Energy and Power
Lagos Ready to Regulate Electricity Market – Commissioner
Lagos State Commissioner for Energy, Engr. Olalere Odusote, on Wednesday said the state government was in the process of enacting a law to regulate the electricity market in the state.
Odusote said this while delivering a keynote address at the closing of the 3rd Lagos Real Estate Market Place Conference And Exhibition in Lagos.
The Conference was tagged: “A Town Hall Meeting On The Lagos Real Estate Emerging Markets – Mitigating The Potential Risks.
”He explained that this became necessary as most private individuals and businesses in Lagos utilised diesel powered generators rather than electricity from the national grid.
According to him, the two distribution companies in Lagos State – Eko Disco and Ikeja Electric – established nine years ago, sell about 800 to 900 megawatts initially and have only improved to 800 to 1,000 megawatts nine years after.
“Nothing has changed in the national grid sector nine years after.
“However, Lagos State within a spate of nine years had grown from having about 8,000 megawatts of installed diesel capacity to about 23,000 megawatts.
“The diesel market of the off-grid market has grown by about 300 per cent but the grid market has not grown at all or just about one to two per cent,” he said.
He added that the state injected almost 1,000 transformers into the grid to improve electricity supply to its residents, but without the desired result.
Odusote said a lot of the energy utilised in Lagos came from diesel generators, and that because of the high population of the city, the emission from that energy source had become unsustainable.
The Commissioner explained that Lagos had been projected to the city with the largest population in the world in 50 years, therefore energy for the housing infrastructure needed for the population must be put into consideration.
Odusote said that was why the state government came up with the Lagos Electricity sector policy, with the aim of providing universal access to electricity for all residents of the state.
He stated that the draft of the Lagos electricity law had been completed and was before the state’s House of Assembly for consideration.
Odusote explained that the bill, when implemented, would take regulation of electricity from the centre and domicile it with the Lagos regulatory agency.
“The Nigerian constitution domiciles the responsibility of regulation and distribution of electricity with the state government but when the law was passed in 2002, many states were not ready for the responsibility.
“Many housing estates in the state run on diesel generators because they are unable to benefit from the grid, yet they cannot share from the excess capacity they currently have because the Federal Government does not permit it.
“Lagos is now ready, willing and in the process of passing the law. It means we will be able to locally determine our faith when it comes to electricity,” he said.
According to him, the Lagos Regulatory Agency will work with the residents and the state government to determine the need of the electricity market and make laws that will enable investors to invest in identified gaps.
The commissioner said the state was working with the Federal Government to ensure its laws were reviewed and the new law passed at the National Assembly aligned with the state’s law and in line with the development of the sector.
Odusote explained that the state was working with the built environment and other private sector operators to create a framework that would ensure that by 2036, everybody that wanted electricity in Lagos got it.
In her address, the Special Adviser to Gov. Babjide Sanwo-Olu of Lagos state, Mrs Toke Benson-Awoyinka, said the state government was determined to ensure sanity was restored to its real estate environment.
Benson-Awoyinka said the state government planned to achieve this with the review of the Lagos State Real Estate Regulatory Authority (LASRERA) law.
She noted that if regulations and policies of the state government were not effectively regulated, the sector would continue to record loss of money and investment opportunities.
“Laws such as LASRERA law, Mortgage Insurance Policy and Land Matter law guarantee, safeguard and protect those people involved in business transactions in case of disasters in construction projects, acquisition or sale, rental on residential or commercial purposes,” she said. (NAN)
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.
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.
.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)
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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