Empowerment (WEE) policy to help get women into the mainstream of financial plans and to ensure that they were carried along in nation building.

Also, the Attorney General of the Federation and Minister of Justice, Abubakar Malami, said the cabinet also approved the regularization of the Public Private Partnership arrangement between the Federal Ministry of Justice and Lexis of South Africa for the publication of the laws of the Federation of Nigeria.

Malami said that the judgement for P&ID case in UK would be delivered any moment from now.

He said the contract was reviewed to accommodate technological development and as well as application and operation of the ICRC Act as it relates to public private partnership. 

Malami said council also approved the operationalization and deployment of federal government contracts administration system.

He said it is a digitalized arrangement to ensure that the interest of the federal government was not compromised in the art of drafting contracts.

The minister added that council approved the renewal of the implementation of public private partnership arrangement between the Federal Ministry of Justice and Messsrs Jeffreps Integrated Services Limited for the publishing and marketing of the Court of Appeal specialized law reports. 

“But this time around we are taking into consideration the new innovations with particular reference the public private partnership arrangement which has not been the tradition before. And then the ICRC Act, which has not been in existence, and new innovation associated with technology, to have them accommodated in the contract going forward.

“Law reform is a compendium of the judgments of the Court of Appeal over time,” the Minister stated.

Business News

Edun Seeks Liquidity for Power Sector as NDPHC Declares Calabar Best Power Plant

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By Eze Okechukwu, Abuja

The Minister of Finance and Coordinating Minister for the Economy, Wale Edun yesterday declared that liquidity was the major hindrance required by the troubled power sector to achieve the desired result of producing steady Power in Nigeria.

This is as the Managing Director of Niger Delta Power Holding Company (NDPHC) Chiedu Ugbo informed the Senate Committee on Power in Abuja yesterday that the Calabar Power Generation Company under its ownership was the best performing power plant in the country.

In his submission to the Committee investigating the controversial Make up Gas (MUG) Reprocessing Deal Involving the Ministry of Finance, NDPHC, Calabar Generation Company Limited and ACUGAS Limited, the Minister of Finance pointed out that the need for liquidity into the Power Sector remained the key to unlocking it.

The Minister who made the submission through his Special Assistant, Mallam Dahiru Moyi said the agreements on Gas supply between NPDHC and ACUGAS Limited was inherited by former President Muhammadu Buhari in 2015, following after the agreement was signed in 2011 during President Goodluck Jonathan’s administration.

According to him, “just as the Ministry of Justice was not aware of the contract agreement, the Ministry of Finance was also not part of it from the beginning but since government is a continuum, the Ministry of Finance later came into it for the purpose of facilitating the required liquidity.

“The issues on ground about contracts agreements being investigated by the Senate Committee on Power is not about restructuring but providing the required liquidity which the Ministry of Finance is doing through collaboration with the Nigerian Liquified Natural Gas (NLNG).

 “Since NLNG pays Gas in Dollars, the Ministry is collaborating with it for a practical solution of bringing liquidity into the age long contract agreement through Deed of Transfer.

“Make Up Gas (MUG) belongs to Calabar, Calabar belongs to NDPHC and NDPHC belongs to Federal and State governments with the Federal Government having 52.68%”, he said.

In his own submission before the Committee, the Managing Director of NDPHC, Chiedu Ugbo said the company as a result of the Gas supply agreement with ACUGAS Limited was taking Gas from three out of five units and generating power from Calabar plant to the National Grid which according to him was the best power plant in the entire country.

He said NDPHC went out of its way to construct an 80 kilometres gas pipeline for utilization of MUG in Calabar and Alaoji power plants.

He however lamented that problems relating to systemic transition, frequency and voltage issues have not made the firm achieve the desired results.

In his remarks, the Chairman of the Committee, Senator Enyinnaya Abaribe (APGA, Abia South) thanked the stakeholders for giving the Committee clarity on the issue but added that it was still an ongoing investigation.

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Energy and Power

Oil, Electricity Workers’ Unions Mobilise for Planned Strike

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The Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) has directed its members to comply with the directive of the two labour centres to begin an indefinite nationwide strike on Monday.

Its General Secretary, Mr Afolabi Olawale, in a statement on Saturday, said the union was committed to ensuring total compliance with the directive.

Recall that the Nigeria Labour Congress (NLC) and Trade Union Congress of Nigeria (TUC) declared an indefinite nationwide strike to begin on Monday, to express their grievances over the proposed new minimum wage.

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In a joint statement signed by NLC President, Mr Joe Ajaero and TUC President, Mr Festus Osifo, the centres declared the strike over the tripartite committee’s inability to agree on a new minimum wage and the hike in electricity tariff.

