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2011 Annual Report of the Federal Ministry of Power
FEDERAL MINISTRY OF POWER (FMP) Federal Secretariat, Abuja
2011 ANNUAL REPORT
Federal Ministry of Power Federal Secretariat Phase I, Annex III 4th and 5th Floors Shehu Shagari Way
Abuja. July, 2012
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2
TABLE OF CONTENT
FOREWARD…………………………………………………………………………..
i. Introduction…………………………………………………………………..
ii. Mandate………………………………………………………………………..
iii. Vision and Mission Statements…………………………………………..
iv. Functions of the Ministry…………………………………………………..
v. Organizational Structure…………………………………………………..
vi. Agencies under the Ministry………………………………………………
vii. Overview of the Power Sector……………………………………………
viii. Challenges in the Nigerian Power Sector……………………………..
ix. Strategic Goals / Plans…………………………………………………….
x. Major Achievements in the Power Sector…………………………….
xi. Investment Opportunities………………………………………………..
xii. Conclusion…………………………………………………………………….
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FOREWORD:
President Goodluck Jonathan, GCFR, in his May 2011 inauguration speech
underscored the importance his Administration attaches to transforming the
Power Sector to provide sustainable electricity supply to the Nigerian populace.
He stated “To drive our overall economic vision, the Power Sector is at
the heart of our industrialization strategy. I call on all stakeholders to
cooperate with my Administration to ensure success of the reforms”
Arising from Mr. President‟s comment and challenge to the stakeholders in the
Power Sector, it is imperative that there has to be a paradigm shift in people‟s
minds and actions in order to improve service delivery in the sector. Every
stakeholder should therefore understand the challenges before us in terms of the
present industry position and demands and the short, medium and long term
goals. It has become public knowledge that the situation today in the Power
Sector is such that only 40% of the nation‟s populations has access to electricity
supply and in order to achieve the Nigerian Vision 20: 2020 goals, the
Distribution and Transmission networks have to grow at the rate of at least 16%
per year, rather than the current rate which is less than 1% growth rate.
We are also undoubtedly faced with the challenges of obsolete equipment, high
operating costs, high energy losses, inadequate expertise, vertically integrated
government – owned monopoly and continue increase in an already highly
suppressed demand, to mention a few. As a result of these and other challenges,
the government new drive is to proactively disaggregate the industry, develop
the market through strong regulations and cost reflective tariffs and most
importantly, utilize the private sector to lead and finance the initiative. In order
for this new drive to succeed and thrive, a series of interlocking reforms of the
current service delivery model is required to attract the large amount of
investment needed. Specifically, the ownership and control of the Power Sector
needs to move from largely Federal Government owned to modify private sector
owned, particularly in power generation and distribution. Some critical steps
need to be addressed to serve as the levers for change such as labour
agreement, a major tariff change and a bulk trader to serve as interim central
purchaser and principal contracting authority of power.
4
Underlying the success of the Power Sector Reform is the transformation of the
ownership and control of the Nigerian Electricity Sector. This will require
massive undertaking and supporting capital from the Federal Government to
encourage private sector involvement. However, government investment and
post reform guarantee required is not from a bottomless pit but is bounded, time
limited and crucial. The Cumulative Cost of delaying the required investment –
in terms of Cost GDP will be more than 10 times higher than the actual cost of
incurring the contingent liability. There are already key achievements such as the
stabilization of power generation to over 3500MW and a sharp reduction in
system collapses. Similarly, key reforms policy concern, investors road shows to
the pre-qualification of privatization bidders and many more. The 2011 Annual
Report of the Federal Ministry of Power is predicated on gains of the Reforms in
line with the Roadmap for the Power Sector Reforms of 2010. We are therefore
committed to implementing the reforms in a progressive manner in order to
guarantee the overall socio – economic development of the nation.
Professor Bart Nnaji, CFR Honourable Minister of Power
5
Preamble,
To write a preamble to a document of this magnitude with a view to
satisfying all the stakeholders in the Power Sector is humanly impossible.
However, the power sector, as we see it today, wants to get on, do more and
influence more, day - in - day - out. Thus, no stakeholder shall be left out, we
must contribute our quota for the sustainable development of the Sector.
It has been stated elsewhere that since 2002, when the Federal
Government of Nigeria adopted the National Electric Power Policy, the
comprehensive reform and reengineering of the electricity supply industry has
been central to the thinking of government. That Policy outlined, among others,
the following key objectives:-
(i) to ensure that the Power Sector attracts private investment;
(ii) to embark on a holistic principle of privatization in the Sector;
(iii) to establish an effective regulatory framework for the Power Sector;
(iv) to review and update electricity laws in line with international best
practice, etc.
No wonder, this was followed by enacting the Electric Power Sector Reform Act
in March, 2005. This Act gives effect to these policy principles which is, in part,
the subject-matter of the 2011 Annual Report. The new market development
hinges on cost reflective tariff and the presence of a strong Regulator. After all,
Prof. Barth Nnaji has ages ago observed, in his usual telling language, that “No
cost reflective tariff – No Power! And No Power – No future”. Period!
It is noted with satisfaction that the development in the Sector is going on
as expected. The Roadmap is on course. The Bulk Trader is in place. The
Market Operator is brought into existence. The Rural Electrification Agency
(REA) is back on to the scene, this time with full force. All these can be read
from the 2011 Annual Report
It remains only to be said and, to be said clearly, that my only happiness is
for the zeal and effort put into the report to broaden the nation‟s understanding
of our generation‟s opportunity to end extreme darkness in Nigeria. Going
through the report, one sees thoughts too big even for our big heads but,
nevertheless, we can make it, after all, other nations did. Clearly then, our 2011
Annual Report is not talking about hunger, diseases, squalor, poverty reduction
etc., but wealth creation via investment – great ideas, it‟s a challenge that is
6
hard to ignore. And when experts start talking like that perhaps we should listen
and, then act accordingly.
Happy reading.
A. J, Muhammed, mda.
Director (PRS)
7
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9
I INTRODUCTION:
1.1 The development of any nation is primarily anchored on effective
generation and efficient distribution of electricity supply. For Nigeria as a
developing nation, ambitious to transform into one of the top 20 economies in
the world by 2020, sustainable power supply to drive all the critical sectors of the
economy becomes imperative and requires the cooperation and involvement of
all stakeholders. The Power Sector, undoubtedly, has witnessed long history of
neglect in terms of private sector involvement and investment. It has become an
open secret that government alone cannot bear the huge cost of salvaging the
sector, which will require over US$3.5 Billion annually. However, over the past
years, there was significant progress in attracting private sector investment in
the sector and positive indication of more in the coming years, a development
that is consistent with the present Administration‟s commitment to the
implementation of its Transformation Agenda.
II MANDATE:
2.1 The Federal Ministry of Power is the Policy making arm of the Federal
Government on matters dealing with the provision of electricity in the country.
The Ministry is mandated to develop and facilitate the implementation of policies
for the provision of adequate and reliable power supply to drive the socio –
economic development of the Nation. In discharging the mandate, the Ministry is
guided by the provisions of the National Electric Power Policy (NEPP) of 2001,
the Electric Power Sector Reforms (EPSR) Act of 2005 and the Roadmap for
Power Sector Reform of August, 2010 and the Transformation Agenda of the
present Administration on power.
III VISION AND MISSION STATEMENTS
3.1 Vision Statement:
A robust and sustainable power sector that fully supports the socio –
economic needs of the Nation and contributes to the emergence of Nigeria as
one of the top twenty economies of the world by the Year 2020.
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3.2 Mission Statement:
To provide the Nation with adequate and reliable power supply by
implementing generation, transmission and distribution projects in the sector and
facilitating the emergence of a private sector led competitive and efficient electric
power industry.
IV FUNCTIONS OF THE MINISTRY
4.1 The responsibilities of the Federal Ministry of Power are as follows:
Initiating and formulating broad policies and programmes on the
development of the power sector (electricity) in general;
Initiating concessions in the power sector of the economy;
Licensing of electric generating sets of 1MW capacity and below and
electrical contractors;
Conducting investigation on electrical accidents and to ensure safety in
the electricity industry in Nigeria;
Conducting statutory tests and certification of electric poles (concrete,
wooden, steel etc) and other major electrical materials before they are
used on the grid and networks in Nigeria;
Implementing Renewable Energy progammes/initiatives (Solar, Wind,
Biomass, Small Hydro etc);
Coordinating activities of power sector;
Handling policy matters relating to research and development in the
Power Sector;
Promoting the development of hydro power plants through public
private partnership (PPP);
Participating in bilateral and multilateral relations affecting the power
sector; and
Facilitating the overall coordination of the activities of the Parastatals
under its supervision.
V ORGANISATIONAL STRUCTURE:
5.1 The Honourable Minister is the Chief Executive of the Ministry, while the
Permanent Secretary is the Accounting Officer supported by seven (7)
Departments and 5 Units, namely:
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ORGANOGRAM OF THE MINISTRY OF POWER
a) Power Department
The Power Department is responsible for the initiation of policy matters in power
sector (Generation, Transmission and Distribution) and ensuring that the sectoral
policy decisions of government are implemented by the agencies of Government
under the supervision of the Ministry. The Department is responsible for the
development and supervision of some of the major publicly funded power plant
projects. It is also responsible for the supervision and monitoring of projects
under the TCN and the finalization of the privatization programme of the
successor companies of the defunct PHCN in collaboration with the Bureau of
Public Enterprises (BPE). The Department has staff strength of 25 officers,
consisting 15 engineers and 10 administrative and support staff
Honourable
Minister
Honourable
Minister of State
Permanent
Secretary
D-
Power
DPRS DEIS DISD DF&A D,PROC DHRM
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The Department under review in 2011 played strategic roles in line with the
present administration resolve and determination to increase power generation
capacity to 5000MW, reinforce the transmission grid system and ensure reliable
and efficient distribution network under the National vision 20: 20: 20 set goals
and objectives.
Overview/Achievement of the Department’s Activities in 2011.
The Department‟s activities in 2011 focused on the execution of the following
projects and programs:
i. 215MW dual fired (LPFO/Natural Gas) Kaduna Power Plant Project;
ii. Development of 10MW Wind Farm Project in Katsina State;
iii. Mambilla Hydroelectric Power Project;
iv. Zungeru Hydroelectric Power Project;
v. Coal to Power Project;
vi. Other Sources of funding for Power Sector;
vii. Power Sector Reform Issues;
215MW Kaduna Power Plant Project
As part of the intervention towards resolving the acute shortage of electric power
across the country and in consideration of the persistent challenge of gas supply
to existing thermal power stations, the Ministry adopted a strategy of exploiting
alternative fuels for power generation. The primary fuel would be initially Low
Pour Fuel Oil (LPFO) but the plant is expected to switch to natural gas when the
necessary transmission infrastructure is eventually extended to Kaduna. The
selection of Kaduna for the project was based on the availability of Low Pour
Fuel Oil (LPFO) from the Kaduna refinery and the technical imperative of
balancing the national transmission grid.
A contract for the construction of a dual-fired (LPFO/Gas) power plant with an
installed capacity of 215MW (ISO) has been awarded in favour of a consortium
of GE (NuovoPignone)/Rockson Engineering Ltd with a completion period of 36
months. The contract sum is €135,840,665.71 plus N6,066,626,449.24. The
current status of implementation of the project is as follows as at December 31,
2011:
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Engineering - 68%
Procurement - 60%
Construction - 49%
Overall - 59%
The projected completion date is put at December, 2013 with the first firing for
January 2013. The letters of Credit on off-shore procurement for both GE Nuovo
Pignone / Rockson Engineering Ltd have been fully funded to the tune of
135,840,665.71 Euros. It is note worthy to report that Messrs GE Nuovo
Pignonehave already delivered to Onne Port all the eights units each of gas
turbines & generators and the balance of plants has commenced the installation
/ erection works on site. However, the on-site is behind scheduled due to the
security concerns in Kaduna.
One of the challenges affecting the progress of work on the project is the on-
going rehabilitation works of the road selected to transport the heavy equipment
from Onne Port to the Kaduna Plant site. Other challenges are variations on the
contract sum arising from change in project site from an old PHCN facility to a
green field site. The VORS is being reviewed by the Project Consultant Messrs
Steag Encoted West Africa Ltd.
10MW Katsina Wind Project
In line with the Government policy of promoting renewable energy, a wind map
for the entire country has been developed, indicating numerous viable sites for
the deployment of wind turbines for power generation. A contract for the
construction of a 10MW Wind Farm at Katsina was awarded by the Federal
Government in favour of MessrsVergnet SA of France at a contract sum of
€18,500,000 plus N494,020,000 with a completion period of 24 months. The
configuration consists of 37No. 275kW wind turbine generators mounted at a
height of 55m on an inclinable tower. The Project Consultant is Terrawatt
GmbH/O. T. Otis Engineering. The project has so far been fully funded and
project implementation has progressed very smoothly despite a few challenges
relating to customs clearance at the ports. The Ministry is currently evaluating
the procurement of contractors for the erection of a 33kV transmission line/sub-
station and wire mesh fencing of the project site.
