By Chris Paul Otaigbe
Contrary to the understanding of Nigerians during the thick of the lockdown, that the Electricity Distribution Companies (DISCOs) would be instructed by the government to forgo two months electricity bill, it appears the Electricity Distribution Companies (DISCOs) are set for mass disconnection of power.
If the recent notice served one of the communities by an Electricity Distribution Company (Disco) is anything to go by, Nigerians may have to begin to prepare for mass disconnection of power.
While soliciting for the support of the particular Community, the DISCOs disabused the minds of its customers over the publicized two-month free electricity supposedly approved by the Federal Government as an incentive to Nigerians to stay at home in observance of the Lockdown order.
“Contrary to the news making the rounds that the Federal Government has approved the free supply of electricity, for two months, this was only a proposal by the National Assembly.” The notice stated.
Nigerians may have had their hopes dashed regarding their Bills for the months of the partial and full lockdown, as the notice by the Distribution companies reveals the belief of the rest of the DISCOs.
The Power Minister’s response finally put paid to any such dream by Electricity Consumers that the Federal Government would defray the bills for the two months of lockdown.
Nigeria Minister of Power, Alhaji Saleh Mamman dismissed the speculations that the federal government will pay two-month electricity for Nigerians as part of palliatives to citizens to cushion the effect of the lockdown due to the outbreak of COVID-19.
Mr. Mammam revealed this to BBC Hausa in an interview published on its twitter handle @bbchausa.
He said the matter had not been concluded yet, saying the government is looking at the possibility of getting the issues resolved. According to him, the first thing, the administration did when it declared the Lockdown policy, was to ensure a stable power supply for people to be more comfortable staying at home.
Explaining the privatization principles that power the electricity operations in the country, Mamman affirmed that the private firms involved in the generation and distribution process of power are in business to make money and not charity.
“If you talk about paying the electricity bill for citizens, the first question you ask is; who are those that fall under the category of beneficiaries?
You know we have over eighty million people who don’t have access to electricity in Nigeria and we have over two hundred million Nigerians. So, if you decided to pay a bill for one hundred and twenty million people, the question is; who are you paying for? Those privileged people in Maitama Victoria Island and other highbrow areas or those with companies and doing businesses and making profits while you abandoned the less privilege who don’t even have access to the electricity?” He asked.
For him, the free electricity bill will be paid with taxpayers’ money and the government may be inadvertently serving the interest of privileged Nigerians, while the less privilege and the vulnerable may lose out in the end.
He also admitted that it would be a very difficult task for the government to pay the two-month electricity bill for citizens, stressing that, putting the bill together will amount to over a hundred billion naira.
“Every month what we pay as electricity bill, I mean what the distribution company are paying, with the little support from government is a little above fifty billion naira monthly.” Said Mamman.
He disclosed that he had explained to members of the National assembly who initiated the idea of free electricity for Nigerian citizens, adding that, should the Legislators insist on getting the government to pay, they may have to come up with ideas on how to go about the action.
The minister’s attitude to the initiative by the National Assembly is very unfortunate and speaks to the fact that the Federal Government does not seem to recognize and appreciate the responsibility that comes with asking citizens to suspend their livelihoods and stay at home for more than one day.
His argument, which is a throwback to the pro-fuel subsidy removal rhetoric, falls in the face of common sense and logic. The tens of millions of Nigerians who have access to electricity include both the rich and the poor, the privileged and the vulnerable.
Therefore, if you choose to shirk your obligation to the people in times of crisis, on the excuse that you believe only the Haves, among the many Have-nots, would be the beneficiaries of the freebies, then you are only expressing the thought of a lazy thinker. Worse still, the Minister’s position is escapist, in the sense that it provides an annoyingly lame excuse for the government to deny Nigerians of a needed palliative measure.
But then, Nigerians may not be exactly be surprised at the Minster’s response because they are used to the many failed promises of government concerning the provision of Power in the country.
Successive Governments’ failed promises on the provision of power to the people are legion and documented. The reason behind the many unfulfilled dreams of the Power sector can only be attributed to corruption.
