FG mulls recapitalisation strategy for power companies

FG mulls recapitalisation strategy for power companiesFollowing the debate of either to recapitalise or repossess the electricity companies unbundled from the defunct Power Holding Company of Nigeria (PHCN), Vice President Yemi Osinbajo has disclosed of a new strategy to recapitalise them through a new electrification road-map.

According to him, despite the generating companies producing about 8,000 megawatts (MW), and transmission capacity of about 7,000MW, distribution has continued to hover at an average of about 4,000MW, leaving a lot of stranded power undelivered to the end-users.

The Vice President revealed this yesterday, at the inauguration of the 2x60MVA, 132/33KV substation and associated 132kv transmission lines at Abeokuta, Ogun State.

To this end, Osinbajo charged the companies to recapitalise, as they need to come up with ways to generate funds to upgrade through the electrification road-map, which is in three phases.

He explained that the first phase of the project would focus on the deployment of finance and technology on commercial terms, where there would be an agreement with the transmission and distribution companies, in partnership with other international stakeholders to increase capacity for proper delivery of at least 7,000MW power.

The second and third phases would be on the elimination of bottlenecks in transmission and distribution as well as the utilisation of existing generation capacity to deliver at least 11,000MW to consumers, while expanding capacities from end-to-end distribution to 25,000MW power at the end of the project.

Agreeing on the need for industry recapitalisation, the Managing Director, Transmission Company of Nigeria (TCN), Usman Gur Mohammed, noted that the investment requirements by TCN alone stands at about $4.3 billion, adding that if that is not achieved, the benefits of the projects would be lost.

Mohammed, who described the substation and other similar ones as almost stranded, also noted absence of the necessary distribution infrastructure that ought to support the substation, which he said, will hinder optimum performance of its operations.

In his address, the Managing Director, Niger Delta Power Holding Company (NDPHC), Chiedu Ugbo, said the company currently contributes about 37 of the installed generation capacity to the grid but most of this capacity is stranded.

As a result, he said NDPHC has to intervene in a number of projects to enhance transmission and distribution capacity to wheel the stranded power.

Ugbo, who revealed that a similar project would be inaugurated in Awka, Anambra State, in the next few months, explained that NDPHC has added 1/60MVA 132 /33 KV transformers to the old Otta to improve supply, while the Abeokuta substation was also upgraded with 2x40MVA 132/33KV transformers to improve supply within its environs.

“We have been able to move the capacity from 70MW to about 290MW,” he added.

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