Nigerians scoring the power sector below average, some would say is being very generous in view of the prevalent crisis in the nation’s power sector, which has gone on for decades, unabated. But with the sale of the unbundled power companies from PHCN, to private investors, KUNLE KALEJAYE, writes that there is hope for better days ahead.
There were mixed feelings by Nigerians in describing the power sector 53 years after independence. For some, the sector has gone through an unforgettable process, while others believe that privatisation is the long awaited answer for the sector.
The Chairman, Electric Power Foundation, Mr. Otis Anyaeji, speaking, recalled that the total installed capacity in 1972 was 523.6 megawatts. By 1990, this had increased to 6,000MW.
Anyaeji, who spoke at the WorldStage National Power Conference in Lagos, noted that things went awry for the sector as successive administrations neglected power infrastructure, thereby resulting into a state of dilapidation.
By 1999, Anyaeji stated that electric power production fell to 1,975MW down from about 6,000MW in 1990, as a result of neglect of the sector. “That was the era of constant load shedding/blackouts, stagnated industrial growth, extermination of small businesses (apart from buying and selling), discouragement of foreign investment and low capital inflow.
“The position of the power sector as the starting point and driving force for any meaningful development of any economy cannot be over-emphasized. The extent of achievement of Nigeria’s declared goal of being among the top 20 economies in the world (in year 2020) must be measured by the quantum of electricity production in Nigeria, and the extent of its consumption/application.
Industry analysts also recalled that to integrate electricity power development and make it effective, the then-colonial government in 1950, passed the Electricity Corporation of Nigeria, ECN Ordinance No. 15 of 1950. With this ordinance in place, the electricity department and all those undertakings which were controlled came under one body.
The ECN and the Niger Dam Authority (NDA), were merged to become the National Electric Power Authority (NEPA), with effect from the 1st April 1972, but he noted that the actual merger did not take place until 6th January 1973, when the first General Manager was appointed.
The statutory function of the Authority was to develop and maintain an efficient co-ordinate and economical system of electricity supply throughout the Federation.
For several years, despite consistent cash investments by the federal government, power outages became the standard for Nigerians. Because this is absolutely abnormal NEPA was re-christened, “Never Expect Power Always.”
EPSR Act enacted
The persistent power failure and systems collapse, forced the federal government to take radical action by enacting the 2005 Electric Power Sector Reform Act (EPSR Act), which called for the unbundling the national power utility company into a series of 18 successor companies: six generation companies (GENCOs), 11 distribution companies (DISCOs), covering all 36 Nigerian states, and a national power transmission company.
The Act stipulates that ownership of these companies be granted to the Bureau of Public Enterprises, BPE, (the privatisation arm of the federal government) and the Ministry of Finance Incorporated. The unbundling paved the way for an ambitious privatisation programme carried out by the BPE.
In 2007, BPE hired CPCS Transcom Limited, an international consulting firm based in Ottawa, Ontario, Canada, to provide advice on the best ways to move forward with the privatisation programme for 11 DISCOs and the 6 GENCOs.
Advent of NIPP
Speaking further, Anyaeji underscored the importance of exploiting all the available energy sources in Nigeria for adequate production of electricity. He also noted that improvement in associated power infrastructure (for electricity transmission and distribution) is imperative in the sector.