One of such unfulfilled pledges is the generation, transmission and distribution of at least 20,000MW of electricity within four years and increasing to 50,000MW with a view to achieving 24/7 uninterrupted power supply within 10 years.
Former President Olusegun Obasanjo said before he left, Nigeria was able to generate 4,000MW of electricity.
“We had laid out a plan to increase to 10,000MW in subsequent years. When Jonathan came, they boasted that they will generate 40,000MW in 4 years. I said what! 40,000MW? Do these people even know what they are talking about? I thought I should intervene by reminding them that I left a plan that could generate 10,000MW which is more realistic. Then I sent someone, who I won’t disclose, to Jonathan. I said go and lecture this man. Let him know what is possible and what is not, so they don’t keep deceiving him. He still didn’t hear. In the end, he failed Nigerians on that promise and others he made. How many megawatts did Nigeria have when he left office? It was actually lower if you compare to what I left in 2007.” He said.
Punch’s edition of August 11, 2011, story reported former Minister of Power, Professor Barth Nnaji saying the government had the capacity to generate 6,000 megawatts but was currently generating 3000MW. In addition, ”the Federal Government has said it is determined to improve power supply by taking the increasing power generation from the current 3,000MW to 7,200MW by December this year [2011].
“The Permanent Secretary (Perm Sec), Ministry of Petroleum Resources, Mr Sheik Goni, in the same report, added that government had set a target of increasing power generation to 40,000MW by the year 2020.
The Perm Sec further spoke of plans put in place to raise this capacity to 7,220MW by the end of 2011 and 14,018MW by the last quarter of 2013.”
ThisDay, in the first page of its August 14, 2011 edition, reported “Power Ministry Targets 5,000MW by December”
”Jonathan: Uninterrupted power supply possible before 2015”. NATION, August 17, 2011 (page. 11.
In the report, Jonathan said his administration remains committed to the attainment of uninterrupted power supply in the country before the end of his tenure in 2015.
Professor Nnaji, in a paper titled” “Nigeria: A Miracle Waiting to Happen”, said, “Nigeria needs $100 billion investment to achieve 40,000MW in the year 2020.” This was followed by “Show the light, and the people will find the way”, by Bart Nnaji. NATION, December 1, 2011, p. 22.
The Road Map [launched by Jonathan] provides ways and means to make Nigeria achieve 40,000MW within one decade so that Nigeria could become one of the world’s 20 largest economies by 2020.
On December 31, 2011, neither the 7000MW nor the 5000MW milestone had been reached.
Having failed woefully to deliver on the promises made for 2011, Jonathan and his team marched into 2012 to make more promises and to shift one goal post.
Professor Nnaji, on June 12, 2012, announced the country would begin to generate over 5,000MW of electricity at a lecture at the Institute for Security Studies in Abuja. This was reported by Punch in a piece titled, “Electricity generation to hit 5,500MW this year.”
At the Lecture, the Professor and former Minister told his audience that there will be a remarkable improvement in power supply across the nation, but made no mention of the promise of 7000MW by December 2011. Two months after, the Nation Newspaper’s edition of August 8, 2012, reported that “Power supply peaks at 4237MW.”
In the report released by Socio-Economic Rights and Accountability Project (SERAP) at the Westown Hotels, Lagos, on Wednesday, also estimated that the “financial loss to Nigeria from corruption in the electricity sector” may further reach N20tn in the next 10 years.
Published in the August 9, 2017 edition of the Punch, in a report titled; Electricity: How N11tn was squandered under Obasanjo, Yar’Adua, Jonathan – SERAP, the anti-corruption NGO stated that at least N11tn meant for the provision of adequate electricity for Nigerians was squandered under ex-presidents Olusegun Obasanjo, Umaru Musa Yar’Adua and Goodluck Jonathan, a report alleged on Wednesday, August 9, 2017.
It said the total estimated financial loss to Nigeria from corruption in the electricity sector starting from the return to democracy in 1999 to 2017, was over N11tn. This represented public funds, private equity and social investment (or divestments) in the power sector. “It is estimated that it may reach over N20tn in the next decade given the rate of Government investment and funding in the power sector amidst dwindling fortune and recurrent revenue shortfalls.” The paper reported.