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Mambilla Hydroelectric Power Project
The Mambilla HEPP is one of the major projects expected to significantly to
increase the security of supply of power to the country. The project is planned to
consist of a 2,600MW base load hydroelectric power to be implemented over a
period of 5 years. Lahmeyer International of Germany has been engaged to
undertake a detailed review of the feasibility study on the project and to prepare
a bankable report and tender documents for eventual implementation. The
completion of the report is associated with the finalization of the following
projects.
Route Surveys for Transmission lines and sub-station
Geotechnical Investigation of the project site;
Orthophoto-mapping of the area, including the transmission corridor;
Environmental and social impact assessment.
Route Surveys for Transmission lines and sub-station
Other essential studies towards the realization of the Mambilla project are the
definition of the HV transmission line for the evacuation of the generated power.
In this respect, the procurement process for the engagement of a consultant that
would undertake the Line Route Survey of the transmission corridor line routing
has been concluded. The report is expected to provide the base data for the
design of the High Voltage lines from the Abong power house to Abong and
Makurdi.
Transmission Line Route Survey: Current status of the project
Two Corridors for Transmission Lines(Corridor 1 – Abong to Makurdi, 4 x
500KV DC and Corridor 2 – Abong to Jalingo, 1 x 330KV DC)
Survey Exercise Completed December 2009
Orthophoto Mapping
The Federal Government has approved a contract for the detailed aerial mapping
of the Mambilla Power Project footprint in favour of Messrs Maps Geosystems in
December 2008 with a completion period of 9 months. The Contractor could not
mobilize before the end of February 2009 due to delays in securing flight permits
15
into one of the neighbouring countries. The aerial survey commenced in
November 2009 and is scheduled to be completed by December 2011
OrthoPhoto Mapping: Current status of the project
Aerial photography completed in December 2009
Results evaluated and accepted
Ground survey exercise completed August 2010
Production of Orthophotos, Digital Elevation Models in 3D and aerial
triangulation in progress
Stereo Vision / editing takes time because of the thick layer of vegetation
at the Power house area.
Expected submission date for report and maps is December, 2011
Environmental and Social Impact Assessment (EIA) : Current status of the
project
The three EIA‟s are in advance stage of progress
The draft final report for the main EIA will has been submitted for
regulatory review
The EIAs for Transmission line routes are also on going. The 1st draft EIAs
has been submitted for in-house review.
The final reports of all the EIAs after regulatory approval by FMENV are
expected in December 2011.
Geotechnical and geodetic surveys: Current status of the project
Geotechnical survey component Report submitted
Field confirmation inspection carried out in August 2010
Result required drilling at the POWER House to a depth of 350-400m and
few other areas
Outstanding Geotechnical Investigation to be carried out by selective
procurement process
A “NO Objection” for procurement for the outstanding Geotechnical
Investigation granted by BPP of either Trevi, Impregillo N. L or Fugro Nig.
Ltd.
The procurement process and completion of the investigation would be
about six months; and
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RFP for the procurement at about 90% completed.
Review of Feasibility and preparation of Bankable Report
MessrsLahmeyer International has since 2006 reviewed the feasibility
Study Report
And has submitted a draft bankable Feasibility Report to the Ministry
The finalization of the study is currently constrained by the non-completion
of the geotechnical investigation of some areas of the project sites
Preparation of the detailed design and Project management
A project consultant has been procured for detail design, supervision and
Project Management
The contract sum is $37, 220, 068.72
The addendum to the contract is being finalized in the Ministry for signing
A contract for the Lot I (Civil/Hydraulic Steel Structures) of the 2,600MW
Mambilla Hydroelectric project was awarded in April 2007 by the Federal
Government, in favour of Messrs CGGC/CGC Ltd, in the sum of US$1.46billion.
The source of funding envisaged at the time of award was a combination of an
Exim Bank of China loan of US$1billion and funds from the Excess Crude Savings
Account. A tender for the electro-mechanical component was also floated in 2007
but the bids are yet to be opened. However, the contract with CGGC/CGC Ltd,
though executed, was subsequently revoked by the Federal Government on the
advice of the Ministry of Justice.
A draft bankable Feasibility Report by Lahmeyer International has since been
submitted to the Ministry but the finalisation of the study is currently constrained
by the non-completion of the geotechnical investigation of some sections of the
project site. The challenge in completing the study has been a lack of access to
the project area, particularly the proposed site of the underground power house.
In order to complete the geotechnical investigation, a request has been
submitted to the Bureau of Public Procurement seeking “No Objection” to obtain
Technical/Commercial offers based on selective tendering strategy. The short-
listed companies are Impregilo Nigeria Ltd and Fugro Nigeria Ltd.
A contract has also been awarded by the Federal Government in favour of
Messrs Coyne etBellier (Tracterbel Engineering)/DeCrown/Wadsco for the
17
detailed Engineering and Project Management of the Mambilla Hydroelectric
Power project with a completion period of 63 months. The contract sum is
US$37,220,068.72. The Contract Agreement has already been executed by the
Ministry and the contractor has already work on the project. However, on
account of a number of inaccuracies noted in the executed Agreement, an
Addendum to the contract is currently under consideration for the purpose of
remedying the situation.
The Mambilla project is currently a subject of litigation instituted by Messrs
Sunrise Power & Transmission Ltd. The issue in dispute is a claim by the
plaintiffs that a subsisting contract for the construction of the Mambilla
Hydroelectric Power Project on the basis of a BOT concession exists in their
favour. However, the Vice President has constituted a Committee under the
Chairmanship of the Attorney General/Minister of Justice for the resolution of all
legal encumbrances on the Mambilla project. The Committee has not met since
its inaugural meeting early this year.
The estimated cost of the Mambilla project is circa US$3billion including
transmission infrastructure. With the commencement of the detailed design
aspect of the project development, it is important to firm up on the structure of
the project finance.
Zungeru Hydroelectric Power Project
A contract for the construction of the 950MW Zungeru Hydroelectric Power
project was awarded in favour of Messrs China National Electric Equipment
Corporation (CNEEC) by the Federal Government in April 2007 with funding to be
sourced from the Excess Crude Savings Account. However, the contract was
stepped on account of the recommendations made in the updated Feasibility
Report on the project submitted by Messrs Coyne etBellier. The report
recommended that, as a consequence of declining hydrology, the optimal plant
capacity should be 525MW with the possibility of future expansion to 700MW.
Messrs Coyne etBellier has been retained by the Ministry for the conduct of due
diligence on Messrs CNEEC, preparation of EPC tender documents, evaluation of
revised offer and preparation of Contract Agreement. All the technical and
commercial negotiations have been concluded culminating in the issuance of Due
18
Process Certificate of No Objection in the sum of US$944,309,253.82 plus
N44,007,398,398 for the revised scope of the project.
The project is yet to be presented to the Federal Executive Council for
consideration due to an imperative to firm on the source of funding for the
project. Noting that a sum of about N87.6 billion from ECSA has been available
to the Ministry for the development of Mambilla/Zungeru since 2007, a proposal
has been made to the President to fund the project based on a debt:equity ratio
of 1:4. The debt portion is to be secured from the Exim Bank of China while the
equity is to be funded from the aforementioned ECSA funds. The financing model
is based on a financial analysis of the project indicating that revenue streams
from the completed project would be adequate to cover the prepayment
obligations over a period of 18 – 20 years.
We wish to report that ongoing discussions between the Federal Ministry of
Finance and the Exim Bank of China have recommended a loan of US$1 billion
for the Zungeru project.
Coal to Power
One of the goals of the Federal Government in the current development effort of
the power sector is the enhancement of security of supply of electricity through
the diversification of the fuel mix. In this respect, it is planned that the nation‟s
vast resource of coal and hydropower potential would be fully exploited for the
socio-economic development of the country.
Pursuant to the above objective, an Inter-Ministerial Committee on Coal to Power
was established with a mandate to develop an Action Plan for the actualization of
coal-fired power plants. The membership of the Committee was drawn from the
following MDAs:
(i) Ministry of Mines and Steel Development;
(ii) Ministry of Power;
(iii) Ministry of Water Resources;
(iv) Ministry of Environment; and
(v) Infrastructure Concession and Regulatory Commission
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The Committee has so far reviewed existing studies and literature on the
availability of coal in the country and the following fundamental issues were
noted:
(i) A significant proportion of the coal blocks in the country have
already been released on concession to the private sector but with
little or no development;
(ii) In pursuit of the privatization of the Nigeria Coal Corporation, some
of the coal blocks owned by the company have been put on
concession by the Bureau of Public Enterprises;
(iii) Most of the initiatives by the private sector towards developing coal-
fired power plants are being frustrated by lack of credible and
bankable estimate of the coal reserves;
(iv) Some of the coal blocks owned by the Nigeria Coal Corporation are
still being held by the Bureau of Public of Enterprises and may be
offered on concession.
In an effort to bridge the information gap and facilitate the development of
bankable coal to power projects, the Committee concluded that the following
studies would be needed:
(i) A bankable estimation of the coal reserves in identified blocks based
on internationally acceptable standards;
(ii) A detailed evaluation of the quality of the coal;
(iii) An assessment of the infrastructural requirement for developing
such coal-fired power plants;
(iv) A review of the transmission infrastructure in the vicinity of the
proposed site;
(v) An evaluation of the Environmental and Social Impact Assessment;
and
(vi) A determination of the optimal plant capacity that may be supported
by the identified coal blocks and/or consolidation of blocks.
In consideration of the aforementioned requirement, the Committee
recommended that the conduct of a Bankable Feasibility Study would be the
expedient means of addressing all the issues identified by the review.
Furthermore, it was concluded that the feasibility study shall be anchored on coal
blocks that are devoid of any encumbrances by third parties. In this respect, the
20
NCC blocks located in Enugu axis and currently under the custody of BPE
(identified as Lot I) were considered as the best candidates for such a study.
Other eligible coal blocks within the Benue/Kogi/Gombe axis were identified
through the Mining Cadastral and captured as Lot II in the procurement.
LOT I: ENUGU AXIS
(i) Ezimo Coal block: The area lies approximately 70 kilometers north
of the city of Enugu. The block lies within the coordinates long. 7º
31´E, lat. 6º 51´N. 7 º 31´E, lat. 6 º 54´ N; long. 7 º 34´E, lat 6 º
54´ N; long 7 º 34´ E, lat 6 º 51´ and covering an area of 3706.82
Hectares;
(ii) Onyeama Coal block: The area is located south of Ezimo along
the eastern flank of Anambra Basin on the foot of Enugu
Escarpment. The block lies within the coordinates long. 7º 27´E, lat.
6º 29´N. 7 º 27´E, lat. 6 º 26´ N; long. 7 º 24´E, lat 6 º 26´ N;
long 7 º 24´ E, lat 6 º 29´ and covering an area of 3,028.165
Hectares;
(iii) Okpara Coal Block:Okpara bock is located south of Onyeama
along the eastern flank of Anambra Basin on the foot of Enugu
Escarpment. The block lies within the coordinates long. º 25´E, lat.
6º 22´N. 7 º 25´E, lat. 6 º 25´ N; long. 7 º 29´E, lat 6 º 25´ N;
long 7 º 29´ E, lat 6 º 22´ and covering an area of 4,014 Hectares;
(iv) Amansidiodo Coal Block: The block lies within the coordinates
long. 7º 17´E, lat. 6º 29´N. 7 º 10´E, lat. 6 º 29´ N; long. 7 º 10´E,
lat 6 º 33´ N; long 7 º 17´ E, lat 6 º 33´ and covering an area of
12,500 Hectares; and
(v) Inyi Coal Block: The block lies within the coordinates long. 7º
17´E, lat. 6º 09´N. 7 º 17´E, lat. 6 º 06´ N; long. 7 º 15´E, lat 6 º
06´ N; long 7 º 15´ E, lat 6 º 09´ and covering an area of 2601.16
Hectares.
LOT II: BENUE/KOGI/GOMBE AXIS
21
(i) Abocho Coal Block (Kogi): The area is located near Abocho
Township road linked to Dekina – Emewe State Road linked to
Dekina-Anyigba Federal Road. The coordinates of the coal mine is
5km away from Latitude 7 º 38´ 45´´N, Longitude 7 º 11´ 15´´E;
(ii) Markudi Coal Block (Benue): The area is located in the outskirts
of Markudi Township on Markudi-Otukpo State Highway. The
coordinates of the coal mine is 142 km from km away from Latitude
7 º 30´N, Longitude 6 º 36´E
(iii) Gombe Coal (Gombe): The area is located in the northeast of
Nigeria in Akko LGA of Gombe State near Kumo town 34 kilometers
from Gombe on the Numan road.
The Committee therefore developed a Request for Proposal (RfP) and the Terms
of Reference contained therein designed to address the information gap outlined
in paragraph 5 above.
