TCN: Discos Need $4bn Investment to Distribute 20,000MW

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Managing Director of the TCN, Mr. Usman Mohammed

 Clarifies N72bn FG’s planned investment

Chineme Okafor in Abuja

The Transmission Company of Nigeria (TCN) has said the electricity distribution companies (Discos) in Nigeria would require to invest about $4 billion over the next three years to be able to match its ongoing expansion of the national grid to a capacity of 20,000 megawatts.

The company has also clarified that its appointment by the federal government to partly manage the N72 billion the government plans to invest in the upgrade of the distribution networks is not just because of the need to wheel the excess electricity generated into the distribution networks but also to protect the transmission facilities, which it claimed were frequently burnt by alleged inefficiencies of the Discos.

Speaking tuesday on the Nigerian Television Authority (NTA) in Abuja, which was monitored by THISDAY, the Managing Director of the TCN, Mr. Usman Mohammed, explained that the $4 billion projected investment figure emanated from a study the TCN had conducted on its grid expansion programme and which included an assessment of the Discos’ capacities and expansion needs.

Mohammed, who faulted the opposition mounted by the Discos through their umbrella association – the Association of Nigerian Electricity Distributors (ANED) against the N72 billion planned investment, stated that modalities for the disbursement of the fund had not been agreed yet.

“What is N72 billion? It is small money compared to what the Discos need to upgrade their networks. Over $4 billion was what we simulated as the hard investment that needs to be done for the Discos to meet up with our expansion plan of 20,000 megawatts by 2021,” Mohammed said.

He added, “It is not the Discos that say they are not aware of this (N72 billion investment) but the association of Discos and we deal with people we signed contracts with not people we don’t know.

“The N72 billion is an intervention by the government and actually due to the failures of the Discos to perform, which is creating a lot of problems in the system. The modalities for its implementation either it is a loan or not has not been finalized.”

Asked if the TCN and government have convinced the Discos of the objectives of the financial intervention, he said, “We are working with all the Discos that are interested in expanding their network. The TCN is not solely managing the money, the Project Implementation Unit (PIU) is situated in the TCN but it is TCN and ministry of power and the Discos involved that are doing the evaluation for the investment.

“But why are we interested in the Discos? We are connected to the Discos and are interested in the Discos because we have lost transformers due to poor Disco network,” he said.

Mohammed noted that since the TCN initiated the Transmission Rehabilitation and Expansion Plan (TREP), the TCN has been able to achieve frequency controls of 49.5 and 50.5 hertz which he noted was first in the last 20 years.

According to him, the current spinning reserve in the sector was between zero and 40MW, adding that the Nigerian Electricity Regulatory Commission (NERC) has, however, approved that it competitively procures additional spinning reserves of up to 300MW.

“The tariff we were paying for spinning reserve was not good enough, NERC approved that we should go for competitive spinning reserve for 300MW and the ultimate is 450MW because it is supposed to be 10 per cent of the total generation capacity of the country,” he said while indicating that a supervisory control and data acquisition (SCADA) system the World Bank funded with $46 million in the past for the TCN cannot cover more than 40 per cent of the entire grid, hence, its decision to procure a new one.