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Power: Elumelu proposes Genco, Disco ownership of transmission network

By on November 20, 2014

The Chairman of Transcorp and Heirs Holdings, owners of the Transcorp Ughelli Power Plant, Mr. Tony Elumelu, has asked the federal government to consider privatising the Transmission Company of Nigeria (TCN) and allowing generation and distribution companies in the electricity value chain to own and operate it if privatised.

Elumelu, who spoke on “unlocking investment and growth in the West African electricity sector” on Tuesday at the 11th edition of the West African Power Industry Convention (WAPIC) in Lagos, explained that the seeming weak operational structure and non-competitive character of the TCN had informed his proposal.

He also disclosed plans to upgrade the generation capacity of the Transcorp Ughelli power plant to about 3,000 megawatts (MW) within a three-year phased project plan.

Speaking on the challenges of the electricity industry vis-à-vis transmission and adequate gas supply to power plants, Elumelu noted however that with the TCN still procrastinating on its expected mandates, generation and distribution companies in the value chain might be increasingly doubting its capacity to deliver on its expected responsibilities whenever electricity production improves in the country.

“Transmission is a major problem and I think we need to do something as a country if we mean to overcome this challenge.

“What I think we should do as relates to the transmission is that I know we have just concluded the privatisation of the Discos and Gencos but I will like to propose that we consider it very seriously to privatise the transmission network,” Elumelu said.

He further stated: “I have two ideas; one is that we can privatise the transmission company for investors to come in and take charge of its operations or we can say that since transmission is core and key to everybody, both the Gencos and Discos and now that the private companies are involved and in charge, we can have an arrangement where government can value the transmission lines and get the Discos and Gencos to form a company which will own the transmission line with mutual destiny.

“It will be in our interests that the transmission lines work because if they don’t work, we won’t evacuate or distribute and if the Gencos and Discos will come together to fund this, I think as a private sector driven by corporate goals and the need to make it work, it can be truly revolutionary and can help us achieve this.”

Speaking on the ambitious expansion plan which will see of Transcorp Ughelli power plant generate about 3,000MW of electricity within the next three years, Elumelu posited that the expansion plan will be further buoyed by an investment in gas production and supply from the company’s interests in oil fields in Nigeria.

“Today, we are happy to say that we have crossed 500MW of electricity, this year, we intend to cross 700MW and by next we will go up to 1,000MW. We are in discussion with a group on a plan that can add additional 1,000MW and then with General Electric for 1,000MW; that will take between two to three years in phases and that should take our plant to 3,000MW,” he explained.

Meanwhile, the Minister of Power, Prof. Chinedu Nebo, in his opening remarks, reiterated that notwithstanding Nigeria’s challenges in her electricity sector, she still remained a viable destination for power investors from across the world.

Nebo justified his assertion when he stated that: “Nigeria is Africa foremost investment destination with over 160 million people, Nigeria has the seventh largest population and one of the fastest growing economies in the world.  Our economic performance is robust and adequate power supply is a sine qua non to realise the vision of becoming one of the 20 largest economies in the year 2020.

“In Africa today, Nigeria is the preferred destination for foreign Direct investment (FDI).  In the last three years, it has attracted 10 per cent of the total FDI to Africa totaling over $20 billion.  This became possible in view of the favourable investment climate.”

The minister explained that government’s reform of operations within the power sector had given opportunities to private sector investors to initiate investments that could move the sector forward to aiding the country’s industrialisation.

“One of the main objectives of the power sector reforms amongst others was to encourage the successor companies to undertake investment programmes to ensure that the sector is driven by private hands whilst the federal government provides the enabling environment,” Nebo added.

 

[ThisDay]