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NIGERIA’S largest asset holders in the power sector, Niger Delta Power Holding Company, NDPHC, is owed over N150 billion by the Nigerian Electricity Supply Industry, NESI, despite offering the cheapest tariff in the industry, documents from the company have shown.
NDPHC, a company owned by the Federal, states and local governments, was incorporated under the Corporate Affairs Commission with the mandate to manage power projects tagged: The National Integrated Power Project (NIPP).
The NIPP was conceived in 2004 by the Federal Government and was developed to address the issues of insufficient electric power generation and excessive gas flaring from oil exploration in the Niger Delta region. Ten power plants were designed in gas-producing states as part of the project.
The power plants include: Ihovbor Power Station Benin, Edo State with the capacity of 4 x 112.5 MW (ISO 126 MW); Calabar Power Station, Cross River State with the capacity of 5 x 112.5112.5 MW (ISO 126 MW); Egbema Power Station, Imo State with the capacity of 3 x 112.5 MW (ISO 126 MW); Gbarain Power Station, Yenagoa, Bayelsa State with the capacity of 2 x 112.5 MW (ISO 126 MW).
Others are Sapele Power Station, Delta State with the capacity of 4 x 112.5 MW (ISO 126 MW); Omoku Power Station, Rivers State with the capacity of 2 x 112.5 MW (ISO 126 MW); Alaoji Power Station, Abia State, combined cycle plant with the capacity of 4 x 112.5 MW (ISO 125 MW) and 2x steam 255 MW; Omotosho II Power Station, Ondo State, with the capacity of 4 x 112.5 (ISO 125 MW); Olorunsogo II Power Station, Ogun State, combined cycle plant with the capacity of 4 x 125 MW and 2 x steam 125 MW; Geregu II Power Station, Kogi State, with the capacity of 434 MW.
Over time, NDPHC has metamorphosed into a leading electricity generating company in Nigeria and Africa at large. Besides generation, NDPHC has also been involved in the provision of critical infrastructures in Transmission, Distribution and Renewable Energy projects in a bid to lighting up the nation and bridging the power supply gap in the power industry.
With its assets spread across the electricity supply value chain, NDPHC remains the largest power assets owner in the country and has demonstrated over time, its capacity is not just able to build these facilities but also able to put in place excellent management models to operate them.
These assets cut across Generation, Transmission, Distribution and Renewable Energy subsectors.
Despite having these assets and also having the cheapest price per kilowatt among thermal producers, the National Control Centre, NCC, still gives it least priority when buying power and it is the first to be asked to disengage.
Speaking on this, the Managing Director of NDPHC, Mr. Chiedu Ugbo said: “I am managing generation assets: I have tariff that is 28 percent lower than my peers meaning that I am subsidizing the sector by 28 percent. We have met the regulator a number of times on this to say that the government has to take a decision on whether we are a social company or a business entity because if they increase our tariff, it will lead to overall increase in revenue judging by the capacity of 4,000MW that we have.
“Again, I have over 3,500 MW capacity but I am told to supply only 700MW and it is on that I get paid. Now, DisCos remit about 50 percent. It means that I get paid 50 percent. Right now, what is owed to NDPHC by the industry is somewhere around N150 billion. Which company survives with that level of debt?”
He however, gave assurance that the problems with the electricity sector would soon be resolved with the various interventions.
According to him, “NDPHC is providing interventions in transmission across the country aside from NDPHC playing a big role in improving the transmission capacity of Transmission Company. President Muhammadu Buhari earlier this year commissioned the Lafia Transmission Substation. In 2021, we commissioned 2×60 megawatts in Awka that will improve transmission capacity by about 100 MW. We did a similar project in Abeokuta and Akwa Ibom State”.
He pointed out that while the DisCos and TCN were earning money through facilities provided by NDPHC, neither TCN nor any of the DisCos had paid for the facilities.
In late August last year, Nigeria’s Vice President, Prof. Yemi Osinbajo commissioned the 2x60MVA, 132/33KV substation in Awka, Anambra State, with a promise that the Federal Government will continue to create an enabling environment for businesses to grow.
The new substation, built by the Niger Delta Power Holding Company Limited, NDPHC, will deliver about 100 Megawatts of power to the Anambra State capital and its environs.
Vice President Osinbajo stated then “Since the technical commissioning of the substation in November 2020, this new substation has been in service providing 33KV evacuation capacity for at least 100MW of power through its two units of 60MVA, a total of 120MVA.
“The commitment of the administration to ensuring the completion of this Awka NIPP 132KVA grid substation now provides a hitherto unavailable 70MW additional power capacity for driving industrial growth and boosting the economy of the state with positive knock on effect on employment and social-economic upliftment for residents of the state”.
Earlier this at the commissioning of the new 2X150MVA and 2x60MVA 330/132/33KV transmission substation built by NDPHC, the Minister of Power, Engr. Abubakar D. Aliyu said the new power substation in Lafia, Nasarawa State will boost electricity supply to the state with at least one million households and businesses impacted.
Aliyu noted that the substation was one of the best in the country, saying Nasarawa has become the centre point of electricity transmission to neighbouring states.
“This is a 330 kilovolts substation which the people of the state are already enjoying. It started in 2016 and thank God it is already completed now. What it means for the people here is that they have already started enjoying quality electricity in Nasarawa here.
Before now they received their electricity from Jos which wasn’t sufficient.
“With this substation, Nasarawa has become a centre point for electricity transmission around its environs”, he added.
On the impact of the facility on consumers in the area, Mr. Chiedu Ugbo explained that the project would have a tremendous impact on the economic activities of the state as it would improve power supply to the state greatly.
According to him, the facility has six feeders that would serve at least one million households and businesses in the state. “We expect the project to improve the well-being of every resident of Lafia and the entire Nasarawa State and improve economic activities, creation of jobs.
“Also because of the big nature of the project, we expect it to become the transmission hub in the country. TCN is already working on the connection. A 330KV connection from here to Abuja, to back feed Abuja”, he stated.
Ugbo added: “NDPHC decided to build this Lafia Substation essentially to step down electricity from the high voltage transmission line (overhead Lalio)to a lower voltage level where the distribution company (Abuja Disco) can now draw electricity and serve close to one million households and businesses in the state. It will thus help boost economic activities in the state, with positive knock-on effects on employment and socio-economic upliftment of the residents of the State”.
One of the issues that have challenged the operation of the company is that there is no single take or pay contract for NDPHC plants like Nigerian Bulk Electricity Trading Plc has with some other generation companies. The situation has therefore left the company unable to sign contracts with oil companies that would guarantee gas supply to the plants.
NDPHC is not also paid a dime to compensate for its spinning reserve to compensate for gas and other expenses going into maintaining its turbines when power is not being taken.
Despite all these, the company has continued to run efficiently without once returning to the Treasury for bailout since the initial seed capital was provided.
-Vanguard
KN
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