In line with the Public Procurement Act, an invitation for prequalification of
bidders was published in the Economist, Federal Tenders Journal, Daily Trust and
ThisDay Newspapers of March 22, 2010 and a total of fifteen (15) companies
were prequalified by a Committee established by the Ministry. The method of
selection, in line with international best practice, was Quality and Cost Based
Selection (QCBS). In order to ensure that only companies with requisite
qualification and experience were appointed for the consultancy service, Messrs
Colenco Power Engineering was retained to conduct the Technical Evaluation and
only technically qualified contractors were considered further for financial
evaluation. The Tender Evaluation Report submitted by MessrsColenco Power
Engineering Ltd had been appraised by the Bureau of Public Procurement for
compliance with the Public Procurement Act and other extant guidelines and the
under-listed Due Process Certificates of No Objection were granted by the
Bureau.
(i) Lot I: Due Process Certificate of No Objection for the award of contract
in favour of Messrs of MessrsSteagEncotec West Africa/IMC in the sum of
£2,141,096.00 plus N296,049,783.72 inclusive of 5% VAT; and
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(ii) Lot II: Due Process Certificate of No Objection for the award of contract
in favour of Messrs GTA/WAPCOS in the sum of US$4,157,000.00 plus
N188,622,000.00 inclusive of 5% VAT
The Federal Executive Council had considered the procurement and approved the
award of contracts on the basis of above recommendations. The Consultants
have since commenced work on the assignment and are currently evaluating the
EOIs in respect of the geotechnical investigations under the contract.
Other Sources of funding for the Power Sector
In the light of the significant capital cost of power infrastructure, the following of
initiatives outside budget are being pursued by the Ministry:
Collaboration with the World Bank: The World Bank has in many respects
supported the Ministry towards the development of the power sector. In
particular, the ongoing National Energy Development Project through PHCN/PMU
is executing numerous capital projects and sectoral studies for the industry. The
Ministry has also finalized on a new initiative under the World Bank tagged
Nigeria Electricity & Gas Improvement Project (NEGIP). The project is designed
to provide risk mitigation measures for gas supply to the industry (Partial Risk
Guarantee (PRG) and payment for wholesale power delivered by Independent
Power Plants. The NEGIP project further seeks to provide funding for
investments towards the infrastructural bottlenecks that may arise as a result of
increased power generation arising from an improvement in gas supply.
However, the counter-indemnity Agreement between the bank and the Federal
Government is yet to be executed as the creditworthiness of the “Bulk Trader” is
anchored on the PRG. The department has also worked with the Bank to develop
an internal Carbon Finance Group that would facilitate the development of CDM
projects within the power sector. In particular, the Group is expected to package
the following investments for carbon credits:
Rehabilitation of power plants;
NIPP Power Plants
Renewable Energy Projects (Wind Farm)
Energy Efficiency Projects (e.g Compact Fluorescent Lamps)
23
African Development Bank: The ABD is providing a concessionary sum
US$150million in the form of budget support for the Federal Government. The
triggers for disbursement are linked to the Power Sector Reform agenda and the
National Assembly has approved the loan under the 2010 Borrowing Plan.
AfD: The French development bank, AfD, has offered a concessionary loan of
US$170 million for the projects in the power sector. The loan has also been
approved by the National Assembly under the 2010 Borrowing Plan. The Ministry
of Power has submitted a formal request to the Ministry of Finance for the facility
but the latter is yet to forward same to AfD. The AfD has indicated a deadline of
July 20, 2011 for the receipt of the request so as to meet up the timeline of its
Board of Directors. The bank has also pledged its readiness to provide US$150
million concessionary loans annually in support of the power sector.
Sellers’ Credit: A number of internationally reputable companies such as AK-AY
of Turkey are have indicated an interest to fund Transmission and Sub-station
projects with repayment spread over a period of 5 – 10 years. However, all the
proposals require a Sovereign Guarantee due to the below par credit assessment
of TCN.
b) Electrical and Inspectorate Services Department
Statutory Duties/Functions
The Electrical Inspectorate Service Department of the Ministry was
established by an Act of Parliament in 1954. It had its legal instrument of
Operation in the Electricity Act chapter 57 (Cap 57) which later became
Cap 106 of 1990 and revised and gazetted in 1996. The department is
vested with the following statutory duties and responsibilities of ensuring
safety of lives and property and security of supply in the electricity
industry:
The inspection, testing and certification of all electric power
transmission lines and distribution networks Nationwide and
Independent Power Producers Projects:
The inspection, testing and certification of Large consumers electrical
installations such as large and high rise commercial buildings,
Industries/Factories premises, breweries etc;
24
The inspection, testing and certification of Completed rural
electrification projects consisting of primary injection substations, 33kV
sub-transmission lines and 33/11kV distribution networks:
The licensing of privately owned generating sets which are outside the
capacity limit of the Nigerian Electricity Regulatory Commission (NERC)
i.e 1MW and below:
The issuance of electrical installation licenses to competent and
qualified electrical contractors:
The investigation of electrical accidents and electrocution for safety of
lives and property, with a view to finding out the causes and ways of
preventing future occurrences in line with the provisions of the
Regulation:
Revenue generation for Government:
The inspection, testing and certification of electric concrete poles for
use in the electricity industry:
In addition to these statutory duties, the Department
Coordinates the implementation of the Japanese grant-in-aid for rural
electrification in Nigeria:
oversees the activities of the Rural Electrification Agency: -
comments of Director, EIS needed on the matter based on
reaction from REA
Coordinates all issues relating to Renewable Energy and Energy
Efficiency:
Coordinates the implementation of small and medium hydropower
projects:
To carry out these functions the Ministry established 15 Area offices
throughout the Country located at Abeokuta, Akure, Ibadan, Lagos,
Enugu, Kaduna, Kano, Sokoto, Maiduguri, Yola, Abuja, Ilorin, Jos, Benin
and Port Harcourt
Achievements
The Electrical Inspectorate Services achieved the followings:
25
Main Statutory duties
A total of 650 electrical installations including generation, transmission
and distribution power projects were inspected and tested out of which
450 were certified for use:
A total of 790 electrical installation licences were issued from January
to date:
The department through its Area offices generated a total revenue of
nineteen million two hundred and seventy one thousand seven
hundred and eighty two naira ( N19, 271, 782.00) from January
2011:
A total of 50 electrical accidents/electrocutions were reported of which
a total of 36 have been investigated from January 2011 to date:
Japanese grant-in-aid rural electrification project
The project involves electrification of selected rural communities located
in difficult terrain and/or inaccessible to the national grid.
Electrification of Eburutu communities (MAP 1 & II) in Cross-rivers State
completed except map III where there was communal conflict:
Ibedu Ibiaikot communities‟ rural electrification in Akwa Ibom State
completed and energized.
Present Efforts in Renewable Energy
Due to the need to diversify energy mix, in view of the
present monopolistic type of fuelling and imbalance in the location
of the existing power stations, the use of renewable energy is
encouraged to provide alternative sources of power generation
especially in the rural areas. To this end, the Ministry is coordinating
an Inter-Ministerial Committee on Renewable Energy and
Energy Efficiency.
Solar Projects
The Ministry has completed the solar power pilot projects in Ogun and
in Cross Rivers State:
Waste-to-Power
26
The Ministry is collaborating with the Federal Ministry of
Environment to work on the Waste-to-Power Project and other RE
projects:
Small and Medium Hydro Power Plant
The Department had carried out consultancy studies and engineering
designs of 13 identified dams for power generation so as to produce
bankable documents which will make them executable. The ten (10)
executable dams out of the identified ones are ready/awaiting
concessioning: These are:
10MW Oyan Dam in Ogun State, 6MW Ikere Gorge in Oyo State, 3MW
Bakolori Dam in Zamfara, 7.5MW Challawa Dam in Kano, 10MW Tiga
Dam in Kano, 500KW Kampe Dam in Kogi State, 450KW Owena Dam in
Ondo State, IMW Doma Dam in Nasarawa State, 300KW Zobe Dam in
Katsina State and 4MW Jibia Dam in Katsina State.
The Ministry is liaising with Infrastructure Concessioning
Regulatory Commission (ICRC) on the Concessioning of the dams for
PPP:
The Ministry is collaborating with the Federal Ministry of Water
Resources on the concessioning of the Power components of all dams
in Nigeria:
Construction of 1.2MW hydropower plant at Amoke in Benue State.
Selection of contractor is ongoing as a tripartite project by the Ministry
of Power who is to provide the civil works, while Benue State
Government will handle all environmental issues and UNIDO to provide
the turbines.
The Federal Ministry of Water Resources is constructing a multi-purpose
dam in Kashimbila, Taraba State with a 40MW power component.
The Ministry is involved in the project component of the project being
funded by Federal Ministry of Water Resources. The Ministry will handle
the power evacuation through Transmission Company of Nigeria. (TCN)
The Ministry is also involved in the implementation of Gurara Phase I
& II being handled by Federal Ministry of Water Resources:
27
The Ministry on behalf of the Federal Government had signed an MoU
with the Nordic Countries on cooperation & development of energy
sector in Nigeria in particular renewable energy:
The Federal Government signed a Financial Agreement of Euro700,000
with the German KfW for Hydropower studies under the auspices of
National Energy Council :
c) Investment and Sector Development Department (ISD)
INTRODUCTION
The Department of Investment and Sector Development was created in
2008 in line with the Reform Agenda of the Federal Government in addressing
the problems of prospective power Investors who would respond to the
Government initiative in making electricity available to the citizenry.
STRUCTURE
The Department comprises two divisions as follows:
(i) Investment Division
(ii) Sector Development Division
FUNCTIONS
The Department of Investment and Sector Development is responsible for
carrying out the following functions:
Undertaking necessary investment appraisal for projects and
activities related to system expansion plan;
Coordinating all the activities of the Standing Committee on IPPs as
a way of finding out the challenges hindering the take-off of the
licensed IPPs since 2006, and to make appropriate recommendations
to the HMP for their take-off.
Promoting commercial and Technical practices in the Industry
particularly in respect of the Public Owned Enterprises;
Through the Public Private Partnership Unit, the Investment and
Sector Development Department interfaces with the Infrastructure
and Concession Regulatory Commission throughout out the lifestyle
of Projects for concessioning.
28
Formulating Policies, Strategies and ensuring that adequate planning
of the Electricity Industry is achieved in line with the Federal
Government set objectives: that is to make affordable and reliable
electricity available to all Nigerians, to help drive the economic
growth as well as meet the challenges that require electricity;
Developing Strategies and Appropriate Policies that will make the
Power Sector financially viable and able to facilitate economic
growth; and
Following up on Electricity Development Programmes and project
implementation.
ACTIVITIES
In a bid to carrying out the functions stated above, the Department has
undertaken the following activities amongst which are:
Programmes:
Standing Committee on Independent Power Projects:
The Department superintends over the Standing Committee on IPPs (Inter –
Ministerial Committee) which was set up by Government, to provide a one-stop
shop to investors. The Committee interacts with prospective investors on
information they need to know as well as sell out the objectives of Government
including highlights of incentives available. The membership of the Committee is
drawn from the following MDAs and Government Agencies i.e
-Power Holding Company of Nigeria (PHCN)
-Transmission Company of Nigeria (TCN)
-Nigerian Electricity Regulatory Commission (NERC)
-Central Bank of Nigeria (CBN)
-Federal Ministry of Finance (FMF)
-Federal Ministry of Power (FMP)
-Federal Ministry of Environment (FME)
The Committee, since inauguration till date had met with twelve (12) licensed
and sixty–seven (67) prospective Investors some of which were identified by the
Committee to be Engineering Procurement Contractors (EPC). In addition some
29
investors indicated interest in the development of the transmission aspect of the
Sector.
The Committee at the end of each meeting with the Prospective Investors
provides through the Secretariat for those that require them, Letters of
Comfort in lieu of guarantees to International Financial Institutions, Letters of
Introduction to Embassies for processing of Visas and Letters of
Commendation for presentations made which serves as a medium for fast
tracking the implementation of the Project.
Study Tour of Existing Power Stations :
The staff of the Department embarked on the study Tour of some of the existing
Power Stations in order to acquaint them with the knowledge of the operations
of the Plants and enhance the efficiency and productivity in the discharge of their
duties on issues relating to Sector Development.
Jatropha as an Alternative Source of Power Generation
An Inter-ministerial Committee on Jatropha Curcas Development in Nigeria was
inaugurated in March 2010 and held several meetings up to December, 2010.
This Committee has been dormant but with the recent change in the leadership
of Ministry, the Department has revisited the Jatropha Development programme
as other MDAs and Organisations are doing one project or the other on Jatropha
for the exploration of alternative sources of power generation. A proposal to
convene an Inter-ministerial meeting on Jathropha is in the pipeline with a view
to coming up with policies on Jathropha Projects in Nigeria and to come up with
a National Jathropha Network for mutual support , collaboration amongst the
Farmers, Researchers, Academia and the Investors.
d) Human Resources Management Department
The Human Resources Management Department is one of the Common Services
Departments of the Ministry.
