Power distribution networks in various parts of Nigeria have been collapsing as a result of the rainfall being experienced across the country, the Transmission Company of Nigeria has declared.
According to the TCN and other stakeholders in the power sector, this and more were reasons why it has become vital for the Federal Government and investors in power distribution companies to recapitalise the firms in order to invest adequately in the networks of Discos.
TCN’s Managing Director, Usman Mohammed, disclosed this recently in Abuja while addressing interested parties who submitted tenders for the design, supply and installation of Optical Ground Wire across some transmission lines and Universal Transport Network Equipment at some substations for monitoring, control and maintenance of system operation facilities.
He said, “Another new dimension that speaks to why the distribution arm must be recapitalised is the fact that when it now rains anywhere across the country, the distribution network collapses like toilet paper. Even Abuja that was built as a modern city, three times it rained in Abuja for not more than 10 minutes, I drove round Abuja city centre and more than 90 per cent of Abuja has no electricity.
“Why? Because even the network that was built by FCDA (Federal Capital Development Authority), which is a public company, cannot be maintained by the private sector operator. They (private operator) have mismanaged and they could not manage it, to the extent that when it rains, Abuja network, which is supposed to be a modern network, collapses like toilet paper.”
Mohammed added, “This is how all over the country, their (Discos) networks are collapsing because of rain. I will give you another example, on May 21, the whole country had this problem of overvoltage. To the extent that we had a system collapse, we tried to bring the system back, but because of the dropping of load by the Discos, we could not secure anything but to force the system to collapse again.
“This was because if we had left the system for another five or 10 minutes, we would have had fire explosions across the country. And even with that, after we collapsed the system, we had explosions in various places like in Jebba, Shiroro and Jos. So that is how pathetic it is.”
The TCN boss argued that the over $1bn investments in the transmission had not been adequately felt by power users because of the poor networks in the country’s electricity distribution arm.
He said, “The Nigerien people are not connected to our network. They are connected to the distribution network. So the Nigerien people in a way do not feel what we are doing. But the fact is that even our equipment is not guaranteed because there is no investment in the distribution network.
“You may ask how? We have 737 interfaces between us and the distribution companies. Out of these 737 interfaces, only 421 are protected on the distribution side. The remaining 316 are not protected or not fully protected. So you will see a 33kV breaker that will trip for about 30 times in a month.
“But in Europe or America, you will find a 33kV breaker that has been installed for like 10 years and it had not tripped for once. At the end of the day, we are having a lot of challenges in managing our network and our transformers are getting damaged. So the Discos must have the required investments in order to have the right protection on their side.”
Mohammed explained that managers of modern grids across the world focused more on frequency and spinning reserve management, not on distribution, but stressed that this was not the case in Nigeria.
“Now, if you go to a modern grid across the world, when you are managing frequency or spinning reserve, you are not supposed to be managing Discos. Rather, you are supposed to manage the tripping of lines or tripping from generators. But in Nigeria, management of Discos is now the problem. So we must have investments in the distribution network,” he stated.
Also, the National Secretary, National Electricity Consumers Advocacy Network, Mr Obong Eko, stated that NECAN had always called for increased investments in Nigeria’s distribution network.
He told our correspondent in Abuja that “the power distribution arm is the closest part of the sector to the final consumer.”
Eko added, “So if this arm of the sector does not have the required investment, then all the impact or positive strides recorded in other arms of the sector may not be felt as much by the final consumer.
“Therefore, you will agree with me that this, of course, is a good reason why the Discos must increase their investments, whether it is through recapitalisation or by whatever means that will ensure that the investment is done.”
But power distributors recently argued that the capital expenditure allowance provided for Discos by the Nigerian Electricity Regulatory Commission, as contained in the 2015 Multi-Year Tariff Order, was inconsistent with the present day realities in the sector.
The Discos’ submissions were further captured in a recent report on the challenges of Nigeria’s power sector that was put together by the French Agency for Development.
The AFD, however, observed that the Discos needed to carry out the massive investment.
It stated that the power firms needed to invest massively in Average Technical Commercial and Collection loss reduction plans including the roll-out of meters, increasing network reliability and network expansion, modernisation and new technologies, customer service improvement plans, internal transformation programmes, capacity building and training, etc.
The French agency encouraged power distributors to increase their transformation capacity at injection substations, redistribute loads connecting substations, get feeders and new transformers, and carry out metering and new connections.
On the concerns by the Discos as regards CAPEX issues, the report noted that there was inconsistency in the capital expenditure allowance provided for the firms in the regulations of the NERC.
The AFD stated that after assessing two projects for metering roll-out in two Discos, it was discovered that the average price for a single phase prepaid meter installed was between N32,700 and N55,000.
Also, the average price for a three-phase prepaid meter installed was between N74,600 and N83,600.
“The capital expenditure allowance limits one Disco to install only around 60,000 to 70,000 meters per year and nothing else in network rehabilitation/expansion, reliability and modernisation.
“Just to close the metering gap in Nigeria, the investment required would be close to $1bn, whereas the CAPEX allowance for all Discos per year is $120m,” the study stated.
It added, “On the other hand, the CAPEX allowed to TCN is over five times more than the one allowed to all Discos together.
