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Liberalisation, key to Nigeria’s power challenges

By Clara Nwachukwu
TOTAL liberalisation of Nigeria’s power sector has been identified as key to ending the nation’s seemingly intractable power challenges, as this will attract more private sector participation and investments to the sector.

The Chief Operating Officer of Shoreline Power, Mr Marc Hasenclever said this in Shagamu on Thursday, while taking journalists on a facility tour of the 16.5megawatt, MW, capacity captive power plant built by Shoreline for Lafarge Cement (WAPCO) Plc.

He argued that the mini off-the-shelf modular independent power plant, IPP, is a demonstration of how private investment can bring about a rapid solution to electricity supply issues.

He said, “With the realisation of the WAPCO project, the procurement of the first rental fleet was concluded. The rental plant and equipment are mobile and transferable from one ite to the other during the life time of the equipment.”

Mr Hasenclever noted that regulation and monopoly of the power sector in the country has frustrated new investments as banks and other financial institutions are reluctant to grant facilities to develop power infrastructures for fear of losing their funds.

He said,”The issue of payment is a big problem in distribution. If you don’t control the money, the projects are not bankable. We were able to make a success of this (Lafarge IPP) because it was built for a captive customer – to generate, transmit and distribute electricity for Lafarge.”

He added that with the Lafarge mini IPP, the power purchase agreement, PPA, which has remained a big issue in power investment is eliminated as every transaction is between the cement company and Shoreline under a PPA of about N10 per kilowatt hour on a take-and- pay basis. This, he said, is the challenge facing the 100MW Agbara Power Plant, which progress has been stalled for years for shortage of funds resulting from inability of Shoreline and PHCN to agree on the terms of power purchase.

The Shoreline boss argued that once the various units of the Power Holding Company of Nigeria are privatised – generation, transmission and distribution, not only will there be more captive power plants, which he said are the best for industries and residential areas, but there will also be huge investments in the power sector.


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