According to reports, these power sale transactions have been underway since the launch of the ‘Light Up Nigeria’ initiative, spearheaded by Vice President Shettima.
The distribution companies (Discos) involved in the deal encompass Eko Electricity Distribution Plc, Compagnie d’Energie Electrique du Togo, Sunflag Steel Industries Limited in Lagos, Wewood Limited in Omotosho, Ondo State, APLE Electric Limited, Pulkit Alloy & Steel Limited in Lagos, among others.
The NDPHC outlined that the primary objective of the ‘Light Up Nigeria’ program is to utilize the current available capacity while also expanding power generation. Notably, all these power generation projects were financed through the Excess Crude Account, duly appropriated by the Federal Government and the States between 2005 and 2009.
Currently boasting an installed capacity of 4000MW, NDPHC emphasized that operational challenges have significantly impacted its cash flow despite its achievements.
The NDPHC highlighted transmission constraints, limitations in gas supply, and transportation challenges that impede generating power up to the Transmission Company of Nigeria’s (TCN) allocated evacuation capacity of 975MW, let alone achieving the full potential of its power plants.
NDPHC revealed that only the Calabar plant enjoys a full gas supply of the ten power plants under its purview. The western axis plants necessitate approximately 150MMSCF/day to meet the TCN-allocated evacuation capacity of 535MW during peak times. However, gas supply to these western axis plants faces additional hurdles due to low pressure on NGIC gas pipelines –ELPS & Oben-Ajaokuta, further complicated by gas suppliers pushing higher gas tariffs beyond the industry-approved rate ($2.50 vs. $2.18).
Previous reports detailed how the company’s operations were hampered by a substantial debt of approximately N190bn, primarily owed by government agencies.
In response to these challenges, NDPHC stressed the need for increased investments. It expressed that “it is evident that significant investment is necessary for transmission, and the government alone cannot meet this demand,” advocating for the urgent mobilization of private capital to address these issues.
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