Its Mandate is carried out under its two Division, namely; Appointments,
Promotion and Discipline (APD) and Staff Welfare and Training (SWT).
The APD Division is charged with matters relating to appointments, upgrading,
conversions and discipline of its staff and those of its Parastatals. The SWT
30
Division is charged with the general welfare of its staff especially in the areas of
accommodation, sports, cleaning, union activities, stores management etc and
the training of its staff both locally and internationally.
The Charter is an expression of the commitment and resolve of the Human
Resources Management Department to provide efficient services on Human
Resources for the entire Ministry and its Parastatals.
FUNCTIONS OF HUMAN RESOURCES DEPARTMENT
To ensure proper office management and general administration of the
Ministry;
To ensure that qualified Personnel are sourced and / or deployed
accordingly to man appropriate officers;
To ensure that qualified staff due for promotion are presented for the
exercise as and when due, thereby ensuring institutionalization of
adequate succession planning mechanisms in thee the Ministry‟
To maintain general discipline of staff in line with PSR, FR, and Extant
Circulars and Civil Service norms.
To ensure that staff are exposed to all relevant training programmes.
To ensure that welfare provisions are made available to staff in accordance
with the provisions of the PSR and extant circulars.
To ensure that office accommodation are adequately provided through
liason with OSGF and OHCSF.
To ensure that staff participate in sporting activities to maintain good
health.
To ensure that appropriate working environment and materials are
provided for all staff.
31
e) Planning, Research & Statistics Department
The planning, Research and Statistics Department is one of the four
(4) Common Services Departments of the Ministry. It comprises of
three Divisions namely: Planning Division, Monitoring and Evaluation
Division; and Research & Statistics Division (which also oversees the
ICT Unit and the Ministry‟s Library). The mandate of the Department
included the following:
Preparation and Submission of the Ministry‟s Federal Executive
Council (FEC) Memoranda to the Cabinet Secretariat;
Compilation and Submission of returns on implementation of
decisions of the Federal Executive Council to the Policy
Implementation and Monitoring Unit of the Presidency;
Coordination of Ministerial / Inter – Ministerial Meetings;
Coordination of the Ministry‟s participation in bilateral and
multilateral relations as well as International Joint Commission
meetings with the Ministry of Foreign Affairs (MFA) and the
National Planning Commission (NPC) respectively;
Conducting research studies into identified and approved
projects in the Power Sector of the Nigerian Economy;
Management of the Ministry‟s Energy Data Bank, computer
Services and Library;
Setting and monitoring of Performance Efficiency Targets;
Monitoring and Evaluation (M&E) of all power sector project;
Liaison with Government Agencies and other bodies outside
the Ministry;
Dissemination of information and correspondence with the
Ministry‟s Parastatals;
Preparation of progress and Annual Reports to showcase the
activities of the Ministry;
Coordinating of annual Ministerial Press Briefing;
Coverage of meetings of the Honourable Minister with CEOs of
Parastatals and Agencies and meetings of the Permanent
Secretary with the Directors and Head of Units; and
Any other duties as may be periodically assigned to the
Department.
32
f) Procurement Department
The Procurement Department was created with the signing into law of the Public
Procurement Act, 2007 by Mr. President, Alhaji Umar Musa Yar‟Adua on 4th June,
2007. The Federal Executive Council took steps to establish an institutional
frame work to ensure effective implementation of the Act via Circular No.
HCSF/PSO/150/25 dated 31st March, 2008 issued by the Head of Civil Service of
the Federation which direct the immediate take-off of Procurement Departments
in all the Ministries, Departments and Agencies (MDAs). Subsequently, through
another Circular No: HCSF/PDO/155/25 dated 9th June, 2009 directing ful
implementation of the Public Procurement Act by all MDAs. MDAs were also
advised to make arrangements to receive the Procurement Officers.
The Procurement Department is bestowed with the responsibilities of ensuring
that all procurements (both Capital and Recurrent) are administered in
compliance with the Public Procurement Act, 2007. This involves the
administration of Due Process in the Procurement of goods, works and services
and the award of all contracts in the Ministry.
The commitment of the Procurement Department is to provide efficient
procurement services by making sure that procurement processes of the Ministry
and its Parastatals are carried out according to the provisions of the Public
Procurement Act, 2007.
DUTIES AND RESPONSIBILITIES
Officers in the Cadre shall perform the following duties;
Monitoring and oversight of Public Procurement, harmonizing the existing
government policies;
Prepares an effective Procurement Plan for the Ministry (Procurement
plans of different departments or units are combined into one single plan),
identifying what needs to be procured, how project needs can best be
met, the scope of the goods, works and services required what
procurement strategies or methods to be deployed, setting the time
frames, and the responsibilities for the full procurement process. This
Procurement Plan is usually prepared during the annual budgeting
process, preferably during the last quarter of each year.
33
It coordinates all activities of Ministerial Tenders Board (MTB) which
include tender solicitation, analysis, selection and award of contract for
the procurement of goods, works and services within approved threshold
for the Ministry‟s projects.
It carries out supervisory functions and capacity building on the
procurement process of TCN and PHCN successor companies including the
provision of a secretariat to MTB.
It is responsible for stocks procurement and disposal, verification,
documentation and administration.
Ensuring that all procurements (both Capital and Recurrent) are
administered in compliance with the Public Procurement Act, 2007. This
involves the administration of due process in the procurement of goods
and services and the award of all contract in the Ministry, Departments
and Agencies to which they are deployed (due process here refers to the
open and competitive tendering system which includes, but not limited to,
open advertisement of proposals for suppliers and contract awards, pre-
qualification of suppliers and contractors where appropriate, submission
and open evaluation, etc.).
Maintenance of register/database of suppliers, contractors and consultants
for the Ministry/Department/Agency and the payment of appropriate fees
for tendering purposes.
Maintenance of a periodically up to – date price data base as may be
provided by the Bureau of Public Procurement for public Sector
Procurement contracts and awards and conducting independent price
verifications and independent market analysis‟ reviewing Bills of
Quantities, ensuring compliance with scope of works, schedules, etc
where necessary.
Superintending strict adherence to all extant regulations and procedures
on procurement of contract awards with emphasis on ensuring
transparency and accountability in the tendering processes.
Liaison with Bureau for Public Procurement Planning Committee (BPP) or
any other organization/agency on matters relating to contract awards;
particularly obtaining certificate of with BPP and generally attending to
queries regarding procurements and settlement of disputes.
Facilitate and Co-ordinates Procurement/Planning Committee (PPC); and
Ministerial Tenders Board (MTB) meetings Manages records and
34
information relating and emanating from procurement proceedings,
including obtaining necessary approvals, etc.
STRATEGIC FOCUS
The Department Planned to focus on effective procurement (Capital
and Recurrent) that meets the provisions of the public Procurement Act,
2007 and due process requirements. It also intends to reposition for
greater achievement in 2012, by monitoring all the ministry‟s projects.
g) Finance and Accounts Department
The Finance and Accounts Department is one of the common Services
departments of the Ministry. The department is divided into three divisions i.e.
Finance, Accounts and Budget with two Deputy Directors. The Department is
responsible for the preparation of the Ministry‟s Budgets through the Budget
division and the payment of the entire Ministry‟s financial transactions approved
by the Accounting officer (Permanent Secretary).
OUTLINED FUNCTIONS OF THE FINANCE AND ACCOUNTS
DEPARTMENT
Recording and updating of funds allocated into vote Books.
Processing and issuing of AIE for approved bills and claims.
Preparation of Daily, weekly and monthly balances and Returns.
Preparation of payment vouchers and Recording of AIEs.
Recording and balancing of Vote Books on daily basis.
Answering of Internal Audit Quarries.
Maintaining of cash Books and Mandate summary Registers.
Safe keeping of security Documents and writing of Payment
Mandates.
Collection of Revenue and Bank payments.
Handling Banking Transactions.
Checking and passing of payment vouchers, salary and LPCs.
Receipt and safe keeping of payment vouchers.
35
Batching and pre-listing of payment vouchers.
Analysis of Revenue and payments into Analysis Books.
Preparation and submission of Monthly Transcripts and ATRRS.
Reconciling Bank Statements with Cash Office Books.
Preparation and submission of Bank Reconciliation Statements
Preparation of payment Vouchers for all Advances.
Recording/Documentation of Retirement of Personal and
Non – Personal Advances
Control of Advances Ledger/Registers.
Control of Advances Vote Books.
Handling of Public Account Committee Matters.
Opening of New Personal Emolument Cards.
Receiving and processing of salary variations.
Controlling of salary payments and Group Registers.
Preparation of Staff salary deduction and summaries.
Preparation of Last Pay Certificates (LPCs)
Compilation of Nominal Roll, and Leave Roster for Accounts Staff.
Handling of Administrative matters that affect Accounts.
Other assignments as directed by Management.
h) Legal Unit
The Legal Unit of the Ministry falls under the Office of the Honourable Attorney-
General of the Federation, whose office is a constitutional creation by virtue of
Section 150 of the constitution of the Federal Republic of Nigeria 1999. Being a
Unit under the Ministry, it exercises such functions and powers that are
exercisable by the Honourable Attorney-General of the Federation pursuant to
Section 174 (2) of the Constitution.
36
The Unit constitutes a clearing house for all legal matters for which the Ministry
is involved. The core functioning of the Unit includes but not limited to the following:
Drafting/Vetting of Legal documents and Agreements for the
Ministry;
Rendering Legal opinion/advice on all legal matters referred;
Handling litigation matters on behalf of the Ministry;
Negotiation of contract terms and conditions on behalf of the
Ministry.
In order to effectively discharge its constitutional/administrative responsibilities
within the purview of the Ministry of Power, the Unit is guided by the provisions
of the Constitution of the Federal Republic of Nigeria, Procurement Act, National
Electric Regulatory Commission Act, Law Reports of various Courts, Electric
Power Sector Reform Act and other extant Laws.
i) Internal Audit Unit
In line with Financial Regulations 20, the Internal Audit Unit of the Ministry was
established to provide a complete and continuous audit of the Accounts records
of revenue and expenditure, plants, allocated and unallocated stores where
applicable. The Unit is directly responsible to the Accounting Officer for
comprehensive audit of all operations and activities of the Ministry. In this
regard, it carries out not only Financial Audit but also Compliance Audit,
Performance Audit and Management Audit of other areas of the Ministry with a
view to monitoring their economic efficiency and effectiveness.
The functions of the Internal Audit Unit include amongst others:
To secure the installation and maintenance of soundly based system of
control within the Ministry;
37
To review and where necessary make recommendations for the
improvement of systems, controls and procedures in order to ensure that
they are both efficient and effective;
To assist in protecting the assets and interests of the Ministry eg; by
carrying out continuous examination of activities in order to prevent or
promptly detect fraud, misappropriation, irregular expenditures or losses
of cash by ensuring that the rules, regulations and extant
circulars/instructions are observed;
To monitor the use of resources in the pursuit of the objectives
established by law and other authorizing bodies; and
To render monthly, quarterly, half-yearly, and special reports to
appropriate authorities.
j) Press & Public Relations Unit
The schedule of duties for the Press and Public Relations Unit are as
follows:
* Arranging press conferences, briefings, interviews for the Honourable
Minister.
* Ensure that information and facts in annual/quarterly Ministerial Briefings
are correct.
* Ensuring that the ecstatic beauty of the Ministry is guaranteed at all times
with artworks, pictures and graphics.
* Accompanying the Hon. Minister/Permanent Secretary on official assignments, in and outside Nigeria and ensuring that appropriate news
items are generated from such trips.
* Coverage of courtesy visits/meetings.
* Covering all interactive sessions of the Ministry officials/ Stakeholders and
the Media or related bodies.
38
* Monitoring of Local and International news reports on both Electronic and
Print Media for feedback.
* Daily compilation of Newspaper/Magazine reports/Press Clippings on
Power related matters and weekly Press Review.
* Dissemination of information through press releases, feature articles, internet etc.
* Sending Press Releases with Photographs to the Federal Ministry of Information website www.fmic.gov.ng. and all Media Houses on daily
basis.
* Populate, edict and ensure contributions for a functional, educative and
informative website for the Ministry‟s website [www.power.gov.ng].
* Responsible for the designing and placements of advertisements, and
announcements on print and electronic media.
* Covering activities/programmes of the Ministry as Master of Ceremony.
* Ensuring documentation through production of Photographs, CDs, DVD‟s,
Videotapes, VCDs, etc. for dissemination and for the archives.
* Any other duty as assigned by the Honourable Minister and the Permanent
Secretary.
k) SERVICOM Unit
The SERVICOM Unit came into being as a result of the Federal Executive Council
resolution of 10th March, 2005 that each Ministerial/Department/ Agency should
establish a Ministerial SERVICOM Unit (MSU). The MSU spearheaded the service
delivery initiative of the Ministry towards SERVICOM Compliance, thereby
ensuring the promotion of quality assurance and best practices in the
performance of its functions.
