•As CBN pumps N120bn into sector
Egbin Power Plant, Nigeria’s biggest power generating plant, presently threatening to shut down operations due to accumulating debts and scarcity of foreign exchange has concluded arrangements to construct two new plants in Tanzania.
This is despite Central Bank of Nigeria (CBN) pumping N120.2 billion into the electricity sector since January 2015 as stabilization facilities.
Managing Director and Chief Executive Officer, Egbin Power Plc, Mr. Dallas Peavey Jr. said his company was being owed N86bn while it was also owing gas suppliers approximately N30bn and that owners of the plant were considering a shut-down.
However, credible reports indicated that Egbin Power Plc, is expanding and set to mark its new territory in Tanzania, by constructing a natural gas-fired power plant.
While on a five-day tour in Tanzania last week, the Chief Executive Officer of the firm, Peavey, said that the construction of the plant is expected to commence shortly as the investment agreement with the host government has been signed, according to Tanzania Daily News.
“We plan to set-up two plants, each generating 450MW…all we are awaiting for now is government approval and TANECO’s (Tanzania Electric Supply Company) proposal,” Peavey said.
The only key pending issues so far include the plant specifications and the specific location to build the plant as management of the company has already visited Dar es Salaam six times, to hold talks with senior government officials, including the prime minister, Kassim Majaliwa.
In July, CBN disbursed a total of N55,456,161,481 from its Nigerian Electricity Market Stabilisation Facility (NEMSF) to firms in the power with breakdown showing that while all the distribution companies got N8,670,234,863.76; the generating companies – N35,834,536,939; gas suppliers N10,491,710,788.66; all the service providers in the power value chain were given a total of N459,678,889.55.
The July event marked the fourth batch of disbursement from the fund since inauguration in January 2015.
According to records obtained from CBN, total disbursements to distribution companies so far amounts to N49.73 billion (91.7%); gencos- N54.29 billion (62.5%), gas companies- N15.73 billion (36.9%) and service providers- N0.46 billion (1.7%).
Total disbursements under the initiative is N120.2 billion, representing (57%) of the total amount earmarked.”
Governor of CBN, Godwin Emefiele had explained that the CBN-NEMSF was initiated as part of the commitment it reached with stakeholders to address debts owed by generating companies to gas suppliers.
As part of terms and agreements for accessing the fund, the companies would use the loans to upgrade/refurbish their equipment and acquire new ones so as to improve service delivery. The facility was given at 10 per cent interest rate and repayment has commenced.
“Our review of the fund utilization and reports of impact by beneficiaries revealed that the intervention resulted in the restoration of a total of 905MW of power into the grid as a result of facility turn around maintenance, contribution of over 25 of the annual capital expenditure budget for the sector.
“Specific reports from Generating Companies revealed that there was execution of capacity recovery programmes in three hydro power stations as follows: Intake under water repair project, overhaul of Unit four and compliant metering/supplementary protection at shiroro dam; overhaul of 2G6 at Jebba Hydro and rehabilitation of 3units at kainji Dam under permitted utilizations of the facility. A total of 300MW capacity increase was reported as a result of fund utilisation towards rehabilitation of both plants.
“The Intervention has also enabled the Electricity Distribution Companies (DisCos) to provide bank guarantees to Nigerian Electricity Bulk Trader, purchase of over 171,071 units of meters comprising both maximum demand and single phase meters; for instance Kano, Electricity Distribution Company (KEDC) alone acquired 62,021energy meters with the facility within the period.
“Rehabilitation of over 332kms of 11KV lines and 130km of 0.45KV lines; 70,310 No 500 KVA transformers procurement and construction of 34 new distribution substations and acquisition of one mobile injection substation under confirmed permitted utilisation by the initiative,” Emefiele said.