• FG guarantees Kano, Qua Iboe power purchase agreement
Ndubuisi Francis and Chineme Okafor in Abuja
A quarterly report on the operations of Nigeria’s electricity market for the second quarter of 2018 (Q2) by the Nigerian Electricity Regulatory Commission (NERC) has disclosed that only four out of the 11 existing electricity distribution companies (Discos) in Nigeria complied with their existing metering agreements with the Bureau of Public Enterprises (BPE) within the period under consideration.
This is coming as the Federal Ministry of Finance has provided counter guarantees for a power purchase agreement (PPA) to Kano State for the purchase of electricity to be generated by the 540 megawatt (MW) Qua Iboe Power Plant (QIPP) in Akwa Ibom State
The NERC report, which was obtained from the webpage of the regulatory commission yesterday in Abuja by THISDAY, showed that the only Discos that adhere to their metering plans as agreed with the BPE in 2013 during the power privatisation exercise include: Abuja, Benin, Eko, and Port Harcourt.
These Discos have reduced their metering gaps to 45.6 per cent; 36 per cent; 50 per cent; and 31.6 per cent.
The report, which also indicated that as at June 2018, the total number of registered electricity users in Nigeria increased by 9.32 per cent, noted that the four Discos now have 526,120 of 967,667; 548,261 of 856,292; 235,038 of 470,766; and 310,616 of 453,818 of their respective customers now metered.
It explained that the seven other Discos have continued to perform badly with their metering plans, adding that Kano; Kaduna; and Yola Discos have been the worst with 80 per cent; 71.9 per cent and 78.8 per cent existing metering gaps, respectively.
“The metering of end-use customers has continued to be a priority of the Commission and the status of metering as at the end of June 2018 is, of the total of 7,973,867, registered active electricity customers, only 3,547,129 (44.5 per cent) have been metered thus, 55.5 per cent of end-use customers are still on estimated billing,” said the report.
It added: “In comparison to the preceding quarter, the number of registered customers increased by 9.32 per cent, while the percentage of metered customers increased by 3.29 per cent, indicating a greater increase in the registered customer population relative to the meter roll-out.”
According to it, the increase in the number of registered customers was attributed to the ongoing enumeration exercise by Discos, during which illegal consumers of electricity are now captured on the billing platform of the Discos.
“Notwithstanding the growth in the number of the metered customers, the total meters deployed by Discos during the second quarter of 2018 are significantly lower than the expected quarterly metering deployment under the performance agreement for the privatisation transaction.
“Whereas the performance agreement with Bureau of Public Enterprises envisaged deployments of 1,640,411 per annum (i.e., quarterly average of 410,103), only 113,126 meters were installed by Discos during the quarter under review,” it said.
The report explained that: “It is evident that only four Discos (namely Abuja, Benin, Eko and Port-Harcourt) had metered not less than 50 per cent of their registered customers as at the end of the second quarter of 2018”.
The report added that metering of end user remains a top priority to the Commission.
“To this end, the Commission continues to monitor the Discos to ensure total compliance with the Meter Asset Provider (MAP) regulations that was recently launched.”
Meanwhile, the Federal Ministry of Finance has provided counter guarantees for a power purchase agreement (PPA) to Kano State for the purchase of electricity to be generated by the 540 megawatt (MW) Qua Iboe Power Plant (QIPP) in Akwa Ibom State
The Minister of Finance, Mrs. Zainab Ahmed, who conveyed government’s approval, said “We are looking at this as a pilot project as this will help mitigate federal government’s plan.”
According to a statement by her media aide, Paul Ella Abechi, the ability to provide a counter guarantee would go a long way to reduce the burden on the federal government.
While soliciting the federal government’s guarantee, the Kano State Governor, Dr. Abdullahi Umar Ganduje had in a proposal to the minister dated January 7, 2019 highlighted the understanding reached with other partners in the project.
According him, QIPP has secured the firm commitment of equity funding of $350 million from Globeleq and project finance of $850 million from the International Finance Corporation (IFC), OPiC and African Development Bank (AfDB) for the construction of a thermal power plant located in Qua Iboe in Akwa Ibom State with a capacity of 540MW.