According to the SERAP report, Obasanjo’s administration spent $10bn on Nigeria Independent Power Project (NIPP) with no results in terms of increase in power generation. “$13,278,937,409.94 was expended on the power sector in eight years while unfunded commitments amounted to $12bn.” Reported Punch.
“The Federal Government then budgeted a whopping N16bn for the various reforms under Power Minister, Liyel Imoke (2003 to 2007) which went down the drains as it failed to generate the needed amount of electricity or meet the set goals. Imoke was alleged to have personally collected the sum of $7.8m for the execution of the contract for the construction of the Jos-Yola Transmission Line, which was never executed. There were documented/reported allegations of corruption against Imoke that fizzled-out shortly thereafter.
To escape close to two decades of failed plans and promises by his predecessors, President Muhammadu Buhari came with his own plans.
Obasanjo administration’s 10,000MW target by 2007 and Jonathan’s 24,961MW by 2019, promises to fix electricity are common; and the plan sold to Nigeria, a country of about 200 million people, while under Mr Buhari by Siemens is the current card on the table of power promises.
In July last year, Buhari announced a new plan with German tech giant Siemens AG, to reverse the curse that is the electricity supply in the country where about half of the population lacks grid access, and the rest, long accustomed to blackouts, despite trillions of naira “investments” in decades and abundant energy potential.
The three-phased plan designed by the German company ultimately targets 25,000 megawatts (MW) of operational capacity long term from 7,000MW and 11,000MW to be achieved by 2021 and 2023, respectively, through the first two phases.
The ultimate target is roughly at par with the country’s current peak demand of nearly 26,000MW.
Although, Nigeria’s current installed electricity generation capacity, according to the System Operator, is 12,910MW, less than the 8,000MW available, while less than 4,000MW reaches the final consumers on average, which is about one-third of what Singapore delivers to 5.6 million people.
This operational imbalance is a result of infrastructural bottlenecks between the transmission and distribution services within the mostly privatized industry.
The German firm noted in its proposal, that eliminating critical tailbacks within the transmission and distribution grid is necessary to allow free flow of electricity.
This includes rehabilitating defective connections of key substations to the existing control centre in order to improve the operation of the transmission network and to unlock its potential.
Although, fixing electricity has remained a seemingly intractable challenge, a sort of voodoo, in Nigeria, the awareness of darkness as a barrier to development is not lost on both the government and the society, including young people involved in small size businesses such as fashion designing or digital marketing and those in bigger businesses like high-margin manufacturing.
In his speech, on July 22, to the Siemens’ chief executive Joe Kaeser, who flew to Abuja to sign the deal with Nigeria, Buhari said his goal is simply to deliver electricity to Nigerian businesses and homes. “My challenge to Siemens, our partner investors in the Distribution Companies, the Transmission Company of Nigeria and the Electricity Regulator is to work hard to achieve 7,000 megawatts of reliable power supply by 2021 and 11,000 megawatts by 2023 – in phases 1 and 2 respectively.” He said.
The Siemens plan covers the generation, though, mostly at the last phase, transmission, distribution, smart metering and supervisory control and data acquisition (SCADA), and knowledge transfer.
For the first phase, the focus would be on “essential and “quick-win” measures to increase the system’s end-to-end operational capacity to 7 GW” by 2021.
Its approach to the phase one projects would be “swift supply and start up-gradation for immediate bottleneck clearance.”
In the commercial proposal for the first phase, transmission assets would cost 330 million euros for Engineering, Procurement, Erection and Commissioning of 11 containerized GIS Substations, 10 mobile substations, some additional transformers and 140 KM transmission line, which it says is out of its scope.
