Business
The Transmission Company of Nigeria is to expand its operations with a loan of N383 billion from international lenders
- By Anayo Ezugwu
THE Transmission Company of Nigeria, TCN, has secured $1.064 million loan under the Transmission Expansion and Rehabilitation Programme, TERP, from international lenders. Usman Mohammed, interim managing director, TCN, said the loan was meant to expand transmission to 14,000 megawatts.
In its scorecard published on its website, Mohammed said in the last 10 months TCN added 1,000 mw capacities to raise the wheeling capacity to 7,000 mw. He said the current capacity is much higher than the 4,500 mw capacity the distribution companies, Discos, can take. He said since January 2017 he was purging the agency of old habits to have an agency that practices global standards in expanding the electricity grid.
“We are working to raise the transmission capacity higher than the 7,000 mw because, according to the Power Pyramid structure which is the global best practice, when the generation companies, Gencos, attain 7,000 mw as they are now, the transmission capacity should be twice of that at 14,000 mw and the Discos network capacity should be twice of transmission which is 28,000 mw. But this is not the case now in Nigeria,” he said.
Mohammed said the local funding through the electricity market revenue is poor, at below 40 percent which does not support the huge investment plan. He noted that the shortfall is because of the Discos poor revenue collection. According to him, TCN is ensuring that some past mistakes in projects implementation are not repeated. He noted that some local contractors do not have the capacity to execute projects and that TCN this year has spent over N2.5 billion clearing containers at the ports as the contractors could not do it.
“Now we have decided that to pick contractors, we will need the original equipment manufacturers, OEM, that have been selected to bring in the equipment and have them install them themselves and not through the joint ventures or subletting of contracts that used to be the order in TCN,” he said.
Mohammed said procurement process of internationally financed projects delay but with his experience, the donors have agreed to do ‘Advanced Procurement’ to stop the delay of projects as it was in the past.
Analysis of the scorecard shows that the present administration is attracting over $1.064 billion (about N383 billion) loan from international donors with a 10-year moratorium at competitive interest rate. Some of the donors are the World Bank which is giving $486 million (about N174.9 billion), Agence Française de Développement, AFD, with $170 million (about N61.2 billion), and Islamic Development Bank, IDB, with $410 million (about N147.6 billion).
Giving the breakdown of what the funds will be used for under the TERP, Mohammed said he was yet to sign the World Bank’s $486 million loan but that the procurement for the projects under it are already at 50 percent stage. He noted that the ‘Brown field’ projects would be sited at existing facilities to expand the transformers and grid capacity, adding that it is the largest funding Nigeria has attracted in the power sector so far.
Some other projects under this section are the reconstruction of power lines to strengthen transmission capacity, installing a new Supervisory Control and Data Acquisition, SCADA, system as the existing one covers only 40 percent of the grid. Mohammed noted that the federal government had made two attempts to install a new SCADA which had failed but assured that this third attempt will be successful.
The SCADA, he said, will enhance internal communication process among the transmission segment, Gencos and Discos in the regulation of power frequency and the grid system. The AFD’s $170 million will go for the Abuja Transmission Project with over 60 percent of the procurement process completed. According the breakdown, two new 330 kilovolt (kv) transmission substations and five 132kv substations would be added to the existing infrastructure in Abuja.
Other projects here include the building of 2,400 mw capacity transmission lines around Sokoto, Kaduna, Kano and the north central region to strengthen the northern transmission corridor. The IDB will give $210 million to strengthen transmission lines around Alaoji, Afam, Owerri and Onitsha in the south where there are emerging power stations. Other projects will include the Delta-Benin axis, and the Kaduna-Kano transmission corridor.
The TCN boss said power supply in the northeast will be given a face-lift from another $200 million facility from IDB. He said a lot of power is lost by the time electricity is transmitted over a long distance from the mostly south and western power stations hence the need to build super transmission infrastructure that could boost the power quality to the region.
– Dec. 1, 2017 @ 12:20 GM
Tags: Kaduna Kano Sokoto TCN borrows N383bn to raise Transmission Capacity Transmission Company of Nigeria Usman Mohammed
