Energy and Power
Reps, Stakeholders Setup Committee for 2-month Free Electricity
The House of Representatives and stakeholders in the power sector on Wednesday agreed to set up a joint implementation committee on the proposed two-month free power supply to poor Nigerians as stimulus package.
The stimulus package is aimed at alleviating the effects of Coronavirus (COVID-19) pandemic in the country.
In a statement in Abuja, the Speaker of the House, Rep.
Femi Gbajabiamila, said the committee’s mandate was to work out modalities for the proposed two-month bill waiver for the most vulnerable people in the country.The lawmaker explained that the panel was also expected to identify the group of Nigerians to benefit from the free power supply.
He said that the committee would identify the number of households connected to the national grid as well as find the way forward for regular power supply to Nigerians after the COVID-19 crisis.
“We are here to find out how we will go about it. I am happy that in my previous engagements with the NNPC GMD, he was very interested.
“Whatever the issues are within the power supply chain, they have to be dealt with and set aside but how we deal with the issue at stake is why we are here today.
“This is not about technicalities or blaming any part of the power supply value chain; it is just about how we find a solution.
“The objective is very simple: we are asking people to stay at home for several days or weeks, so we need to make their stay at home comfortable. We need to help the poorest of the poorest at this time in Nigeria.
“Even if we agree that this proposal as an investment scheme according to the power sector stakeholders, I think we need to keep our eyes on the ball.
“What is that ball? Get to the end-user, who is the beneficiary of that investment scheme.
“I wouldn’t want to look at it as the DisCos or GenCos or even the Transmission Company as the beneficiaries. For me, the ultimate beneficiary is the Nigerian people.
“If that is what the investment scheme takes, to supply power, it may not be 100 per cent, but let’s say 70 or 80 per cent, then we would have succeeded.
“So, we set up a group that will look into all the possibilities and implications and come up with a solution, so that the Nigerian poor can be taken care of during this period,” he said.
The Speaker, however, expressed his disappointment over the non-existence of the Power Consumer Assistance Fund by NERC.
He said the fund would have served the purpose it was meant for, at a time such as this, if it existed.
Citing Section 83 of the Electricity Power Sector Act, Gbajabiamila said: “We have broken the law because the law mandated it; it is not optional. It is the Act that mandated its establishment.
“If that had been set up, way back, perhaps we would have had the fund with which to assist this proposal. This is the kind of time that this fund was anticipating.
“I think we should look into setting up this fund because we do not know when next this kind of issue may come up,” he said.
In his remarks, the Minister of Power, Mr Mamman Sale, said the Executive arm was ready to contribute its part to the success of the proposal.
“We will give all the support as well as technical advice toward the realisation of this objective. We are ready whenever our input is needed,” the minister said.
The Nigeria National Petroleum Cooperation (NNPC) Group Managing Director, Mr Mele Kyari, said that the issue of gas supply to the generating companies known as GenCos was critical to power supply in the country.
According to him, the proposal is workable if the issue of who is to carry the burden of cost and margins in the supply value chain is settled and agreed on by all the parties.
Kyari said that note had to be taken of the actual beneficiaries of the two-month free supply palliative.
He said not every Nigerian falls into the category of the poorest, saying that the existence of the industrial sector should be of concern at the end of the crisis period.
Kyari said that 100 per cent uninterrupted power supply was impossible because not enough was generated due to the COVID-19 crisis.
He, however, assured that gas supply would not be an issue, as 100 per cent supply was guaranteed once the debt issue was addressed.
The DisCos assured that they could deliver the mandate as soon as all the details were worked out and agreed on. (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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