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Power improves by 24 percent in June

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*Drops in July as Afam VI, Shiroro, Jebba, five others face serious challenges

By Sebastine Obasi

POWER situation in the country saw a 24 percent improvement in June  cumulatively, 69,800 megawatts, MW, were sent out as against 53,339MW sent out in May, daily operational report of the Nigerian Electricity System Operation obtained by Vanguard shows.


Gas and water constraints were still recorded within the period under review.

Though the month of June recorded a much higher frequency constraint of about 13,275MW, as against 2,443MW recorded in May, the improvement in June could be attributed to non recorded system collapse of the various power stations.

Also, there were high frequency challenges resulting in generation reductions at Afam Power Plant V1, Ibom Power Plant, Geregu National Integrated Power Project, NIPP and Alaoji NIPP. But the situation has worsened in July, this year as a result of many challenges in the sector.

The report of the Advisory Power Team, made available to Vanguard stated: “On July 8 2017, average power sent out was 3,351 MWh/hour (down by 128 MWh/h).

Water management constraint

“The reported gas constraint was 644MW. The reported line constraint was 69.8MW. The reported frequency management constraint due to loss of DisCo feeders was 1939MW.  The water management constraint was 0MW. The power sector lost an estimated N1, 273,000,000 on July 8 2017 due to constraints.

“High frequency due to loss of DisCo feeders remains a significant constraint to generation in Afam VI,Shiroro, Jebba, Odukpani, Geregu I, Omotosho I, Olorunsogo II, and Transcorp Ughelli. Increased line constraints at Ibom.”

However, Nigeria’s power sector may be in for hard times as both foreign and local investors are no longer willing to do business in it, Vanguard has learnt.

According to the Power Sector Recovery Programme, PSRP, which was initiated by the Federal Government and the World Bank, the sector appears to have lost its appeals to investors, both foreign and local, such that many of its sources of funding projects are no longer available.

Consequently, the sector is left with just two dependable funding windows, which are the Central Bank of Nigeria (CBN) and the World Bank.

“From being an investment destination sought after in 2013 – both at home and abroad, the NESI (Nigeria Electricity Supply Industry) has fallen out of favour,” a document of the PSRP sighted by Vanguard stated.According to the document, “With the recent meetings in Abuja of the DFI/MDBs (Development Finance Institutions and Multilateral Development Banks) over issues concerning the currency redenomination of the Put-Call Option Agreement (PCOA), there now remains only two dependable sources of financing for the NESI: NGN – the Central Bank of Nigeria (CBN); USD – the World Bank Group (WBG).”

Regretting that the power sector may have lost the type of investment attraction it had experienced from financiers, the PSRP explained that there was an urgent need to revive its fortunes.

“A bold turnaround plan is now required to utilise current assets and resources optimally, and to restore investor confidence in the sector, required to deliver the planned sector reforms,” it stated.

The document noted that there are several proposals made to get the sector out from the woods, some of which are the government’s reactivation of the privatisation of some key power plants built under the National Integrated Power Projects (NIPPs), as well as other key policy measures which the government must initiate.

Nigeria has been seeking ways to invest $20billion yearly in the sector over the next five years to generate 20,000 megawatts (Mw) of electricity to boost power supply.

However, sources said foreign investors have rejected the invitation of the Federal Government to invest in the power sector because of its low prospects.

It was gathered that the investors, mainly from United States, China, Korea, United Kingdom, Germany and other European countries, are seeing Nigeria as an investment risk nation.

According to a source, “The prospects of recouping money spent on investment in the power industry is increasingly dimmed by factors such as pipeline vandalism, inability of the power generation companies (GenCos) to access gas for production, poor supply and collections rates.’’


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