FUNCTIONS OF SERVICOM UNIT
Disseminate best practices and other tips on Service Delivery Improvement within the Ministry.
Coordination and Publication of the Ministry‟s Charters. Monitoring the implementation of each Departmental Charter.
39
Coordinate meetings of the stakeholders‟ Consultative Forum on service delivery.
Periodically develop and carry out sensitization programmes on effective service delivery for all segments of staff in the Ministry.
Ensuring good reception areas for customers. Ensuring condusive working environment for members of staff.
Periodically report to the Ministry‟s Management on SERVICOM activities. Institute complaints procedure including Grievance Redress Mechanism for
the Ministry and Parastatals.
Keeping records and taking actions on complaints, comments and suggestions by customers.
l) Protocol Unit
The Unit covers the entire Ministry‟s Organizational outfit and co-ordinates the
Hon. Minister‟s work by producing weekly schedule for the Minister, handling of
the protocol administration of the Honourable Minister. The unit also provided
venues for Seminars, Conferences, Investitures for the Ministry, provides and
process all travelling documents for the Honourable Minister and member of staff
travelling for official events. The Protocol Unit, besides its image – making
functions, creates the right environment for the conduct of business of
governance and diplomacy to thrive in the Ministry.
VI. AGENCIES UNDER THE MINISTRY OF POWER
6.1 Power Holding Company of Nigeria (PHCN) Successor Companies
6.1.1 Generation Companies (GENCOS)
S/N GENCOS LOCATIONS
1 Afam Rivers State
2 Egbin Ogun State
3 Jebba Niger State
4 Kainji Niger State
5 Ughelli Delta State
6 Shiroro Nigeri State
7 Sapele Delta State
8 Olorunsogo Ogun State
9 Omotosho Ondo State
10 Geregu Kogi State
40
The Generation companies:
GEREGU POWER PLC, AJAOKUTA
2011 ANNUAL REPORT
INTRODUCTION
Geregu power station is a simple cycle gas turbine plant, with a total installed
capacity of 414MW. It has three (3) units, with each with capacity to generate
138Mw. The station was commissioned on the 26th of February, 2007. The first
unit GT13, started commercial operation on 19th March 2007, followed by GT12
on 20th April 2007, and GT11 on 12th May, 2007. The station can still generate up
to its installed capacity. The station has just been upgraded to a CEO status,
giving us greater impetus to achieve greater heights.
GENERATION 2007 TO 2011
41
2007 2008 2009 2010
2011
The station generated 1,494,591MWH of energy as at end of November 2011,
surpassing the previous year‟s generation.
SERVICE LEVEL AGREMENT (SLA)
1135612 997125.4
378993.7
777622.8
1494591
1 2 3 4 5
ANNUAL TOTAL GENERATION MWH 2007 TO 2011
Series1
0
50
100
150
200
250
300
350
JAN. FEB. MAR. APR. MAY JUN. JUL. AUG. SEP. OCT. NOV. DEC.
MW
SLA PERFORMANCE 2011
Average Generation MW
SLA Commitment MW
Lower band (65%) MW
High Band (85%) MW
42
The station on the whole has consistently been above the lower band of the
SLA, except in May due to delayed arrival thermocouples needed for the
replacement on the units, and October arising from gas stoppage to the
station by Nigerian Gas Company.
KEY PERFORMANCE INDICATORS
The station had gas supply stoppage by NGC in October leading to a fall in
performance in the Load Factor.
INVESTMENT OPPORTUNITY
I. Re-Design of the IGV, to give it the frequency control capability, at
least for one unit.
II. Repair and upgrading of the Win-Tx. This will provide the necessary
data required from the flight recorder for the re-design of the IGV. It
will also make it possible to communicate with Siemens AG service
department, in time of technical advice during running or breakdown
and planning of maintenance. This will ultimately improve life span of
the plant, and improve generation. (760,000 euro.)
0
0.2
0.4
0.6
0.8
1
1.2
IND
EX
KPI JAN. TO AUG. 2011
Load Factor
Generation Utilization index
Capacity Utilization index
Planned Mtce Index
Breakdown Mtce Index
Station Reliability Index
43
III. Combine cycle. Investment in the building of a combine cycle will make
it possible to use a Heat Recovery Boiler to generate steam to produce
around 150 to 200MW. Now the hot gases from the gas turbine are just
going into the atmosphere, which is a waste.
IV. In a privatized situation supported by economic tariff structure, a
bankable PPA, operational Gas sales and transportation agreement,
Geregu Power Station will be a very profitable business especially if an
O&M or Long Term Service Agreement is negotiated with the OEM.
KAINJI HYDRO ELECTRIC PLC
Kainji Hydro Plant is an old plant with turbine generating units of between 33 and 43 years old. The original development plan for Kainji provided for the total power installation of 960MW.
At the completion of the project in 1978, the total installed capacity was 760MW with 8No units leaving the four number open pits without installation of turbine generating units. These installed units have not under gone the required statutory overhaul apart from unit 1G11 which was fully rehabilitated in 2002, but now due for overhaul. This lack of statutory overhaul has made the units susceptible to frequent faults. Kainji hydro Electric Plc was incorporated on 1st July, 2006 as one the
PHCN successor companies. This premier Hydro Power Station in Nigeria
has pursued with vigor the actualization of its mission and vision
statements above by a resolution to the maintenance of six units in
service.
This we pursued by ensuring that effective and timely routine and annual
maintenance jobs were carried out promptly. In this regard, the year 2011
took off on a fine note with units viz: 1G6, 8, 10, 11, and 12 all available
and in service with a total load capability o 405MW.
The un-available units are;
- 1G5 (10.59hrs, 08/11/2000) - Major damage on the turbine and
Generator due to failure of the governor system.
44
- 1G7 (20. 11hrs, 23/09/2008) - Generator Stator winding failure.
- 1G9 (23.51hrs,10/09/2010) – High water leakages from the runner
inspection door
Meanwhile, 1G9 was returned back to the Grid at 16.33hrs on 14th March,
2011 after the sealing of water leakages from the runner inspection door
with a combined capacity of 200MW, 1G5 & 1G7) await the
commencement of the planned rehabilitation by federal Government/World
Bank for their return to the National Grid.
3. ACTIVITIES CARRIED OUT DURING THE YEAR 2011. The company staff developed efficient and effective Maintenance Management System (MMS) to reduce breakdown maintenance. Hence, daily, weekly, monthly annual maintenance jobs were carried out on the available units, transformers and plant auxiliaries. Some of the units were schedule for annual maintenance with a view to ensure maximum machine availability, sustenance, hence enhanced generation. The programs were carried out at a period of low water operating head mostly between April and August. The maintenance schedules, i.e. monthly inspection, annual maintenance as carried out are as shown below; i.e. (a, b, c)
45
4. YEAR 2011 PROPOSED JOINT MONTHLY INSPECTION (JMI) AND ROUTINE
PREVENTIVE MAINTENANCE SCHEDULE OF UNITS.
A.
YEAR 2011 (JMI & RPM) FOR STATION TRANSFORMER
UNITS JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
1G5 - - - - - - - - - - - -
1G6 4 3 3 5 3 2 7 2 8 4 3 6
1G7 - - - - - - - - - - - -
1G8 11 8 8 12 10 7 12 9 13 11 8 8
1G9 13 10 15 14 12 13 14 11 15 13 10 13
1G10 18 15 17 19 17 16 19 16 20 18 15 15
1G11 20 17 22 21 24 21 21 18 22 20 17 20
1G12 25 22 29 26 26 28 26 23 29 25 29 29
X JAN FEB MAR APR MAY JUN JUL AU
G
SEP OCT NOV DEC
GT5 - - - - - - - - - - - -
GT6 4 5 7 4
GT7/8 8 10 9 8
GT9/1
0
15 19 16 15
GT11 22 21 22 20
GT12 29 28 29 29
46
5. 2011 ANNUAL MAINTENANCE
B.
UNITS
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
1G6
1G11
1G12
SUMMARY 1G6 - 25TH JULY – 29TH AUGUST, 2011 (6 WEEKS) 1G11 - 3RD MAY – 8TH JUNE, 2011 (6 WEEKS) 1G12 - 9TH SEPT – 21ST OCT, 2011 (6 WEEKS)
UNITS ACTIVE DESCRIPTION PERIOD OF
MTCE
REMARKS
1G6 Unit Annual maintenance
including welding/grouting
of throat ring/runner
chamber
25th July to 29th
August 2011
(6weeks)
To sustaining unit
availability and as well as
arrest water leakages
emanating from the
cracked throat ring metal
structure.
1G11 Unit Annual Maintenance 3rd May to 8th To sustaining unit
47
7. MAJOR REPAIR FOR MEGAWATT RECOVERY AND SUSTENANCE OF
PLANTS
UNI
TS
ACTIVITY DESCRIPTIONS PERIOD OF
MAINTENANCE
REMARKS
1G6 a. Annual Maintenance of
the unit.
b. Welding and
reinforcement of the
cracked areas of the
throat ring externally
and internally.
3rd October, 2011
to 31st October,
2011.
(4weeks)
Sustain unit
availability, reliability
and capability as well
as arrest serious water
leakages emanating
from the cracked
throat ring metal
structure. Job
completed, re-
commissioning in
progress.
including welding/grouting
of throat ring/runner
chamber
June, 2011
(6week)
availability and as well as
arrest water leakage
emanating from the crack
throat ring metal
structure.
1G12 Unit Annual Maintenance
including welding/grouting
of throat ring/ runner
chamber.
9th Sept to 21st
Oct, 2011
(6weeks)
To sustain unit availability
as well as arrest water
leakages coming from the
cracked portion of the
throat ring
48
1G1
1
a. Annual maintenance of
the unit including under
water repair works on
1G11 intake gate B
buckled guide rails of the
bulkhead/screen gates is
completed.
25th May, 2011 to
18th August, 2011.
Unit re-
commissioned to
the grid on
12/8/2011.
Unit availability to full
capacity of (100MW)
after the repair works
on intake Gate B
buckled guide rails
was completed. The
unit has been
operating on one gate
before now, with
75MW capacity.
(25MW recovered)
Sustenance of the
unit.
1G1
2
a. Annual maintenance of
the unit including
welding and
reinforcement of the
external cracks on the
throat ring and turn
buckles to be carried
out.
a. Shut down due to
punctured main bearing
cooling coil.
22nd August – 3rd
October, 2011.
The unit has been
dewatered on
28/8/11 with the
assistance of
underwater diving
service provider.
Maintenance and
welding job
completed unit-in-
service.
To sustain unit
availability and
capability as well as
arrest serious water
leakages coming from
the cracked portions
of the throat ring.
1G8 a. Repair works on the oil
head and replacement of
new jackshaft/extension
completed.
a. Trouble shooting of high
governor sump
temperature including
Cannot be
ascertained now
for the unit has to
be dewatered for
proper fault
diagnosis, before
repair.
The unit will be out till
we are able to
complete the major
repair job on 1G6,. By
then, fault diagnosis
will start.
49
frequent tripping of
machine on governor
fault and profuse oil
leakage to the oil head
sump is suspended till
jobs on 1G6, 1G10 and
1G12 are completed.
8. THE PLANT STATUS AS AT 25TH NOVEMBER, 2011
UNIT
INSTALLED CAPACITY
PRESENT
CAPACITY
DATE OF
COMMISSIONI
NG
PRESENT
WORKING
CONDITION
PROBLEM ASSOCIATED WITH THE UNIT
DATE OF LAST
MAJOR OVERHA
UL
REHABILITATION
SCHEDULE
REMARK
1G5
120 MW
Nil 21/07/1978
Not Available
Failure of the unit was due to the Turbine Governor System failure with major damages to turbine and generator in Nov 2000
Nil To be retrofitted under NBA/World Bank Phase 1 project. Completion is 35 months from contract effectiveness
Contract awarded to Joint Venture Partners Hydro China Haudong Engineering Company & Harbin Electric Machinery Company was
signed on 27th
June, 2011.
1G6
120 MW
120MW
13/03/1978
Repair job complete Re-commissioning is in progress
Lack of statutory overhaul leading to Throat ring ruptures and excessive water leakage
Nil To be retrofitted under NBA/World Bank Phase 1 project. Completion is 42 months from
Contract awarded to Joint Venture Partners Hydro China Haudong Engineering Company & Harbin Electric Machinery Company
50
from turbine head cover .
contract effectiveness
signed on 27th
June, 2011.
1G7
80MW Nil 22/12/1968
Not Available
Generator stator winding insulation
failure.
Partially rehabilita
ted in 2002
First phase contract for the supply of stator
assembly coil awarded to Alstom. To be delivered in June, 2012.
Discussion with Hydro China Huadong for an offer on turbine
and auxiliary rehabilitation and the installation of the Generator stator is currently on going.
1G8
80MW NIL 23/12/1968
Unit out on governor fault. Investigation and repairs to commence at the
completion of units 1G6, repair work.
