Investors see CBN’s $250m Intervention in Discos’, TCN Interface Will Stabilise Power Grid

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The intervention of the Central Bank of Nigeria (CBN), in the rehabilitation of interfaces between Nigeria’s transmission and distribution infrastructure to the tune of of $250 million will help in stabilising power delivery nationwide, some stakeholders have said.

Speaking on the matter recently, the Minister of Power, Abubakar Aliyu stated that the apex bank was already funding a $250 million project to ensure the rehabilitation of critical interfaces infrastructure between both segments to increase and stabilise power delivery.

This according to him, is in addition to the Siemens Presidential Power Initiative (PPI) that will bring in additional $2.0 billion or more to the transmission grid from the government.

With the critical intervention, the minister said government was expending almost $4 billion secured by the current administration to augment the grid, adding that much of the funds were being actively spent and the results will be felt soon.

According to him, the interface projects along others already being embarked upon by TCN brings ongoing projects in the transmission segment alone to 135 ongoing projects with 30 completed key substation projects and 12 transmission lines.

Also speaking on the issue, Market Operator (MO) at TCN, Edward Eje said the interface project was aimed at providing quick solutions at various transmission/distribution interfaces where there are challenges.

“This makes sense to me. It is a laudable measure to achieve a seamless and a hitch-free power transmission from the transmission stations to the distribution network,” said.

Eje’s position also aligned with the comments by the Managing Director and Chief Executive Officer of Nigerian Bulk Electricity Trading Company, (NBET) Dr. Nnaemeka Ewelukwa.

Ewelukwa disclosed that the apex bank was able to identify critical projects that could quickly address and restore normalcy to the sector in the near term.

“The CBN has actually performed a very positive role in trying to sort out these electricity market challenges. The CBN is working with TCN and the Discos. CBN basically asked what are those critical projects that if they are addressed today can quickly yield results in the sector.

“This is even as the federal government is doing the Siemens project and TCN is implementing the report. The issue is that what are those critical projects that if they are done today, will unlock additional megawatts quickly.

“And so the DISCOs and TCN worked together to come up with a list of some critical projects and I can’t be specific on the amount, maybe we can furnish that subsequently but that is what is happening,” he said.

The NBET’s boss said CBN decided to find those critical interventions so that there could be some quick wins even as the bigger project is being implemented.

In his intervention, an energy expert, Oyebode Fadipe, stated that one of the fundamental issues in the power sector was poor liquidity in the industry.

He added that while it is true that one of the expectations of the privatisation programme is that the sector would be self funding so that government would ultimately stop funding it, the benchmark had not been realised.

“It is in direct response to this liquidity challenge that the CBN was brought into the loop. There is therefore sense in the involvement of the CBN in the interface projects between Disco and TCN,” Fadipe said.

He stated that the action of the apex bank would help to bring more stability in the grid and by so doing, more people will be able to receive electricity for their use.

Fadipe stated that quality of supply is also expected to increase because in some locations where the transformers are overloaded, they would be uprated.

Another stakeholder who didn’t want his name in print, said that the intervention in the interface project showed the obvious gap that had been left over the years.

Although he admitted that the intervention is critical and requires sustainable approach possibly on a yearly basis, he explained that the development is however not devoid of bureaucratic challenges which is associated with the government.

Also speaking, a consumer advocate and legal expert, Kunle Olubiyo noted that the continuous intervention while critical, shows that the essence of privatising the sector may have been defeated.

Olubiyo noted that the poor governance system, lack of monitoring, accountability and weak setup of the market were responsible for the financial issues in the sector.