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CHALLENGES 2005-2006: An Assured Power Supply a Distant Dream in Nigeria

Toye Olori

LAGOS, Dec 19 2005 (IPS) - At the end of a year that was meant to solve Nigeria’s chronic electricity problems, an assured power supply is still a distant dream in this oil-rich nation.

The highly inefficient power utility National Electric Power Authority (NEPA) was broken down into the Power Holding Company Nigeria Ltd. (PHCN) in April this year. A total of 18 new companies were created for the generation and distribution; and to ensure effective, efficient and stable power.

But the changes have only been cosmetic. Blackouts are widespread across the country’s biggest city here, and the capital, Abuja. And consumers are plagued with inflated bills, which in local parlance are called “crazy bills”. In fact, according to most consumers, things have only got worse.

Corruption is rampant in the new electricity companies – six generating companies, 11 distributors and one transmitting – and little is being done to check it. Some technical staff have even been caught taking bribes from defaulting consumers for turning a blind eye.

However, top officials of the PHCN claim the power reforms have been successful. They say that revenue generation has gone up by 133 percent between 2003 and 2005.

“Nigerians should judge PHCN on the basis of the revenue index, rather than performance or service delivery,” says Joseph Makoju, managing director of PHCN. According to figures released by the organisation, the monthly revenue generation has grown from an average of about 25 million dollars in 2003 to the current 58 million dollars in October 2005.

But critics argue that the only way of looking at the increase in revenue is to match the revenue with a corresponding leap in service orientation and power supply.

“In Iju-Ishaga (a Lagos suburb), where I live, in the last 12 weeks, electricity supply has been a rarity. Daily supply averages three to four hours at the most,” says Sanya Oni, a newspaper columnist. “The bills, however, keep coming,” Oni adds. “These have spiraled, despite the many hours of darkness.”

The story is the same everywhere. Those who can afford to rely on generator sets to keep businesses and establishments running in the West African country.

“If Power Holding Company gives uninterrupted power for two days, then you are lucky. Power failure under PHCN is more than what it used to be under NEPA. Now it is total darkness. This is affecting everybody’s business,” says Mama Bisi, a shop owner at Onike, another Lagos suburb.

An informal market survey by IPS showed that portable generators, that are everywhere in the poor rural settlements, sell for between 830 dollars and 1,000 dollars depending on the capacity. Medium-sized establishments rely on industrial generators which could cost anything from 7,874 dollars to 23,622 dollars.

Trying to get around the acute power shortage, some state governments have resorted to establishing Independent Power Production (IPP) companies to boost electricity production. For instance, the Lagos State government in 1999 set up an IPP project that is presently producing 40 MW. Between 1999 and 2000, the Rivers State government in the Niger Delta region started the Omoku Power Station as part of the IPP Gas to Power project of the state.

The project which uses gas from the nearby AGIP oil well (where gas is still being flared) is expected to generate 400 MW. When completed, it is expected to satisfy the power drought in the entire state, according to Magnus Abbe.

Abbe, who is the Rivers State Commissioner for Information, told IPS in Port Harcourt during a recent tour of projects by members of the Nigerian Guild of Editors: ”The power generated at the Omoku power station would be added to the national grid of the PHCN, which will collect rates from consumers and pay a certain percentage of the amount to the state government under an agreement between the PHCN and the State Government”.

Trans Amadi Power Station, a similar project built by the state government in 2002 is already supplying electricity through the PHCN to the Trans Amadi Industrial Estate in Port Harcourt, the state capital.

Encouraged by the ”gas-to power” electricity project of the Rivers State, the Nigerian government is planning to construct seven such power stations at a cost of 2.5 billion dollars in the other Niger Delta states. The Niger Delta comprises nine oil-producing states and part of Ondo state in western Nigeria.

President Olusegun Obasanjo announced that the plants are part of the government’s strategy to raise the country’s electricity generation capacity from the current low of 3,400 MW to 10,000 MW by 2007. Nigeria’s hydro and thermal power generating stations have an installed capacity of 5,237.6 MW, but due to lack of maintenance and corruption, twin ills of most public service utilities, they are operating below their installed capacity.

“The private sector has a pivotal role to play in meeting the power requirement for the development of the country. A suitable framework is required to be put in place to facilitate the private sector involvement in this highly capital intensive power and gas sector,” the former military general who heads the government, told a business forum in Abuja, late November.

The president also thanked the World Bank for the great interest and commitment it has shown in the gas-to-power project, especially for providing the necessary transparency checks on the processes of the project.

According to a new power generation expansion plan programme released early this month and made available to IPS, electricity generation by PHCN is projected to hit 15,853 MW by 2010.

PHCN, according to the document, plans to achieve the new generation output by building up its capacity steadily over the next five years, through the total resuscitation of all existing power stations, and contributions from Independent Power Producers (IPPs).

”We hope to achieve this based on a strong conviction that all our plants, currently undergoing repairs, will be brought on stream by 2010. We are also very confident that by then, all the IPPs, ongoing Federal Government power projects, the proposed Niger Delta power stations and the proposed Joint Venture Independent Power Projects (JVIPPs) with oil and gas firms and other IPPs will come on stream,” one official said.

The existing power stations and their installed capacities are: Egbin Thermal Station, Lagos (1,320 MW); Afam Thermal, Rivers State (969 MW); Sapele Thermal, Delta State (1,020 MW); Ijora Thermal plant, Lagos (40 MW); Kainji Hydro Station, Niger State (760 MW); Jebba Hydro Station, Niger State (578.4 MW) and Shiroro Hydro, Niger State (600 MW).

Existing IPPs, according to the projections, are expected to contribute 750 MW by 2010 while the proposed JVIPPs and other IPPs are expected to generate 2,790 MW and 1,365 MW respectively into the national grid.

As a new year arrives, officials are optimistic of changing forever the bleak electricity situation in Nigeria.

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