TCN Bemoans N270bn Stifling Debts By Discos, Seeks NERC’s Intervention

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  • Arrears hindering loan repayment to foreign agencies  
  • FG, Greenville LNG negotiate gas supply to Kaduna Genco

Chineme Okafor in Abuja

The Transmission Company of Nigeria (TCN) yesterday disclosed that the total indebtedness of the 11 electricity distribution companies (Discos) to it (TCN) now stands at about N270billion.

Also yesterday, the federal government disclosed its willingness to have a private gas supplier – Greenville Liquefied Natural Gas (LNG), take gas to the 215 megawatts (MW) Kaduna power generation company (Genco) which had been delayed from producing electricity almost 10 years after it was initiated.

Speaking at a meeting with donor agencies in Abuja, Managing Director of the TCN, Mr. Usman Mohammed explained that the N270 billion unpaid debt was for the electricity transmission services it rendered to the Discos.

The TCN boss, who stated that the company was working hard to attain self-sustainability in its operations, stated that the debts, if paid, would enable it pay multilateral donor agencies that loaned it monies to execute transmission projects.

He however noted that the transmission company had reformed its project procurement and implementation processes and would be able to offset about $1.661 billion worth of loan it secured from multilateral agencies such as the World Bank and African Development Bank (AfDB) amongst others, to upgrade the national grid.

“The Discos owe us N270 billion cumulatively as uncollectible debts. We can finance our operation and so all the loans we have been taking, we are now signing agreements with the federal ministry of finance that we are going to pay the loans by ourselves,” said Mohammed.

“We also ask that the Nigerian Electricity Regulatory Commission (NERC) should agree to reset the books of the Discos.

“They are owing the TCN N270 billion but is it possible to collect that money until the books are reset so they can be clean. NERC (is) supposed to provide tariff that is cost reflective”, he added.

Mohammed equally stated that with reforms and improved in-house engineering capacity in the TCN, the company recovered 775 stranded equipment containers out of 880 units that were left in Nigerian ports for years. 

“We have delivered 67 power transformers with this method of taking over projects and completing them and also helping contractors to finish their projects,” he explained, even as he claimed that transformers installed from the recovered equipment containers have added up to 3100 megawatts (MW) of electricity transmission capacity to the grid.

According to Mohammed, the TCN would reconduct some major transmission lines in the country to recover up to 3000MW of transmission capacity.

Some of the lines to be reconductored, he stated, included the lines between Birnin Kebbi and Sokoto; Itu and Aba, as well as key transmission lines in Lagos. 

Decrying the status of investment in the power Discos, Mohammed said they required up to $4.3 billion worth of investment to meet up with the transmission capacity which he noted was now above 8000MW.

“The Discos require at least N4.3 billion dollars investment in the network. In capitalising the Discos, we have to recognise that we made a mistake in the privatisation. So, government should bring 40 per cent and owners of the Discos should bring 60 per cent.

“This money should come in a form that has an agreement of 20-year period and five-year moratorium so that we can have five years to reduce Aggregate Technical Commercial and Collection (ATC&C) losses, build the lines before we start paying the interest,” Mohammed explained.

In his remarks at the meeting, the Permanent Secretary in the ministry of power, Mr. Louis Edozien, said it was an opportunity for the TCN to brief donor agencies on utilisation of their loans for transmission projects.

Represented by the Director of Transmission in the ministry, Mr. Emmanuel Nosike, Edozien said: “Before the donor gave the funding, the transmission network has not been as it is, but the current management came up and has been doing all that you are seeing today.

“We want to hear from you what you will be doing to improve transmission and of course, help us with suggestions on what we can do with distribution because TCN has done much on transmission. Where we have problem today is the Discos.”

FG, Greenville LNG Negotiate Gas Supply to Kaduna Genco

Meanwhile, the federal government yesterday disclosed it would be willing to have a private gas supplier – Greenville Liquefied Natural Gas (LNG), take gas to the 215 megawatts (MW) Kaduna power generation company (Genco) which has been delayed from producing electricity almost 10 years after it was initiated.

Minister of State for Power, Mr. Goddy Jedy-Agba, stated during a visit to the LNG conversation and supply facilities of Greenville on the outskirt of Port Harcourt in Rivers state, that the government was desirous of growing the volume of power available for supply to Nigerians and would in that regard welcome a gas supply arrangement with the firm.

Contract for the 215 Kaduna Genco was reportedly awarded in November 2009, to General Electric (GE) and Rockson Engineering. Located within the Kudenda Industrial Area of Kaduna, the plant was designed to operate with dual thermal plant using Low Pour Fuel Oil (LPFO) and natural gas. It also has eight installed units of generation turbines but has not taken off due to sundry reasons which included fuel supply challenges.

But in his remarks after the facility tour, Jedy-Agba said: “I am sure the federal government will be interested in what is happening here, with  the three trains, but the fact is that the supply is high enough to supply the need of power plants for instance to Kaduna, Mando, Kano.

‘If we have these two plants powered by this facility, we are good to go. It will help in power generation, which is the government’s priority, with the supply from here power supply would improve. Kaduna power plant could use LNG from here of course, but I am not in the capacity to commit, but it is a buyer and seller (arrangement).”

The minister further stated: “It is an important facility to invest in and can supply the power needs of the country. We would patronise Greenville to the best of our ability if they keep to the terms of agreements, so hopefully we are in partnership.

“I want power for Kaduna and Nigeria and the president also wants power for everyone. I promise to facilitate the progress of feeding Kaduna plant from here.”

Commenting on the development, the Chairman of Greenville, Mr. Eddy Van den Broeke, stated that the company was ready to deliver gas to Kaduna Genco, and would be fully ready to supply it all its gas requirements by the end of January 2020.

“The visit is to realise that everybody claims there is no electricity in the country, but if facilities like this are repeated like this in the same area, that would give a huge advantage and before pipelines gets to the north, we can develop all the industry.

“There is a socio-economic problem in this country were the north has no gas or electric energy. We are absolutely ready to power the Kaduna power plant because GE has abandoned the site, we have taken everything upon ourselves. Train-one would be running by the end of November and train-two would be running by the end of January 2020 so the full organisation would be in place by the end of January 2020,” said Broeke.

Asked if the company had formally begun gas sales and supply agreement with the federal government for the Kaduna Genco, Broeke said the negotiations were ongoing.

Similarly, to meet up with the gas deliveries if the supply deal sails through, the Managing Director of Greenville, Ms. Ritu Sahajwalla, stated that the firm had a good number of standardised specialised LNG delivery trucks to sustain supply to the Genco.

Sahajwalla said: “We have 300 but 5000 trucks are coming on board. We are honoured that someone from government is looking to solve the power problem from a different angle.

“With this LNG, small industries can be mushroomed and by the time there are pipelines, they will grow at full capacity. We want to go through the power plant in Kaduna though we can choose to supply to other customers directly.”

She informed that Greenville commenced commercial production and supply of LNG in April 2019 to customers spread across the country, adding that at the moment it supplies LNG to Dufil Prima Foods in Port Harcourt which has a tank capacity of 110-meter cube with two vertical tanks.

According to her, Greenville has an initial fleet of 300 LNG fueled trucks, each with 23-ton cryogenic tanks, as well as LNG refueling stations strategically located Rumuji part of Rivers; Koton Karfe in Kogi state; Shagamu in Ogun state; Ikpoba in Edo; and Kakau in Kaduna, with plans to set up new stations in Lagos, Abuja, Kano, Jos, Bauchi, Maiduguri, and Sokoto.