Excessive water leakage from the turbine head cover. Profuse oil leakage from the return motion tube to the oil
head sump.
Partially rehabilita
ted in 2002
Proposed for world Bank rehabilitation phase 2.
Need to be rehabilitated.
51
1G
9
80MW 30MW 13/02/1
969
Unit
available
and in-
service.
Derated
to
30MW
Weak and
aged stator
/ rotor
windings.
Aged
Generator
Transformer.
Old 16KV Generator
Circuit Breaker.
Nil Proposed
for World
Bank
rehabilitatio
n Phase 2.
Unit could be
decommissione
d if not
rehabilitated
soonest, as the
unit is no more
reliable.
1G
10
80MW 40MW 18/06/1
969
Unit
available
and in-
service.
Derated
to
40MW
Weak and
aged stator
/ rotor
windings.
Aged
Generator
Transformer.
Old 16KV Generator Circuit Breaker
Nil Proposed
for World
Bank
rehabilitatio
n Phase 2.
Unit could be
decommissione
d if not
rehabilitated
soonest, as the
unit is no more
reliable.
1G
11
100M
W
100M
W
29/01/1
076
Unit
available
and
In-
service.
Leaking throat ring / runner chamber.
Fully
rehabilita
ted in
May
2002.
Statutory
overhaul
required.
Unit contributes
40MW for Grid
Frequency
regulation apart
from 60MW set
entry point.
1G
12
100M
W
80MW 31/07/1
977
Unit
available
and
In-
service.
Excessive
water
leakage
from the
head cover.
Frequent
Nil 1st phase
World Bank
rehabilitatio
n.
Contract
awarded to
Contract award
signed on. 27th
June, 2011.
52
throat ring / runner chamber ruptures
Hydro-
China.
Completion
in 36
months
from
contract
effectivenes
s.
GT
9/1
0
13/02/1
969
Availabl
e and
de-rated
Aged Generator Transformer with high acoustic noise level.
Nil Need to
replace the
power
transformer
with a new
one
Repair carried
out to ensure
its availability
pending the
replacement.
9. PROJECT
PROPOSED REHABILITATION OF 1G7
The contract for the supply of Hydro Electric Unit 1G7 generator stator (Phase 1)
has been awarded to Alstom (OEM). Down payment of 15% has been made to
ALSTOM. Awaiting first batch of stator bars forecasts for February, 2012. Supply
is expected to be completed by the end of June, 2012.
10. RETROFITTING /REHABILITATION OF 1G5, 1G6 AND 1G12
The proposal for the first phase of rehabilitation/retrofitting of units 1G5, 1G6
and 1G12 is to be carried out through world bank/NBA (Niger Basic Authority)
(2008-2013). The due process programme of activities for this retrofitting is
under the purview of project Management Unit (PMU) division of PHCN corporate
Headquarters and it has been completed.
Contract awarded to joint venture partners Hydro China Haudong Engineering
Company & Harbin Electric Machinery Company was signed on 27th June,
2011. (USD81, 746,642.49).
53
The completion period for each of the units is as shown below;
1G5 - 35 months for contract
effectiveness
1G6 - 42months for contract
effectiveness
1G12 - 36months for contract
effectiveness
Auxiliary Services - 39 months for contract
effectivenes
11. PROPOSED REHILITATION/RETROFITTING OF UNITS 1G7, 1G8,
1G9 AND 1G10
The proposal for the rehabilitation / retrofitting of these units is planned
for the second phase of World Basin Authority (NBA) programme.
12. PROPOSED OVERHAUL OF 1G11
Unit 1G11 was fully rehabilitated in 2002, but now due for another
overhaul.
13. INVESTIMENT OPPORTUNITIES
There is also the possibility installing low operating head Kaplan turbine
generators in open pits 1-4 (the concrete structures are already in place)
possibly 60MW x 4 or 80MW x 3. This if done will allow for flexibility of
maintenance and also frequency regulation. The 33okV switch yard has to
be constructed for these units, if they are to be installed.
54
14. IMPORTANCE OF KAINJI UNITS REHABILITATION/ BENEFITS TO
THE NATION.
The generating plants will operate efficiently and reliably for many years
and contribute effectively to the power production in country, based on the
condition that the regular statutory overhaul as recommend/specified by
the manufacturer/ contractor are always done.
The station will be able to perform its statutory role fully, by Black Starting
the gird, controlling of the system frequency to achieve grid stability and
bulk power delivery, if fully rehabilitated.
15. STRATEGIC FOCUS
Costs effectively produce environmentally friendly, qualitative and
quantitative electricity.
Maintenance of adequate stock of tools and spares for rapid response to
faults.
Training and re-training of our work force on new and applicable
technology.
Minimize breakdown maintenance by application and deployment of best
practices of maintenance Management System (MMS).
Develop an effective Performance Management System.
Use the Kaplan advantage to handle frequent regulation and system
stability.
Units 1G8, 1G9, 1G10 should be considered for retrofitting/rehabilitation
as they are aged and some of the spares are no longer in production.
These units may be decommissioned as they are no longer reliable.
Timely release of budgeted money as the original equipment
manufacturer (O.E.M.) requires total sum of payment to be released
before letter of credit can be opened.
55
Expedite action on the proposed installation of low head Kaplan turbine
in open pits (1-4) concrete and intake structures are already in place.
16. WORK PLAN
YEAR 2012 ANNUAL MAINTENANCE PROGRAMME
SUMMARY
1G6 - 4th JUNE TO 30th JULY, 2012 (8 WEEKS)
1G11 - 2nd APRIL TO 28th MAY, 2012 (8 WEEKS)
1G12 - 1st AUGUST TO SEPT, 2012 (8 WEEKS)
MTHS JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
1G6
1G11
1G12
UNITS ACTIVE DESCRIPTION PERIOD OF MTCE REMARKS
1G6 Unit Annual maintenance
including welding/grouting
of throat ring/runner
chamber
4th June to 30th July
2012
(8weeks)
To sustaining unit
availability and as well
as arrest water
leakages emanating
from the cracked
throat ring metal
structure.
1G11 Unit Annual Maintenance
including welding/grouting
of throat ring/runner
2nd April to 28th
May, 2012
To sustaining unit
availability and as well
as arrest water leakage
04/06
to
02/04
to 28/05
01/08
to
56
6.1.2 Transmission Company of Nigeria (TCN)
Transmission Company of Nigeria (TCN) was incorporated in November,
2005. TCN emerged from the defunct National Electric Power Authority
(NEPA) as a product of the merger of Transmission and Operations Sectors
in April 1, 2004.
The Transmission Company of Nigeria (TCN) is one of the 18 unbundled
Business Units under the Power Holding Company of Nigeria (PHCN) and
was issued a Transmission License on 1st July, 2006.
ORGANIZATION STRUCTURE
Fig. 1 shows the organizational structure of Transmission Company Nigeria
The management team of TCN is headed by a Chief Operating Officer,
who is assisted by four Executive Directors in running the following sectors
of the company:
Finance and Administration headed by Executive Director (Finance
& Administration)
General Manager(Finance & Economic Services)
chamber
(8week)
emanating from the
crack throat ring metal
structure.
1G12 Unit Annual Maintenance
including welding/grouting
of throat ring/ runner
chamber.
1st August to 26th
September, 2012
(8weeks)
To sustain unit
availability as well as
arrest water leakages
coming from the
cracked portion of the
throat ring
57
Responsible for Finance & other related Services
General Manager(Corporate Services, Human Resources & Change
Management)
Responsible for Administration, Human Resources and other
Corporate Services matters
Market Operations headed by Executive Director (Market
Operations)
General Manager (Market Operations)
Responsible for coordination of Market Operations in the whole
network
58
MD/CEO(PHCN)
CEO(TCN)
Hon. Minister of Power
PHCNTransitional Board
TCNTechnical Monitoring
Committee
Executive Director(Transmission
Service Provider)
Executive Director(System Operator)
Executive Director(Finance & Admin)
Executive Director(Market Operations)
General Manager(Market Operations)
General Manager(Design & Construction)
General Manager(Mtce & Field Services)
General Manager(PSPR&D)
General Manager (Monitorin g /Evaluatio n)
General M anager (National Control
Center)
General Manager(Finance & Accounts)
General Manager(HR, CS & CM)
General Manager (Transmission)8No Regions
59
Fig. 1 The organizational structure of Transmission Company of Nigeria
System Operations Headed by ED (System Operations)
General Manager(NCC)
Responsible for coordination of Systems Operations in the whole
network
Transmission Services headed by Executive Director (Transmission
Service
Provider)
General Manager (Design & Construction)
Responsible for development of the Transmission Grid at 132kV and 330kV voltage levels with the view to increasing access to quality electricity in the country.
General Manager (Maintenance & Field Services)
Coordinates running and maintenance activities in the whole network by the eight (8) Regional Transmission Managers throughout the country
General Manager (Power System Planning, Research & Development)
Responsible for Transmission Grid planning, research and development.
General Manager (Monitoring and Evaluation)
Responsible for monitoring and evaluating Transmission projects nation-wide.
Eight(8) No. Regional Transmission Managers
These are responsible for running and maintenance of transmission and transformation facilities in their areas of operation, which are:
- Bauchi Transmission Region with Headquarters in Bauchi and covers Bauchi, Yobe, Adamawa, Taraba, Gombe and Plateau states.
60
- Kaduna Transmission Region with Headquarters in Kaduna and
covers Kaduna, Kano, Katsina, Jigawa and Zamfara states
- Shiroro Transmission Region with Headquarters in Shiroro and
covers Niger, Kebbi, Sokoto, Nasarawa states and the Federal
Capital Territory
- Benin Transmission Region with Headquarters in Benin and covers
Delta, Edo and Kogi states
- Lagos Transmission region with Headquarters in Ijora and covers
Lagos and Ogun states
- Osogbo Transmission Region with Headquarters in Osogbo and
covers Osogbo, Ekiti, Ondo, Oyo, Osun and Kwara states
- Enugu Transmission Region with Headquarters in Eungu and covers
Enugu, Anambra, Ebonyi and Benue states
- Port Harcourt Transmission Region with Headquarters in
PortHarcourt and covers Rivers, Cross Rivers, Bayelsa, Imo, Abia
and Akwa Ibom states.
ADAM
AW
A
GOMBE
YOBE
BORNO
BAUCHI
TARABA
PLATEAU
ZAMFARAJIGAWA
KANO
KATSINA
KADUNA
SOKOTO
KEBBI
NASS ARAWA
ABUJ
A
ONDO
NIGER
OSUN
EKITI
KWARA
OYO
DELTA
EDO
KOGI
ANAM
BRA
EN
UG
U
EBO
YI
BENUE
CRO
SS R
IVE
R
ABIA
AKWAIBOM
IMO
RIVERSBAYELSA
OGUN
Maiduguri W/C
Yola W/C
Makurdi W/C
Ajaokuta W/C
Jos W/C
Shiroro W/CKainji W/C
Jebba W/C
Abuja W/C
Dutse W/C
Kano W/C
Gusau W/C
B/Kebbi W/C
Kaduna W/CGombe W/C
New Haven W/C
Onitsha W/COwerri W/C
Calabar W/C
Ahoada W/C
Sapele W/C
Delta W/C
Papalanto W/C
Afam W/C
Ikot Ekpene W/C
Benin W/C
Benin North
Omotosho W/C
Osogbo W/C
Ilorin(Ganmo) W/C
Ayede W/C
Akangba W/C Ikeja West W/C Egbim W/C
Aja W/C
61
Fig. 2 Geographical Locations of the Transmission Regions.
EXISTING TRANSMISSION INFRASTRUCTURE
Two major facilities used by TCN to provide electrical service to its customers are
transmission lines and power transformers. Transmission lines can be described
as highways of electricity while power transformers are used at various points
along the way from generation to delivery and to final use. The existing
transmission system has the capacity to transmit about 6,662.3MW at 330kV and
8,238.2MW as portrayed in the following transmission network data as at 31st
October, 2011.
• 5,515.35km of 330 kV of Transmission lines
• 6,881.49km of 132kV of Transmission lines
• 33No. 330/132kV Substations with total installed transformation capacity
of 7,838 MVA (equivalent to 6,662.3MW)
• 106No. 132/33/11kV Substations with total installed transformation
capacity of 9,692 MVA (equivalent to 8,238.2MW)
• The Average Available Capacity on 330/132kV is 7,514MVA and 9,097MVA
on 132/33kV which is 95.9% and 93.7% of Installed capacity respectively
• Average Transmission Loss is 8.5%
62
Fig. 2. Existing National Transmission Grid
Fig. 3. Existing National Transmission Grid.