Afolabi said the union was concerned and disturbed with the insensitive attitude of the federal government “to the very critical issue of negotiating a new minimum wage for Nigerian workers”.

“This is in view of the various socio- economic policies of this administration that have impoverished the working people of this country.

“Leaders of our great union at all levels, from the units, zones and branches, should immediately put all processes in place to ensure total compliance with this directive.”

Also, the National Union of Electricity Employees (NUEE) said it was mobilising its members to embark on the strike following the directive of NLC and TUC.

The Acting. General Secretary, Mr Dominic Igwebike, gave the directive to the members in a statement.

Igwebike said that along with the reasons of inconclusive negotiations on the minimum wage and electricity tariff hike, apartheid categorisation of Nigeria electricity consumers into bands was another, to embark on the strike.

“Given the above, all national, state, and chapter executives are requested to start the mobilisation of our members in total compliance with this directive to ensure the government does the right thing as stated above.

“The withdrawal of services becomes effective on Sunday 2nd June by 12.00 midnight, “ the union leader said. (NAN)

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Business News

FG Secures $500m World Bank Loan to Boost Electricity Distribution

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By Tony Obiechina, Abuja 

In a strategic move to address the identified gaps in the Electricity Distribution Companies (DisCos), the Federal Government has secured a $500 million loan from the World Bank.

In a statement by Head of Public Communications, Bureau of Public Enterprises ((BPE) Amina Tukur Othman on Thursday, approval for the facility was given by World Bank Board of Directors on February 4, 2021.

According to the statement, “this funding supports the Nigerian Distribution Sector 

Recovery Program (DISREP) aimed at improving the financial and technical 

performance of the DisCos”.

The Distribution Sector Recovery Program is designed to enhance the 

financial and technical operations of the DisCos through capital investment and 

the financing of key components of their Performance Improvement Plans (PIPs), 

which have been approved by the Nigerian Electricity Regulatory Commission 

(NERC).

 

Key areas of improvement include:

• Bulk procurement of customer/retail meters and meter data 

management systems.

• Implementation of a Data Aggregation Platform (DAP).

• Strengthening governance and transparency within the DisCos.

• Program Components

• The DISREP comprises two main components:

• Program for Results (PforR):

• Allocation: $345 million

• Purpose: Support the implementation of selected PIP components.

Others include 

• Implementation: Bureau of Public Enterprises (BPE)

• Investment Project Financing (IPF):

• Allocation: $155 million

The Purpose is to finance the procurement of meters, a Data Aggregation 

Platform, and Technical Assistance.

The DISREP loan, particularly the Investment Project Financing (IPF) component, is expected to significantly benefit the Nigerian Electricity Supply Industry (NESI) by:

• Closing the metering gap

• Reducing Aggregate Technical, Collection, and Commercial (ATC&C) 

losses

• Improving remittances and liquidity for the DisCos

• Enhancing the reliability of power supply

• Increasing transparency and accountability within the DisCos.

The $500 million DISREP loan from the World Bank offers concessional financing 

with more favorable terms than commercial bank loans. This will enable the DisCos to:

1. Invest in critical distribution infrastructure.

2. Improve ATC&C losses.

3. Increase power supply reliability.

4. Achieve financial sustainability in the power sector.

5. Enhance transparency and accountability.

The statement further explained that significant progress has been made in the preparation of the DISREP Program, with several key milestones achieved, and approval by the Federal Executive 

Council (FEC) on August 3, 2022. execution of the Financing Agreement by the 

Federal Ministry of Finance, Budget and National Planning, and the World Bank, 

adoption of the Program Operations Manual (POM) by BPE and TCN, obtained 

Legal Opinion from the Attorney-General of the Federation, Execution of the 

Subsidiary Loan Agreement, effective declaration of the DISREP Program on 

January 31, 2023, inauguration of the DISREP Technical Committee on May 6, 

2024, inclusion in the Federal Government Borrowing Plan, approved by the 

Senate Committee on May 16, 2024.

To ensure repayment assurance, the Bureau of Public Enterprises sought and 

obtained approval from the Nigerian Electricity Regulatory Commission (NERC) 

and the National Council on Privatisation (NCP) for a structured repayment 

hierarchy. 

The structure prioritizes payments including, Statutory Payments (Taxes), Repayment of CBN market loans, Market obligations , Repayment of DISREP loan and DisCos’ net revenue.

This structured repayment plan aims to mitigate risks associated with repayment 

uncertainty and defaults, with regulatory sanctions imposed for any defaults.

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