Vice President Yemi Osinbajo, says Nigeria could become one of the best power markets in the world, if she sustains the strides made by the Buhari administration in the electricity sector, with increased investments and improvements in the value chain.
Osinbajo stated this on Tuesday at the official commissioning of the 240MW, Afam III Fast Power Project in Port Harcourt, Rivers State, where he represented the President.
According to him, Nigeria has all the ingredients to create one of the best power markets in the world.
“I am also confident it will happen within our lifetimes. The challenge before us now is for the industry to leverage the improved commercial environment that has been created to sustainably supply electricity and improve service to all citizens. This administration has made significant strides in this direction.”
Referencing the efforts of the administration in the sector, Osinbajo said the complete story was that in the past few years new investors were coming in to invest in the power value chain.
“These transactions include Quest PLC that became core investor in Yola disco in 2020 with the transaction worth N19 billion. Last month the National Council on Privatization, NCP, approved the 30-year concession on Zungeru Hydro Power Plant at $70 million a year. And overall, the story of the Nigerian electricity supply industry is also getting better.
“Since 2020, the Nigerian Electricity Regulatory Commission has executed all of its bi-annual review processes without fail. In 2019 subsidies reached a peak of N584 billion in an environment that was very burdensome on the Nigerian Government’s fiscal position.
“The introduction of the Service Based Tariff, the Payment Discipline initiative for the sector (through NERC and CBN) and the introduction of the National Mass Metering programme have led to a doubling of market collections in the Nigerian Electricity Supply Industry from N40 billion per month in 2020 to a record of N80 billion per month in the 1st quarter of 2023.”
He also stated that in 2021 and 2022 five underperforming DISCOs were brought into a restructuring program that has led to a N10billion per month reduction in shortfalls. If this trajectory continues, the Nigerian Electricity Supply Industry will attain self-sufficiency by the end of 2023.
Speaking further, the Vice President noted that the Buhari administration has created programmes “for off-grid electrification and revamped the Rural Electrification Agency, such that it now has first rate capacity to provide renewable and off-grid electricity supply.
“This administration has also completed and concessioned the Zungeru Hydroelectric power plant that will add 700MW of renewable energy to our energy mix. We believe we are on track to electrify all Nigerians in the next decade as we look forward to the next administration scaling up already existing programmes.”
While commending the management of Transcorp Power PLC and other investors in the power sector, Prof. Osinbajo said the renewed interest came as a result of deliberate policies of government.
“The tide (inadequacy of investment) is turning with indigenous power entrepreneurs such as Transcorp Power, and Heirs Holding making significant investment such as this hundred percent acquisition of the 966MW installed capacity Afam Power Plc and Afam 3 Fast Power Limited (jointly referred to as “Afam GenCo”), at an acquisition cost of N105.3 billion.
“Only yesterday, the National Council on Privatization formally delisted Transcorp Power PLC (formerly known as Ughelli Power PLC) from routine Monitoring & Evaluation by the BPE, indicating yet another successful power investment.”
According to the VP “The last few days, I must say belong to Transcorp Power because at the same meeting of the NCP the council approved Transcorp Power consortium as preferred bidder for the acquisition of the Abuja disco.”
Besides Transcorp Power, the VP commended the efforts of “the Rivers State Government and the Afam Paramount Ruler and communities adjoining Afam for working constructively with the power companies to ensure continued peace and security in the Afam Cluster, without which we wouldn’t be here today commissioning this project.”
He also commended General Electric “for its continued investments and partnership in Nigeria to improve our electricity industry,” while also adding the DG, the entire BPE team and the National Council on Privatization for another successfully completed transaction.
Prof. Osinbajo however noted that the country “will not make progress if our industrial and urban power supply that is anchored on large scale gas power plants does not improve. Despite having one of the largest gas reserves in the world, the gas supply and security for the power sector has remained inconsistent and is hampering reform efforts.”
He further stressed that payment security to gas suppliers remained one of the greatest challenges to electricity supply and encouraged “Gas Power Producers and gas suppliers to have a fundamental re-think about supply security and proffer ways to ensure our gas power supply base can improve and meet the gap and growing demands of the Nigerian Electricity Supply Industry.”
Earlier in his remarks, Rivers State Head of Service, Dr. Rufus Godwin, who represented Gov. Nyesom Wike, thanked the Vice President for his love and commitment for the wellbeing of Rivers people and Nigerians at large, stating that “the VP has become a son of Rivers and is welcome to the State anytime.”
He equally thanked the Federal Government for Afam Power Project, noting that besides being host to a number of Federal Government projects, “Rivers State is a business hub in the country and contributes 40% of electricity to the country.”
In the same vein, the Group Chairman of Transcorp Plc, Mr Tony Elumelu, praised the Federal Government, President Muhammadu Buhari and Vice President Yemi Osinbajo for their unflinching support to the power sector and for seeing to the completion of Afam Power Project.
He added that “it has not been an easy journey to get to the completion of Afam Power Project with 240MW,” which he said would connect one million households in the country.
In his own remarks, the President of General Electric in Nigeria, Muhammed Mijindadi recalled how on some difficult occasions in the process of delivering the project, the US-based company sought the quick interventions of the Vice President.
“The Vice President promptly intervened several times,” he disclosed adding that there were times when things were proving rather difficult. He praised the VP, the late Chief of Staff, Abba Kyari, the BPE, Ministers of Power and Finance, for their support.
General Electric supplied the mobile power generating equipment to the Afam 3 Power Plant, provided the electrical balance, installation, commissioning services and training to the plant operators.
Dignitaries at the event were the Permanent Secretary in the Ministry of Power, Mr Temitope Fashedemi, who represented the Minister, and the Director General, BPE, Mr. Alex Okoh, among other officials.
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