FG Secures $6bn Funding for Power Sector

Minister of Power, Mr. Saleh Mamman

Emmanuel Addeh in Abuja

The federal government said it has so far secured a cumulative sum of $6.150 billion for the funding of various capital projects in the power sector.

It also noted that about N254 billion had been lost to the inability of the electricity industry to fully wheel its total 12,000 megawatts to the national grid due to a frustrating lack of infrastructure.

Minister of Power, Mr. Sale Mamman, who made the disclosure in a note marking his one year in office, said that as a market in transition, the sector has been experiencing teething challenges, but added that under him, the national grid experienced a peak of 5, 420.30MW, the highest ever.

“Infrastructure development is critical for the development of the power sector. The sector needs a reliable infrastructure to connect supply chains and efficiently move electricity from generation to households.
“Due to lack of infrastructure, the sector is unable to effectively utilise its generation capacity of over 12,000MW and incurred over N254 billion as the cost of unutilised capacity.

“However, power infrastructure is capital intensive in nature. Federal government allocation alone is inadequate to cater to the huge funding requirements.

“It on this basis that this administration developed an innovative approach of sourcing funding needed to execute critical infrastructural development needed for the sector.
“I am glad to state that to date, a total sum of $6.150 billion has been secured for infrastructural development” he said.

A breakdown of the funds showed that the Siemens deal would gulp $2.3 billion while the Transmission Rehabilitation and Expansion Programme (TREP) will consume $1.6 billion.

In addition, the federal government noted that a $550 million facility had been secured for the Nigeria Electrification Project (NEP) from a World Bank and African Development Bank (AfDB) arrangement, including another $1.7 billion to ensure that the power industry becomes more efficient.

It stressed that with the $6.150 billion in funding, the present administration has commenced the implementation of critical infrastructure that will enable the country to achieve generation, transmission, and distribution of 25,000MW of electricity by 2025.

When deployed, the government noted that the expected infrastructure will reduce system constraints, enabling wheeling capacity of power sufficient to drive industrial growth in the country as originally envisaged by the Economic Recovery and Growth Plan (ERGP) (2017).

It said that a Special Purpose Vehicle (SPV) called FGN Powerco is in the process of being set-up following President Muhammadu Buhari’s approval, which will warehouse the project’s contingent liability for accountability.

“We have also constituted the Nigerian Project Management Office (PMO) with the sole responsibility of providing project management of the project on behalf of the Nigerian Government.

“Additionally, in a complementary way, we are also implementing the Transmission Enhancement Programme. The Federal Ministry of Power working with key development partners; World Bank, AfDB, JICA have raised $1.6 Billion for Transmission Rehabilitation and Expansion Programme (TREP), which is ongoing now with major projects.”

Mamman listed the projects as the Alaoji-Onitsha, Delta Power Station-Benin and Kaduna-Kano, $410 million while $29 million is intended to build a 330kV DC 62KM line between Birnin Kebbi and Kamba.
Also included are the Lagos/Ogun Transmission Infrastructure Project (JICA)-$200 million, Abuja Transmission Ring Scheme (AFD)-$170 million and Northern Corridor Transmission Project (AFD & EU)-$274 Million” the minister said.

To increase energy access for an estimated 80 million Nigerians that are without electricity access, the ministry said it mapped the entire unserved clusters and identified the best means to provide them with electricity.

“This provides us with a digital map of the entire 11kV and 33kV lines of the entire country. Using these funds, we are implementing our two programmes, energising education where we provide an off-grid hybrid solar system to our various educational institutions” the government said.

Additionally, Mamman said the federal government was working on the Mambilla project which has the potential of stimulating economic development and enhancement of living standards of millions of Nigerians.