·As Osinbajo commissions 240mw Afam 3 plant able to supply power to 2m homes
By Ignatius Chukwu
The vice president, Prof Yemi Osinbajo, representing President Muhammadu Buhari at the commissioning of Afam 3 Clinical Power Plant in Oyigbo, Rivers State Tuesday, May 9, 2023, said electricity subsidy will end by end of 2023.
The VP, who is the chairman of the chairman of the National Council of Privatisation (NCP), revealed that in 2019, electricity subsidies reached a peak of N584Bn. He said this was in an environment that became so burdensome for the Nigerian government fiscal position.
Prof Osinbajo stated that the introduction of the service-based tariff, the payment disciple initiative for the sector jointly organized by National Electricity Regulatory Council (NERC) and the Central Bank of Nigeria (CBN) and the introduction of the National Mass Metering Programme (NMMP) all led to the doubling of the market correction in the Nigerian electricity supply industry from N40Bn in 2012 to N80Bn per month in the first quarter of 2023.
In 2022, he went on, five non-performing Discos were brought into restructuring programme that has led to a N10Bn per month reduction in shortfalls. This means deficit on them has reduced by N10Bn monthly.
The vice president, who stood in for President Buhari, said: “If this trajectory continues, it means that the electricity supply industry will attain self-sufficiency by end of 2023. It will be able to resource itself and pay for itself.”
Listing other positive developments in the sector, Osinbajo pointed at the Afam 3 commissioning as an important part of the evolving story of Nigeria story of aspirations to bring power to millions in their homes and factories and businesses.
He said it brings very sharp relief the importance of private capital in building up capacity along the power value chain. “A major weakness of the privatisation process which started in 2005/6 was and has been inadequacy of private investments and new cash injections.
“But indigenous companies such as Transcorp are making this 100 per cent of this 166 mw investment referred to as the Afam Genco. This is a N105Bn investment as you heard already.
“The National Council on Privatisation (NCP) formally delisted Transcorp Ugheli from routine monitoring making the company fully certified as a concessionee. I must say the past two days belongs to Transcorp Power because at the same meeting of the NCP, the Council approved Transcorp Power Consortium as the preferred bidder of the Abuja Disco.”
He said the complete story is that in the past few years, Nigeria has seen new money in the power value chain. “These transactions include Quest Plc that became core investor in Disco in 2020. The transaction is worth N19Bn.
“Last month, the NCP approved the 30-year concession of Zungeru Hydro Power plant at $70m per year, and over all the Nigeria electricity supply industry is getting better.
“Since 2020, the Nig electricity regulatory commission has executed all its annual review processes without fail. This is the major diff from the past.”
Osinbajo mentioned some challenges still ahead in the power sector and proffered solutions.
Minister commends Tony Elumelu
Speaking, the Minister of Power represented by the permanent secretary, Temitope Fashedemi, commended Tony Elumelu, chairman of Transcorp group, for driving investment in the Nigeria power sector across the value chain. “Your team has proven to be the best in the sector so far.
“The new structuring that made this project a reality is something that should be commended and replicated wherever possible. This notable collaboration has ensured that we are commissioning Afam 3 Power project today with the capacity to inject additional 240 mw electricity into the national grid. This is commendable and will certainly improve the electricity supply to the nation along with the attendant growth of our economy and gross domestic product (GDP).