The distribution assets include supply of products and systems for 14 stations; upgrade of 26 existing substations; EPC of three mobile substations would cost 250 million euros. Then, the company proposes 6,804 million euros for power system simulation and system development studies for 25,000MW. However, it says prices are “to be determined” for grid automation and national (smart) metering infrastructure,
With the smart metering solution, Siemens says “government and private institutions such as MAPs, DISCOs, NBET (Nigerian Bulk Electricity Trading company), NERC (Nigerian Electricity Regulatory Commission), TCN and GENCO’s can gain valuable insight in load consumption data so that strategic planning is made easier and more accurate, reducing unnecessary costs for grid upgrading and new infrastructure.
The second phase includes distribution of SCADA to DISCOs; 40MW power project dedicated to Abuja; North East Transmission Infrastructure projects 2 (NTEP 2 – 830 KM of HV lines; 11 132/33 kV substations; and six 132/33 kV substations extensions), and gas processing projects to ensure fuel availability for the GENCOs.
According to the Siemens plan, there are no estimated prices for phase two projects except the Abuja power project which is estimated to $770-$815 per kilowatt.
Unlike the first two phases, the third phase is not time-bound. The objective of this phase, in the plan, is to increase the grid capacity from 11GW (expected to be realized from phases 1 and 2) to 25 GW.
The third phase will focus will on additional Transmission and Distribution assets upgrade based on network studies and load demand coupled with Large Scale Power Projects.
Such power projects will include four plants to be sited in Abuja: +1350MW; Kaduna: 1350MW; Kano: +1350MW; and Lagos (Agura): +450MW. The company further said additional capacities by new independent power producers are required to close the gap to 25,000MW.
The whole plan sounds nice and looks great on paper. But will its reality come the way of others before it? Should Nigerians begin to celebrate?
The Buhari optimism about this German option may have been propelled by the success of Siemens in Egypt, where the company delivered a mega 14,400MW power project in 27 months.
The realities, however, differ: while power service in Egypt is public sector-led, it is not so in Nigeria. For the latter, analysts and operators, then, have expressed worries about the Siemens’ plan, which is largely a government agenda, with a heavily private sector-led industry.
Although Siemens stated that the TCN and the DISCOs participated in the discussions leading to the proposal, a DISCO Insider said the companies were merely dragged before Siemens by senior Presidency officials.
In other words, current Actors in the Nigerian electricity industry did not enter the Siemens plan voluntarily. They were enlisted, by the Federal Government, to participate in the process.
Siemens built the Azura plant in Edo, a 461MW project, it started in 2016 and delivered in 2018. But an Azura top Official (name withheld) said they were not part of the Siemens plan with the government.
If the people, section or subsector of the industry talking with Siemens are not known to virtually all the major players in the industry, who should know goings-on in the sector, who, then, is Siemens talking to or planning with?
Yet, to bring the country’s operating capacity to the planned 7,000MW and 11,000MW by 2021 and 2023, respectively, the generation companies have to activate idle infrastructure to produce more energy.
Indications are that the lack of broad-based engagement, that involves the private sector, leading the industry, may affect the success of the Siemens plant.
Officials conversant with the Siemens project said the Late Chief of Staff to the President, Abba Kyari, chiefly controls the process, while most of the discussion with other parties had been within “his command.” Now, Abba Kyari is dead and gone, leaving a vacuum on this particular assignment.
Even if Siemens successfully delivers the projects, Nigeria’s electricity worries are still not over, as just about 40 percent of the country’s population has access to grid electricity to date. Several communities in Nigeria’s capital Abuja are among those yet to be connected to grid electricity.
Currently, the coronavirus pandemic has taken over the world, shutting down economies, disrupting and damaging projects. From the point of view of Covid-19, it does not look like serious business activities would have picked up before the end of the year. This obviously would have impaired the 2021 deliverable of the Siemens project.
Between now and 2023, the Buhari administration has less than three years to deliver on its promises, particularly on the provision of power, before he leaves the building.
Unfortunately, in this Covid-19 era, the dynamics, the usually uncreative, and abysmally slow pace characteristic of Nigerian government approach to economically viable projects, is made worse by corruption. Clearly, this may make the Buhari-Siemens power plan, another, in the basket of unfulfilled promises regarding electricity supply in Nigeria.
