Nigeria’s $8 Billion Good Intentions to Close Power Gap - Again

Researched by Industrial Info Resources (Sugar Land, Texas). Over the past ten years, a strong sense of déjà vu has grown with every statement made by the government and power authorities in Nigeria on new initiatives to build the country’s power generation capacity. With a population of 140 million the country has an official power generation capacity of only 4,500 MW, which is a paltry ratio when compared with most other developing countries. The amount of power capacity supplied by thousands of dedicated backyard generators has not been quantified, but in a scenario of power cuts and drastic under supply it is these units, chugging a heavy haze into the air, which all too often keep businesses and homes going.

In mid July, the special adviser to the president on electrical power, Joseph Makoju, said that the country needed to generate 104,000 MW to achieve an equivalent of 800 watts per head of population. At the second Nigeria Economic Summit on the Development of Infrastructure in Nigeria he said that 18 companies had emerged from the unbundling of the state power utility NEPA (now titled Power Holding Company of Nigeria - PHCN) and that the Nigerian Electricity Regulatory Commission (NERC) has issued the first batch of power generation licenses to private developers (IPPs). NERC had finalized the grid code and market rules for electricity companies, he said.

Between 1999 and 2007 $6.3 billion was invested on electricity with $4.2 billion on National Integrated Power projects (NIPP) and $2.2 billion was swallowed by ‘other’ government projects, said Makoju.

At the hopefully named National Sensitization and Customer Awareness Campaign function in Lagos, previous to Makoju’s statements, the chairman of NERC, Dr Ransome Owen, said that it would take another three to four years to stabilize the sector and that the ‘electricity problem’ would be a thing of the past by the time an additional generation capacity of 8,000 MW was achieved. About $8 billion was expected to be invested by IPPs in providing the 8,000MW boost.

Lack of maintenance and replacement of damaged equipment had led to a wide gap between demand and supply, the PHCN reported. Generation went down from an installed capacity of about 5,200 MW to 1,750 MW compared to a load demand of 6,000 MW. At the same time, only 19 out of the 79 installed generating units were in operation.

Currently, over 3,000 MW of power capacity is reported to be under construction or waiting for connection to the national grid. Another 6,800 MW of specific projects are planned by the PHCN and IPPs. PHCN has also been improving transmission capacity and sub station operations. Perhaps a cautious ‘we shall see ‘could replace déjà vu? For related news item see January 3, 2007 – Nigeria’s Ambitious Power Target – 5,000MW Added by May and 10,000 MW Total by End 2007.

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