63
TCN HUMAN RESOURCES
SECTION DEPARTMENTS
(NUMBER)
WORK CENTRES
(NUMBER)
STAFF COUNT
(NUMBER)
CHQ 7 - 445
LAGOS REGION - 6 560
OSOGBO
REGION
- 5 321
KADUNA
REGION
- 5 327
BAUCHI
REGION
- 5 265
BENIN REGION - 5 271
SHIRORO
REGION
- 6 468
ENUGU REGION - 4 266
PH REGION - 6 267
NCC 2 - 148
TOTAL 9 32 3338
TRANSMISSION NETWORK INFRASTRUCTURAL DEVELOPMENT
Fig. 4. Transformation Capacity 2006 – 2011. Transformer capacity increased by
28.5% and 21% on the 330kV and 132kV networks respectively as a result of
replacement of lost capacities and additional capacities realized from completion
64
of new projects.
Fig. 5. Transmission Line Length 2006 – 2011.
330kV and 132kV Transmission Lines route length increased by 8.9% and 12.8%
respectively between 2006 and 2011 due to completion of new transmission
lines.
65
MAJOR ACTIVITIES
Status of Implementation of Transmission Capital Projects
802.5km of 330kV Lines are under construction out of which 779.5km are
above 50% completion stage.
625.3km of 132kV Lines are under construction out of which 316.8km are
above 50% completion stage.
1,350MVA transformer capacity at 330/132kV is presently being installed in
new substations out of which 900MVA capacity is above 50% completion
stage.
2,850MVA Capacity of 132/33KV transformers are presently being installed
in new substations out of which 810MVA are above 50% completion stage.
722km of 330kV line, 699km of 132kV line, 1,350MVA capacity at
330/132kV and 1,800MVA capacity at 132/33kV are being procured in the
2010 budget.
About 600km of overloaded 132kV transmission lines are being re-
conductored with higher capacity conductors
ACHIEVEMENTS
8.1 Transmission Projects Completed in 2011
S/N Project Title / Description Installed Capacity
Added Capacity
Date Completed
1ST QUARTER, 2011
1. Damaturu-Maiduguri 330kV line Yobe-Borno States
184kM 184kM Jan, 2011
2. Installation of a new 60MVA, 132/33KV Transformer to replace 1x12.5MVA at PH Town T.S.
60MVA 47.5MVA Mar, 2011
3. Installation of a new 60MVA, 132/33KV Transformer to replace 1x15MVA at Itu T.S.
60MVA 45MVA 14th March, 2011
66
2ND QUARTER, 2011
4. Katampe 1x150MVA, 330/132kV transformer
150MVA 150MVA 11th April, 2011
5. Installation of a new 60MVA, 132/33KV Transformer to replace 1x7.5MVA at Katsina T.S.
60MVA 52.5MVA 15th May, 2011
6. Installation of a new 60MVA, 132/33KV Transformer to replace
1x30MVA at Ayede T.S.
60MVA 30MVA 19th May, 2011
7. Installation of a new 60MVA, 132/33KV Transformer at Central Area T.S., Abuja
60MVA 60MVA 19th May, 2011
8. Installation of a new 60MVA, 132/33KV Transformer at Birnin Kebbi T.S.
60MVA 60MVA 24th May, 2011
9. Installation of a new 60MVA, 132/33KV Transformer to replace 1x15MVA at Abakaliki T.S.
60MVA 45MVA 25th May, 2011
10. Installation of a new 60MVA, 132/33KV Transformer to replace 1x30MVA at Kaduna Town T.S.
60MVA 30MVA 25th May, 2011
11. Installation of a new 60MVA, 132/33KV Transformer to replace 1x30MVA at Benin T.S.
60MVA 30MVA 28th May, 2011
12. Jos-Kafanchan 80kM, 132kV Lines 80kM 80kM 3rd June,
2011
3RD QUARTER, 2011
13. Installation of a new 60MVA, 132/33KV Transformer at Ikorodu T.S. (LEEC, mfd 2010)
60MVA 60MVA 9th August, 2011
14. Installation of a new 60MVA, 132/33KV Transformer to replace a defective 45MVA at PH(Town) T.S.
60MVA 45MVA 21st August, 2011
67
(LEEC, mfd 2010)
15. Installation of a new 60MVA, 132/33KV Transformer at Kumbotso T.S. (Cropton Greeves, NIPP)
60MVA 60MVA September, 2011
The above transmission network expansion and reinforcement projects aimed at
substantial improvement in the wheeling of electricity and increased capacity to
the grid were completed in year 2011.
Table 10.1 Transmission projects planned for completion in 2012
S/N
PROJECTS
Date
Award
ed
Estimated
Completion
Date
330kV
Line/km
132kV Line/km
330kV /MVA
132kV /MVA
1 Mbalano-Okigwe
132kv SC line Abia 2001 2012
20.3
2
Okigwe 2x30/40MVA
132/33kV Substation,
Imo
2001 2012 60
3
Mbalano
2x30/40MVA
132/33kV substation.
Abia
2001 2012 60
4
Makere - Pankshin
132KV DC Line
Plateau State
2007 2012 122
5
Kano- Walalanbe
132KV Line (Turn in
and out of Dan
agundi-Dakata
132KV single Cct
Line) and 2 x
30/40MVA S/S at
Walalambe Kano
2007 2012 60
68
State
6
3rd Benin - Onitsha
330KV DC Line Edo
- Anambra States
2007 2012 141
7
2x30/40MVA
132/33kV S/S at
Ogoja Cross
River State
2007 2012 60
8
Rehabilitation of
Sokoto - Talatmafara
132KV DC line
2007 2012 235
9 132//33kV at Aboh -
Mbaise S/S 2009 2012 120
10
Transmission &
Supply of Substation
at Tamburawa Water
Facility
2009 2012 60
11
2x60 MVA, 132/33
kV substation at
Ideato and 2 x132KV
Line Bays at Okigwe
2009 2012 120
12
1X30 MVA 132/33 KV
SS at Kwanar
Dangora
2009 2012 30
13
Afam - PH 132kv DC
turning in and out at
PH main TS
2009 2012 10
14
2nd Benin-Onitsha
330kV SC line Edo-
Delta-Anambra
States
2008 2012 132.8
69
15
Onitsha 150MVA
330/132/33kV T/F
and 330kV bays at
Onitsha and Benin.
Anambra / Edo
States
2008 2012 150
16
Calabar 2x150MVA,
330/132/33kV
Substations and line
bay at Alaoji
Substations. Cross
River States
2006 2012 300
17
Damaturu 330/132kV
Substation Yobe
State
2006 2012 150 60
18
132/33KV S/S at
Ayangba Kogi
State
2007 2012 120
19
2 x 30MVA
132/33KV S/S at
Pankshin and Makeri
2007 2012 120
20
Daura 2 x 30/40MVA S/S and 2x
132kv line bay ext. at Katsina
Katsina State
2007 2012 60
21
1x60MVA Substation at Ughelli
Power Plant and 1x30/40MVA
substation reinforcement at Amukpe
2008 2012 90
22 Kukwaba 2x60MVA, 132/33kV
substation 2007 2012 120
23 2 x60MVA 132/33kV S/S at 2007 2012 120
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Ogbomosho 1no. 132kV Bay
Extension at Ganmo:Oyo &Kwara
States
24
2x60 MVA, 132/33 kV substation at
Oba and 2 x132KV Line Bays at
Nnewi
2009 2012 120
25 1X30MVA, 132/33 kV Substation at
Wudil, Kano State 2010 2012 30
Total Expected Capacity
273.8 387.3 600 1,410
Grid Operations
An interconnected grid was maintained in year 2011. A peak generation of
4,054.2 MW occurred on the 4th October, 2011 while 90,315.27MWH is the peak
to date daily energy generation recorded in April 16th 2011.
Average Power Stations MWH/H Generation On The Peak
Day(4054.2 MW) of
4th October 2011
S/N STATION
AVERAGE GEN/STATION
(MWH/H)
1 KAINJI 272
2 JEBBA 453
3 SHIRORO 396
4 EGBIN 875
5 TRANS AMADI 6.3
6 AES 120.5
7 SAPELE 130
8 SAPELE NIPP 0.0
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9 IBOM POWER 25.6
10 OKPAI 459
11 AFAM 1-5 60
12 AFAM VI 544
13 DELTA 232
14 GEREGU 190
15 OMOKU 0.0
16 OMOTOSHO 65
17 OLORUNSOGO I 108
18 OLORUNSOGO II 117.8
Total Hydros 1121
Total Thermals 2933.2
HYDRO + THERMAL 4054.2
Stations Contribution To Energy Generated On The Peak
Energy Day of
April 16, 2011
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STATION TYPE OF TURBINE
MWH
KAINJI HYDRO 8282.00
JEBBA HYDRO 10230.00
SHIRORO HYDRO 9383.00
EGBIN STEAM 19816.00
TRANS AMADI GAS 418.80
AES GAS 5326.80
SAPELE STEAM 3733.27
IBOM POWER GAS ----
OKPAI GAS 10283.00
AFAM 1 – 5 GAS 1465.50
AFAM VI GAS 2001.60
DELTA GAS 5687.20
GEREGU GAS 5454.80
OMOKU GAS ----
OMOTOSHO GAS 514.00
OLORUNSOGO PHASE I
GAS ----
OLORUNSOGO PHASE II
GAS 2719.30
TOTAL 90315.27
Forecast Of Stations For The Next Six Months Starting From
September, 2011
Are as follows:
Station Sept
(MW)
Oct
(MW)
Nov
(MW)
Dec
(MW)
Jan
(MW)
Feb
(MW)
Kainji 200 165 270 270 280 280
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Jebba 240 360 320 270 225 240
Shiroro 300 300 300 300 300 300
Egbin 860 860 860 1080 1080 1080
Geregu 220 220 220 330 330 220
Omotosho 70 105 105 105 105 105
Olorunsogo
I
21.5 21.5 21.5 21.5 21.5 21.5
Olorunsogo
II
240 240 365 365 365 365
Delta 320 340 380 480 500 500
Sapele 90 170 220 260 260 170
Afam I – V 65 65 65 117 117 117
Sapele
NIPP
112 224 224 224 336 336
Okpai 470 451 451 470 470 429
AES 160 160 188 215 215 240
Afam VI 424 562 562 513 525 510
Transamadi 80 80 80 80 80 80
Omoku 40 60 80 100 100 100
Ibom 75 75 75 75 75 75
TOTAL 3987.5 4458.5 4786.5 5275.5 5384.5 5168.5
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CHALLENGES
The major challenges to the performance of TCN are as follows:
Radial Lines with no redundancies
Obsolete Substation Equipment
Overloaded transmission lines and Substations
The network is still largely manually operated (not fully automated)
Inadequate Coverage of Infrastructure
Limited Funds for Development projects
High Technical loss
Menace of Erosion of Towers
Hostile Communities(i.e. way-leave issues)
Delay in the release of approved Budget
Downward amendment of approved budget on projects
Frequent system disturbances resulting in partial/total collapse.
Operational Problems (Voltage and Frequency controls): Absence of free
governors to manage allocated load effectively.
Challenges of opening L/C
Lengthy Procurement Process
Challenges during clearing of materials/ equipment at the Port
Delay in the release of approved Budget
Vandalism of Transmission lines
Delay in the release of MYTO subsidy
Lack of adequate technical manpower at various work centres
Ways to mitigate the challenges:
Vandalism: Police together with the host communities are partnering with
the various regions to secure the transmission lines.
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Erosion menace: Erosion control measures are employed in the affected
areas.
Lack of adequate manpower: Casual workers are used to close the gap.
Fast tracking the procurement process
Procurement of work tools and test equipment.
Completion of on-going capital and in-house projects
Reinforcement of existing network
Timely release of approved funds for project execution and maintenance
activities.
Acquisition and development of adequate human capacity to cope with the
ageing work force.
Completion of projects targeted at closing the loop in the transmission
grid.
STRATEGIC FOCUS
Our Vision:
A transmission company with a solid reputation for delivering reliable,
cost-effective electric power to end users in Nigeria and West African Sub-
Region.
Our mission:
To cost effectively provide, operate and maintain the required assets,
equipment and transmission grid network for evacuating and dispatching
high quality and reliable electricity with minimal technical losses.
Our Strategies:
• Build Transmission Grid that can efficiently evacuate all generated
power
• Create adequate network redundancies to ensure at least 99.9%
reliability
• Reduce transmission loss to less than 5%
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• Pursue Inter connection with neighboring countries for power exchange
• Improve TCN‟s revenue base to ensure a self sufficient and self
sustaining company
Implementation of Strategy
All power stations to have alternative evacuation routes
All State capitals to have 330/132kV TS
All major towns, Local Govt. Headquarters and State Capitals to be on
dual source of supply at 132kV
All Transmission Stations to have at least 2 transformers that are less
than 75% loaded at any time
All Transmission Stations to be rehabilitated for automation operation
Implementation of Plan will be primarily from IGR, Contractor
Financing, Foreign Loans
Expected Revenue
The total expected revenue to settle the Market for January to September
2011 transactions was N198.92bn. The sum was made up of the
settlement invoices to the Discos and the Disco income based on the
MYTO of 2008.
