U.S. Power Africa Initiative Drives Nigeria's Electricity System Prospects

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--Hopes are rising again for the future of Nigeria's Power Industry as three different developments occur at the end of July.

A memorandum of understanding (MOU) was signed between Nigeria and the U.S. on a 10,000-megawatt (MW) power plan; 248 abandoned containers of imported power equipment, which belonged to the now-defunct Power Holding Company of Nigeria (PHCN), were released; and the Transmission Company of Nigeria (TCN) reported plans to inject $8 billion into its operations to assist in achieving a target of 20,000 MW for the country.

As a result of the U.S.-backed Power Africa initiative, plans have been made to construct a $2.5 billion, 1,500-MW, gas-fired power plant. The MOU offers a framework to coordinate the implementation and support of institutional reforms, privatization and regulation of the country's power sector within the initiative.

An innovative model has been developed on transactions with private investors--and policy support to governments--to focus and enable key energy projects. It seeks to leverage the strengths of U.S. energy technology, private-sector engagement and policy, and regulatory reform to galvanize collaboration, make quick impact interventions, and drive systemic reforms to facilitate future investments in the power sector.

At the same time, the Nigerian Bulk Electricity Trading Company (NBET) has released its $350 million allocation from Nigeria's $1 billion Eurobond to the Nigerian Sovereign Investment Agency (NSIA) for management of the funding.

On the same day that the MOU was signed, the Nigerian customs service commenced the release of the 248 containers, which PHCN had abandoned for 11 years, owing to its inability to pay clearing costs and accumulated demurrage. The equipment was intended for turnkey power projects in 12 states, of which 10 have been newly identified.

The technical manpower of TCN is to be developed, and its management contractors, Manitoba International (Winnipeg, Canada), have already trained some technical staff abroad to acquire technical and strategic skills. Looking at an investment of $8 billion, the TCN will work jointly with the Infrastructure Concession Regulatory Commission to achieve its target.

TCN General Manager M.J. Lawal said that the company's power lines accommodate a maximum voltage of 330 kilovolts (kV) and that its transmission coverage extends to Benin and Niger. Despite low generation levels from the power companies, plans were in place to accommodate increased voltage to feed the distribution companies.

For related information, see July 17, 2014, article - Tetra Tech Wins $64 Million Contract to Support Obama's 'Power Africa' Program.

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