Following the significant decline in power supply witnessed across the country in the last couple of days and the untold hardship it has brought upon Nigerians, the Federal Government, yesterday, said, “Nigerians should take heart, help is on the way.”
Speaking at the Worldstage National Electricity Power Conference, in Lagos, Minister of Power, Professor Chinedu Nebo, said the Federal Government is aware of the challenges confronting the sector and is working assiduously to address the problems.
This is coming on the heels of a worsening power situation, with power supply dropping to as low as 2,000 mega watts in the last couple of days. This has led to rationing of electricity as a number of households in the country are grappling with about six hours of electricity daily.
Nebo, who was represented by his Special Adviser on Investment, Finance and Human Resources, Mr. Olajuwon Olaleye, said the Federal Government is aware that the power sector is the hub of development, and it is ensuring that all hands are on deck to bring progress to the sector.
Explaining why the Transitional Electricity Market has not kicked off, Nebo stated that the Federal Government is currently putting finishing touches to ensure that the power companies are seen to be operating in an effective manner.
He further stated that they are at the second stream of the shadow trading phase, which is designed to mirror and test run all the segments of the power sector, making sure that everything is in place before the kickoff of the TEM.
He maintained that the transmission section of the power sector needs a total investment of $7.7 billion over the next couple of years for the maintenance of the transmission grid, while the distribution and generation sections needs an investment of $5 billion annually to drive growth in the power sector, making possible for the country to attain all the targets for the sector.
The investment is important, because as the generating capacity of the country is being upgraded in the next couple of months, the wheeling capacity of the transmission facility also needs to be upgraded to be able to deliver power to every nooks and crannies of the country.
Also speaking, Mr. Aderemi Bello, President, Lagos Chamber of Commerce and Industry, LCCI, bemoaned the epileptic power situation in the country, saying that, “the sector is critical to Nigeria’s economic development and all hands should be on deck to ensure it is fixed.”
He further stated that there are concerns that the successor companies did not conduct due diligence before buying into the power companies, in addition to the funding challenges confronting the companies.
According to him, the Nigerian financial system cannot support the funding structure of the power sector due to the long term gestation period for the power projects, high interest rates and legacy debts.
He further expressed concern that the top management of the successor companies has little experience on how the sector is run, while there is no proper framework to ensure a meaningful level of local content.
He disclosed that investors in the power sector are grappling with a lot of challenges beyond their control, noting however, that efforts should be made to tackle the challenges, as this will ensure that the sector is fixed and also make the country competitive.
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