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Power firms need to spend $23.9bn – BPE

By on February 13, 2014

Power companies in the country require $23.9bn in capital expenditure over the next five years, the Director-General, Bureau of Public Enterprises, Mr. Benjamin Dikki, has said.

Dikki said this at a forum in Abuja, according to a statement made available to one of our correspondents on Tuesday by the Head, Public Communication, BPE, Mr. Chigbo Anichebe.

The BPE helmsman said the electricity distribution companies alone would require about $1.8bn in capital expenditure in the next five years for optimal performance going by the post-acquisition investment plans submitted to the privatisation agency by the core investors that bought into the Discos.

Dikki also said the Transmission Company of Nigeria required about $2.4bn to increase its power transfer capacity, make the network more stable and reliable, and improve efficiency of electric power transfer by reducing transmission technical losses.

He said the money would also enable the TCN to increase its transmission capacity to 16,843MW by the end of 2018.

Dikki said, “The sum of $11.7bn is the CAPEX funding requirements for the privatised PHCN successor Gencos to ramp up and expand capacity. This does not include the requirements of prospective Greenfield and ongoing Integrated Power Projects.

“Gas industry sources estimates that $1.5bn will be required annually for the next five years if we are to address gas challenges in the power sector. In other words, a total of $7.5bn is required in the next five years for gas infrastructure.”

Giving the breakdown of the funding requirements of the different Gencos as proposed by the core investors, Dikki said Ughelli Power Plc required $604m; Sapele Power Plc, $394m; Geregu Power Plc, $200m;  Afam Power Plc, $850m; Kainji Hydro, $456m; Egbin Power Plc, $1.7bn; and Greenfield IPP, $7.5bn.

The BPE boss said the cardinal objectives of the Federal Government’s power reform programme included reducing the cost of doing business in Nigeria so as to attract new investments through the provision of quality and dependable power supply; and improving the overall efficiency of the distribution, generation and transmission networks.

Others, he said, were to provide Nigerians with basic and affordable infrastructure to enable them to create employment for themselves; create an electricity market that was private sector-driven; and to attract massive investments across the value chain so as to expand electricity coverage.

Dikki also announced that the preferred bidders for the Afam Power Station in Rivers State and Kaduna Electricity Distribution Company had completed the payment of 25 per cent of their bid prices for the two firms.

According to him, the investors in the power firms will have to pay the balance within the next six months, counting from the date they tendered the first sum.

Dikki said the preferred bidders had paid the 25 per cent of the bid prices on the due date.

The Federal Government and the preferred bidders had earlier completed negotiations on the Share Purchase Agreements for both firms.

The bid for the Afam Power Station, with installed capacity of 766 megawatts of electricity, was won by the Taleveras Group Limited.

The KEDC, whose bid was won by North West Power Limited, is to supply electricity to Kaduna, Kebbi, Sokoto and Zamfara states, and has a distribution capability of 344MW and a peak load demand of 520MW.

The BPE boss stated that post privatisation monitoring of all the power firms by the bureau would commence soon.

He said, “That will commence in May. The Share Purchase Agreement gives a six-month period to allow the new owners to settle in. Already, we have commenced serious activities to prepare us for that purpose.

“The whole of the BPE employees went through a one-day workshop recently in order to familiarise them with the terms of the agreement and those ingredients to look out for in the monitoring exercise.

“As soon as the six-month period expires, we will move in and see exactly what these companies have done in terms of implementing the performance agreement and the SPAs.”

Similarly, Dikki charged the electricity distribution firms to be up and doing in the collection of tariffs from consumers.

Specifically, he asked the firms to employ “aggressive approach” in their drive for improved revenue collection.

Dikki gave the charge during a technical meeting organised by the Nigerian Bulk Electricity Trading Plc for new owners of the successor companies of the PHCN in Abuja on Tuesday.

 

 

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