Page 6 - AfrElec Week 01 2021

AfrElec INVESTMENT AfrElec

Nigeria to begin $1.6bn power

investment in 2021

NIGERIA THE Nigerian government is confident that the the generation, transmission and distribution
World Bank-backed $1.6bn investment in the cost, including metering, without having to con-
country’s transmission work will begin to be felt tinuously maintain the status quo. This is being
this year, with up to 7,000 MW available through vigorously pursued by all stakeholders.
the grid. “Secondly, the issue of alignment of the value
Abuja also aims to end subsidies by the end of chain will be dealt with. As we speak, we have
2021, a key plank of the country’s international about 13,000 MW installed capacity, whereas
donor-backed reforms. generation and transmission stand at 8,000 MW.
The government said this week that it will “Meanwhile, the total delivered peak power
begin investing the money in 2021, under a remains at 5,500 MW, so the Siemens pro-
pioneering set of oversight rules put in place by gramme, which is coming to align the value
global MDMs. The investment programme is to chain, is one of those things we need to see, but
be run by Siemens in a bid to reduce corruption. the target is that by the end of 2021, we will have
Director of Renewables and Rural Power 7,000 MW; by 2023, we will have 11,000 MW and
Access Faruk Yabo said on national television by 2025 we should have 25,000 MW.
that the federal government’s target of hitting “This is being strongly complemented by the
7,000 MW by the end of 2021 through the Sie- current TCN transmission and rehabilitation
mens intervention programme was still on expansion programme, which is also heavily
course. supported by the donors. I think we have cur-
Yabo said that the country had managed to rently about $1.6bn available for this particular
avoid the usual power cuts in December, in pre- work,” he stated.
vious years caused by changes in water levels. Meanwhile, he confirmed that tariffs would
He attributed the “feat” to rejigging and rise in 2021, a key component of the elimination
realignment of the Nigerian Electricity Supply of subsidies and the development of cost-reflec-
Industry (NESI) by the Ministry of Power. tive tariffs.
“Looking ahead, the ministry has five key The director said the issue of tariffs is a largely
focus areas, which, if judiciously pursued, will legal issue, stressing that the manner of tariff
lead us to better prospects. Number one is the increases is enshrined in the Electric Power Sec-
issue of addressing the liquidity problems of the tor Reform of 2005 and requires, as of law, a bal-
sector. ance between customers and investors.
“It is very important for the sector to exit the “It will be very difficult for a country like ours
current subsidy regime and happily enough, with so many demands to continue to pay tril-
based on policies under the power recovery pro- lions of naira in terms of subsidies. We can all see
gramme, the World Bank and other agencies are that on account of technological advancement,
working with the sector to actually create an exit sources of power supply like solar have continu-
route through providing loans. ously become cheaper, and as we speak, a lot of
“These loans will allow for capping out the countries are getting their supplies much lower
subsidies in terms of the shortfall in the electric- than the current tariff that we have,” he said.™
ity market that will still allow for the payment of

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