Still A Long Way Off

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Nebo

Chinedu Nebo, minister of power, admits that the ongoing nationwide power sector reform is yet to register the desired impact in about 30 million households

By Anayo Ezugwu  |  May 26, 2014 @ 01:00 GMT

NIGERIANS are yet to feel the impact of the ongoing power sector reform because many homes are still in darkness. Chinedu Nebo, minister of power, has admitted that about 30 million households in Nigeria are still without access to electricity. Nebo, who made the remarks at the sideline of a forum organised by his ministry in conjunction with the Standard Bank Group, noted that there are huge investment potentials in the nation’s power sector waiting to be tapped.

The minister said he was optimistic that through the ongoing power sector reform, Nigeria would achieve the feat of connecting an average of 1.5 million households every year adding:  “The country is hoping to achieve up to 75 percent access to electricity by the year 2020.”

Nigeria, according to him, needs to quadruple its 4000MW generation capacity to meet the huge demand for electricity in the country. “In Nigeria, access to electricity is way below 50 percent with about 30 million Nigerian households without electricity. I think it is important to mention all these, so that we begin to see why Nigeria is a veritable location for investment in the electricity sector,” he said.

According to Nebo, demand for energy in Nigeria is so huge that the country needs to quadruple its current generation of 4000MW to service its teeming population of 170 million people. Nebo, who lamented Nigeria’s overdependence on gas for electricity supply, reiterated the need to encourage a robust energy mix in form of development of coal , solar, wind, biomass among other sources of power. These are already ongoing. “Our target is to achieve up to 75 per cent access to electricity by the year 2020, and by connecting an average of 1.5 million households every year. We will do that;  the ongoing reform of the power sector will improve access through grid extension, and non-grid solutions using renewable energy which includes solar, wind, bio-mass, small and medium hydros. Of these, about 70 per cent are thermal, gas-fired turbines while the rest are hydro. We need the coal, we need renewable energy, we need more hydros, we need solar, wind, we need bio-mass and all these are very critical.”

Diop
Diop

He stated that although Nigeria sits on the eighth largest gas deposits in the whole world, it cannot continue to generate most of its electricity by gas, stressing that  economics does not favour gas dependent. The minister noted that apart from the economic implications, acts of vandalism of the gas pipelines have made dependence on gas not very reliable.

Nebo stated further that the privatisation process aims at solving several years of neglect because, for many decades, as the population grew there was no corresponding development of infrastructure in the electricity sector. He added that if the power situation is fixed, the GDP rate may grow to a double digit from 6.5 percent yearly average, and issues of unemployment and poor industrialisation would be addressed.

Meanwhile, the World Bank Group has pledged to support the power sector in Nigeria. It announced that it has mobilised more than N2.5 trillion as part of its support to electricity generation in Nigeria. The Bank, which stressed how efficient, affordable and reliable access to electricity was essential for small and medium-sized enterprises in Nigeria to accelerate job creation, also announced various project series to support increased power in the country.

In a statement, Makhtar Diop, vice president in charge of the Africa Region at the World Bank, said he was glad that the bank was able to support Nigeria’s extensive energy reform programme and provide direct assistance to increase generation the capacity by mobilising nearly $1.7 billion of private sector financing through a range of instruments.  “These projects are a critical element of the World Bank Group Energy Business Plan for Nigeria. The World Bank partial risk guarantees approval  of up to $245 million for the 459-megawatt (mw) Azura Edo power plant near Benin City, Edo State; and up to $150 million for the 533-MW Qua Iboe Plant in Ibeno, Akwa Ibom State. The World Bank, IFC and MIGA Board of Executive Directors have approved a package of loans and guarantees supporting a series of energy projects that will help boost independent power generation and ease the crippling energy shortages in Nigeria, Africa’s largest economy. Both plants are gas-fired. The Boards of the IFC and MIGA approved loans and hedging instruments of up to $135 million and guarantees of up to $659 million for the Azura Edo project.

“The IBRD guarantees include forward-looking mitigation and risk-sharing arrangements, designed to augment the country’s power sector reforms while building market confidence and setting industry benchmarks. IFC’s investment and MIGA’s guarantee for the Azura Edo power plant will support a trail-blazing project at the centre of Nigeria’s ambitious power sector programme, while setting a replicable model for future power projects.”

The bank said Nigeria was hugely endowed with abundant energy resources, including having the world’s eighth largest reserves of natural gas. “Yet, 65 percent of its population – some 100 million people, have no access to electricity. Unlocking the flow of Nigeria’s extensive natural gas reserves will expand power supply and energy exports to neighbouring countries in the West Africa Power Pool. Support to private sector-financed Independent Power Producers, IPPs, forms a critical part of the Nigerian Government’s Power Sector Reform Roadmap, a strategy to improve power services throughout the country that is widely supported by the Nigerian public.”

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