September 27, 2020
  • September 27, 2020
  • Home
  • Top News
  • Nigeria signals determination to address power shortage with Siemens intervention
electricity tariff

Nigeria signals determination to address power shortage with Siemens intervention

By on July 30, 2020 0 219 Views

By Oludare Mayowa

* Reforms necessary to revamp sector
* Discos should recapitalise
* Stop Political interference
* Government should show commitment to policy

Foreign Exchange

Nigeria on Wednesday agreed to release €18.94 million counterpart funding to Siemens the Germany energy firm, in a deal that could see the country’s power sector expansion and boost to electricity generation and transmission to 25,000 megawatts.
The funding, which was approved at the cabinets meeting has been described as a huge step toward improving the state of energy supply in the country, which has frustrated economic growth and development across the value chains.
As soon as the government announced the approval, Siemens also announced that it will start work on pre-engineering contract, that will kickstart work on Nigeria’s 25,000 megawatts expansion project.
According to the energy firm; “The pre-engineering contract forms the initial step in the Presidential Power Initiative (PPI), formerly the Nigeria Electrification Roadmap, outlined by Siemens and the Federal Government of Nigeria in July 2019.
“The PPI project aims to upgrade the electricity network to achieve the operational capacity of 25,000 megawatts (MW) from the current average of around 4,500 MW, through a series of projects spanning three phases.
Siemens said in a statement that it will begin pre-engineering works for the transmission, distribution, and meter data management systems (MDMS) infrastructure across the country, to enable the development of a functional, efficient and reliable electricity grid system. Comprehensive studies and power system analysis software for the Nigerian utilities are also included.
According to the firm, “Nigeria’s power system is suffering from an imbalance between power generation and demand. Despite more than 8,000 MW of operational power generation capacity in the country, only an average of 4,500 MW reliably reaches consumers.
“This inadequate power supply results in regular brownouts and blackouts and has restrained Nigeria’s economic development. Raising Nigeria’s operational electricity capacity to 25,000 MW will power various industries and businesses, as well as significantly improve access and reliability of power supply to the Nigerian people.
“This project will also facilitate the creation of thousands of jobs while generating new opportunities for small and medium enterprises (SMEs) across the country. This will in turn increase Nigeria’s GDP and boost economic productivity.”
Attempt to address the issue of capacity in the time past was frustrated by bureaucracy and political intervention, resulting in the stunted growth of the sector and the eventual transmission of same to the entire economy.
The privatisation of the sector itself by the last administration of President Goodluck Jonathan was marred by politics and preferential sales and allocations of the assets of the generations and distributions companies to political stooges who do not possess the financial capability to run the companies.
Beyond building capacity and increase generation, the government must focus attention on how to ensure that those who purchased the distribution companies are made to fulfill all the terms of the purchase and perform optimally to ensure that Nigerians derive the maximum benefits from the huge investment in the sector.
Currently, the distribution firms are performing sub-optimally due to lack of capacity both in terms of technical know-how and financials to enable them fix the derelicts equipment inherited from the legacy organisation that transited from the government to the private sector.
Consumers are still being forced to buy their own meters, cable, poles and transformers to enable them get power supply that is more erratic, while many people are daily complaining about estimated billing imposed by the disco due to their lack of proper metering system.
Without addressing such challenges, the renewed effort to revamp the power sector may end up like the previous attempt by the last administration.
For now, the nation is losing about $1 billion to the inefficiency of the system, the finance and budget minster, Zainab Shamsuna Ahmed said recently.
Though the minister believes that the PPI will help eliminate these inefficiencies and unlock economic value for the country, many still have their doubt over this assertion if necessary reforms are not carried out to change the orientations of players in the sector.
For instance, the minister of power, Sale Mamman has continued to interfere unnecessarily in the running of some of the agencies that were set up to regulate and interface with the players in the sector. in the last nine or so months, the minister has sacked the chief executives of the Transmission Company of Nigeria (TCN), NBET and other regulatory agencies under his watch without due process being followed.
Such political interference is not good for the system and could further cause instability within the sector and retard progress and development that will draw the country backward again.
The government should force all the Discos to recapitalise their operations or sell part of their holdings in the companies to new investors to enable them access to fresh capital to revamp the sector.
An improved power supply remains a major step toward achieving economic growth and improvement in the lives of Nigerians and unless the government show commitment to whatever measures being taken, Nigerians may be back on ground zero and the vision of creating great economy that works for all will become a mirage.#GFD

Leave a comment

Your email address will not be published. Required fields are marked *

Sign For NewslettersFor News Updates Around The Globe!