“This is not consistent with having an overall perspective. In the meantime, Discos must draft their performance improvement plans to seize the total investment required by the distribution sector.”
Buhari signs AfCFTA agreement at AU Summit
President Muhammadu Buhari in Niamey, Niger Republic, signed the African Continental Free Trade Area (AfCFTA) agreement, making Nigeria the 53rd state on the continent to append its signature to the document.
Reports reaching Area News, indicated that the president signed the agreement at exactly 10.47 am local time
Buhari had delayed in signing the agreement, which entered into force May 30, 2019.
The delay was to give room for extensive consultations with stakeholders, culminating in the submission of the report by the Presidential Committee to Assess Impact and Readiness of Nigeria to join the free trade area.
The committee had recommended that Nigeria should sign the agreement which aims to boost intra-African trade.
In accepting the report as submitted, the President made it clear that Nigerian government would be seeking to include terms that engender the development of policies that promote African production, among other benefits.
President Buhari said: “Africa, therefore, needs not only a trade policy but also a continental manufacturing agenda.
“Our vision for intra-African trade is for the free movement of `made in Africa goods’. That is, goods and services made locally with dominant African content in terms of raw materials and value addition.
“If we allow unbridled imports to continue, it will dominate our trade. The implication of this is that coastal importing nations will prosper while landlocked nations will continue to suffer and depend on aid.’’
The AfCFTA is expected to be the world’s largest free trade area since the formation of the World Trade Organization, with a potential market of 1.2 billion people.
CIFI N20bn loans: Access Bank begins disbursement to creative sector
Access Bank has commenced disbursement of loans to beneficiaries in the entertainment industry, under the Creative Industry Financing Initiative of the Central Bank of Nigeria.
The bank disclosed this during a forum with some stakeholders in the entertainment industry in Lagos on Tuesday.
It said the first tranche of the CIFI loans worth N20bn, would be made easily accessible to the borrowers in the sector.
Bidemi Adeboye of Access Bank said stakeholders in the creative industries such as fashion, Information Technology, movie production, movie distribution, music and software engineering student could access the loans.
When all documentations were completed and the loans approved, the bank would ensure the beneficiaries got the funds within two weeks, he said.
He added, “The CBN wants to create jobs, develop local capacity, preserve foreign exchange and ensure empowerment in the entertainment industry.
“It is more interested in providing infrastructure funding such as film house, equipment, studio, auditorium, which will make it easier for the entertainers to operate at lower cost and be able to make profit.”
He explained that the loan had maximum interest rate of nine per cent per annum and a repayment period of up to 10 years.
According to him, those who would access the loans should come up with business plan or statement; they must be registered and should be doing what had economic benefits.
Chizoma Okoli of Access Bank said that the CIFI loan was introduced by the CBN to support the creative sector.
She said the bank decided to organise the forum with the stakeholders in the entertainment industry, to get more ideas from them on how best they could disburse the funds to them, and the documents they would need.
Music star, Oladapo Oyebanjo, popular known as D’banj, urged the bank to make the loans easily accessible as promised.
He said, “Most times when we apply for loans, it usually takes up to six months for us to get such. This will be a good development if we can access the loans within two weeks.”
Our economy is still fragile, MAN tells Buhari
The Manufacturers Association of Nigeria told President Muhammadu Buhari on Wednesday that the country’s economy remained “fragile”, much as it appreciated his commitment to perform better in his second term in office.
“It is clear that our economy is still fragile,” the President of MAN, Mr Mansur Ahmed, said when the National Council on Manufacturers Association of Nigeria visited Buhari at the Presidential Villa, Abuja.
Ahmed added, “With the Gross Domestic Product at 2.0 per cent and below the population growth rate, the clouds are still threatening and the task of driving the economy upwards is still enormous.
‘‘But, Your Excellency, we are encouraged by the very strong commitment you expressed only last week in your Democracy Day address.
‘‘You did say that in your second term, your administration will do, even more, not only to continue to drive the economy on the path of sustained growth but indeed to create a more inclusive and sustainable economy.”
He commended some of the administration’s policies, including measures introduced on the ease of doing business, “fight against corruption, focus on poverty reduction, job creation and inclusive growth as well as the launch of the Economic Recovery and Growth Plan.”
A statement by the President’s Special Adviser on Media and Publicity, Mr Femi Adesina, said Buhari used the visit to explain why Nigeria had yet to take a decision on the agreement establishing the African Continental Free Trade Area.
Buhari informed the MAN officials that an impact assessment committee set up by the government to guide it properly was working, adding that Nigeria’s decision on AfCFTA would be based on “national interest.”
The statement said, “The Presidential Steering Committee on the AfCFTA Impact and Readiness Assessment Committee was inaugurated on October 22, 2018, with the mandate to assess the extent to which Nigeria was ready to join the agreement, and what the impact of doing so would be.
“The Committee was initially given 12 weeks to conclude its assignment, after holding wide consultations with industry groups and stakeholders, including the MAN.”
The African Union Summit scheduled for July in Niamey, Niger Republic, is expected to address the AfCFTA.
The statement quoted Buhari as saying, ‘‘I don’t think Nigeria has the capacity to effectively supervise and to ensure that our colleagues in AU don’t allow their countries to be used to dump goods on us to the detriment of our young industries and our capacity to utilize foreign exchange for imported goods.”