Whereas the sum of the Market Operator‟s invoices was N158.07bn, the
sum of Disco incomes for the period was N40.85bn (including N1.58bn
over absorbed equalization amount).
Actual Revenue
Out of the N198.92bn expected in the Market during January to September
2011, actual revenue collected was N146.47, implying a revenue gap of
N52.45bn during the period.
The sum of N140.98bn came from the Disco collections (N110.98 collected
directly from consumers and N30b paid to DISCOs by FGN as MYTO
Subsidy) while N5.2bn was paid by CEB (Togo & Benin Republics) and
NIGELEC of Niger Republic. Also, the three Independent Larger Power
Consumers paid N0.294bn
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Required Vs Actual Market Settlement
The sum required to settle the Market January to September 2011 was
N198.92bn. Out of this, the Discos were expected to earn N40.85bn.
while the Federal Government generating plants were expected to receive
the total sum of N42.13bn. The IPPs were expected to be paid N51.43bn,
while Transmission Company of Nigeria (TCN) was required to be paid
N23.2bn. For gas supplied to the Thermal Plants (including AES - an IPP),
NGC and Shell were required to be paid the total sum of N17.62bn.
Due to the fact that actual revenue was lower than the expected revenue,
the actual Market Settlement during the period was short of the required
settlement. The situation was further compounded by the fact that the
Discos received N55.81bn instead of the N40.85bn provided in the MYTO.
The extra N14.95bn spent on Discos was due to the high Disco staff cost
and the inadequate provision for Disco Opex in the Tariff Order of 2008.
Also, the PHCN Corporate Headquarters is taking more responsibilities than
was provided for in the Tariff Order. Therefore, it took more payment
than required during the settlement period.
Consequently, the Gencos received N19.18bn instead of the required
N42.13bn; the IPPs were paid N23.5bn instead of the required N51.43bn.
The gas companies were paid N13.71bn instead of N17.62bn required for
the period, while the TCN was paid N14.18bn instead of N23.23bn.
Revenue Gap Vs Actual Settlement Gap
Ordinarily, the actual settlement gap should be equal to the revenue gap,
but due to the fact that some participants‟ receipts were not consistent
with their MYTO provisions, the actual settlement gap for the period 2011
was more than the revenue gap established.
Consequently, whereas the revenue gap was N52.45bn the actual
settlement gap was N82.3bn. This means that an extra sum of N82.3bn
was required for the Nigerian Electricity Market to achieve settlement
equilibrium during the period, January to September 2011.
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6.1.3 Distribution Companies (DISCOS)
S/N DISCOS AREAS COVERED (STATES)
1 Abuja Electricity Distribution Company Plc
FCT, Niger, Kogi, Nassarawa
2 Benin Electricity Distribution Company Plc
Edo, Delta, Ondo, Ekiti
3 Eko Electricity Distribution Company Plc
Lagos South
4 Enugu Electricity Distribution Company Plc
Enugu, Imo, Anambra, Abia, Ebonyi
5 Ibadan Electricity Distribution Company Plc
Oyo, Ogun, Osun, Kwara
6 Ikeja Electricity Distribution Company Plc
Lagos North
7 Jos Electricity Distribution Company Plc Plateau, Benue, Bauchi, Gombe
8 Kaduna Electricity Distribution Company Plc
Kaduna, Kebbi, Sokoto, Zamfara
9 Kano Electricity Distribution Company Plc
Kano, Jigawa, Katsina
10 Port Harcourt Electricity Distribution Company Plc
Akwa-Ibom, Cross River, Rivers, Bayelsa
11 Yola Electricity Distribution Company Plc
Adamawa, Borno, Taraba, Yobe
In consonance with the Roadmap unveiled by the President of the
Federal Republic of Nigeria on Thursday, 26th August, 2010 to
ensure modest but genuinely realizable improvements in the amount
and quality of electricity supplied to customers in the country all
Distribution Companies are expected to be privatized based on a
core investor sale of a minimum of 51% of the Government‟s equity
in the companies.
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6.1.4 NIGERIA BULK ELECTRICITY TRADING COMPANY PLC (NBET) –
The Electric Power Sector Reform Act of 2005 (EPSRA or the Act) provides for the bulk
trading licensee that will buy electric power (capacity, energy and ancillary services) from
generation companies for resale to distribution companies and eligible customers. This
entity, the bulk trader, will procure power through the Transitional Stage of the market
during which it is expected that the distribution companies would have reached a stage
where they can procure power on the strength of their operations at which point the bulk
trader will cease to procure new capacity.
In fulfillment of the requirements of EPSRA, and in line with the Roadmap to Power Sector
Reform, Nigerian Bulk Electricity Trading Plc (NBET aka the Bulk Trader) was incorporated
on July 29, 2010, with 100% Federal Government on Nigeria (FGN) shareholding. The
shareholding is split between the Bureau of Public Enterprises (BPE) and Ministry of Finance
Incorporated (MOFI), in a ratio of 80% and 20% percent, respectively.
Upon incorporation, the BPE and the Presidential Task Force on Power (PTFP) began to
midwife the activities of the company on two major fronts: 1) Engaging potential
Independent Power Producers (IPPs) in discussions for power purchase agreements (PPA),
to be backed by the World Bank‟s Partial Risk Guarantee (PRG) instruments; and 2)
Operationalizing the Bulk Trader by identifying the requisite functions and designing a
structure that will enable NBET effectively play its role.
On August 23, 2011, the President, Dr. Goodluck Jonathan inaugurated a nine-person
Board of Directors that included the Chief Executive Officer (CEO) for NBET. The board
members are;
Dr. Ngozi Okonjo-Iweala, (Coordinating Minister for the Economy and Hon Minister
of Finance) Chairman
Prof. Bart Nnaji Hon. Minister of Power
80
Mr. Rumundaka Wonodi, Chief Executive Officer
Mr. Saka Abimbola Isau SAN, Vice Chairman
Ms. Bolanle Onagoruwa Director-General, Bureau of Public Enterprises
Mr Haruna Sambo Mohammed
Hon. Mohammed Kumalia
Mr. Paul Usoro, SAN
Engr. Abdulganiyu Umar
PURPOSE OF THE BULK TRADER
During the Transitional Stage of the Nigerian electricity market reforms, NBET will be
responsible for buying power from IPPs and reselling the power to the distribution
companies (DisCos). It will not be the sole authorized or designated buyer, as other
entities, such as DisCos that have attained commercial viability, will be able to procure
power directly from GenCos as well. Accordingly, NBET will not be a monopoly but will,
in a sense, compete with other qualified buyers. Qualified companies are welcome to
enter bilateral contracts for sale or purchase of power.
81
PRIMARY RESPONSIBILITIES
Sign PPAs with privatized generation companies
Assume PHCN obligations in existing PPAs with IPPs (outstanding liabilities
transferred to NELMCO)
Negotiate and enter into PPAs with potential IPPs
Sign Vesting Contracts with Distribution Companies
Sign power sale agreements (PSA) with eligible customers
Values
Integrity
Transparency
Professionalism
Social Responsibility
GenCo1
GenCo2
GenCo3
GenCo4
GenCo5
GenCo6
DisCo 1 DisCo 2 DisCo 3 DisCo 4 DisCo 5
DisCo 6 DisCo 7
DisCo 8 DisCo 9 DisCo 10 DisCo 11
BULK TRADER
Existing
Existing
Existing
New IPPs
POWER PURCHASE
VESTING CONTRACTS
Additional
Eligible Customers
PPA
82
Teamwork
OBJECTIVES
To put in place an effective transaction environment which minimizes risk and allocates it
fairly to the parties best able to manage it
To implement a procurement process that is transparent and will result in the economic
procurement of needed power
To have all existing and new power capacity under contract by 2016, although the
commercial operation date when this capacity comes on line may be latter
To ensure efficient settlement in the short term until this function is subsumed under the
Market Operator
To become sustaining as soon as practical thereby minimizing the cost to the FGN
To be ready to novate contracts and wind up as soon as the suppliers are ready to take
on their own procurement
To enter into contracts that are well structured and managed in a manner that precludes
recourse to any credit guarantee instrument
ACHIEVEMENTS
The Electric Power Department of BPE and the Regulatory & Transaction Monitoring
(RTM) unit of the PTFP, have over the past year and since the incorporation of NBET,
been responsible for conducting the activities of NBET. The major milestones attained
during this period include:
Secured the commitment of World Bank for the provision of Partial Risk
Guarantee (PRG) for potential IPP contracts. Once the power sector reform was
formally restarted with launch of the Road map to Power Sector Reform and with
83
the determination that a Bulk Trading entity with a credible payment guarantee
needed to be established, the question became what form and type of guarantee
that will be used to back the bulk trader. After due considerations, the FGN
government decided to approach the World Bank for support through the Partial
Risk Guarantee instrument. World‟s Bank commitment for provision of PRG in
support of new capacity was obtained in the fourth quarter of 2010. Earlier this
year, the World Bank expressed interest to provide same in the privatization of
the PHCN Successor Generating Companies (GenCos).
Reviewed proposals from various IPP projects from which 14 qualifying projects
were nominated to the World Bank to qualify for PRG backed Power Purchase
Agreements (PPA) with the Bulk Trader.
The World Bank‟s energy team has undertaken 2 missions to the country. The
primary objectives of the mission are to engage all stakeholders in the reforming
industry both in the public and private sectors. Workshops on Environmental and
Social Impact Assessment Studies were held by the mission together with
representatives of the bulk trader. There were also visits to the nominated IPP
project sites and one-on-one sessions held with the project developers where
progress reports were given.
Procurement of legal advisory services for NBET. In the fourth quarter of 2010,
BPE conducted a procurement exercise for legal services. The bid for legal
advisory services was won by G. Elias & Co in association with Hunton & Williams.
In June 2011, BPE, on behalf of NBET, entered into contract with G. Elias & Co for
the provision. As a result, NBET was able to provide draft PPAs and
vesting contracts for inclusion in the data room for privatization of
PHCN successor companies. Also developed was a draft PPA for new
Independent Power Projects.
84
NBET finalized its licensing terms with Nigerian Electricity Regulatory Commission
(NERC) and has made the necessary payments required to obtain its license.
NBET has completed procurement of office accommodation for its operations
GOING FORWARD
Since the inauguration of its board, the management of NBET has been focused
on making the company operational. NBET will look to resolve key issues such as
o Set up a functional office location
o Hire key staff
o Finalize an organized process for engaging potential IPP developers in a
manner that provides the best value to the country
NBET will continue to be a key participant in the on-going privatization of the
PHCN successor companies and will work to fully embody its role as described
within the EPSRA 2005 and as required to develop the Nigerian Electricity Supply
Industry.
6.2.2 Nigerian Electricity Regulatory Commission (NERC) – is an
independent regulatory body saddled with the regulation of the electric power
industry in Nigeria. NERC was formed in 2005 for formation and review of
electricity tariffs, transparent policies regarding subsidies, promotion of policies
that are efficient and environmentally friendly, and also including forming and
enforcing of standards in the creation and use of electricity in Nigeria. NERC was
instituted primarily to regulate the tariff of Power Generating companies owned
or controlled by the government, and any other generating company which has
license for power generation and transmission of energy, and distribution of
electricity.
85
Powers and Duties of NERC
The Commission‟s powers and duties are solely provided for in the EPSR Act
2005, and effectively ushered the privatization of electric power services in
Nigeria unbundling of the defunct National Electricity Power Authority
(NEPA)/Power Holding Company of Nigeria to operates/investors, set and review
electricity tariffs and where possible promote competition. The Commission‟s
main objective is to protect existing and future consumers‟ interests in relation to
electricity generated and that conveyed by distribution or transmission systems.
Consumers‟ interests are their interests taken as a whole including their interests
in affordable tariffs and safe, reliable and available electricity supply, and the
reduction of greenhouse gases to them.
Structure of NERC
The Nigerian Electricity Regulatory Commission is governed by a tenured Board
of Commissioners, headed by a Chairman. The Nigerian President nominated
one nominee Commissioner to represent his/her geopolitical zone in the country
for a fixed tenure of 4 years, renewable once only. The Chairman/CEO, however
has period of 5 years, also renewable once only. The nominees are duly
screened by the Nigerian Senate. The Board of Commission of NERC issues
orders on electricity matters in Nigeria. It makes regulatory decisions and issues
final license to investors/operators. It also settles industrial dispute through its
ADR mechanism in an open hearing. NERC is divided into seven Divisions:
Office of the Chairman/CEO,
Engineering, Standard and Safety Division,
Finance and Management Services Division,
Government and Consumer Affairs Division,
Legal Licensing and Enforcement Division,
Market Competition and Rates Division, and the
Renewable energy/Research and Development Division.
86
6.2.3 National Power Training Institute of Nigeria (NAPTIN) –
The National Power Training Institute of Nigeria (NAPTIN) which was established
on March 23rd, 2009 commenced full operation in September, 2009. The primary
purpose for its establishment is to provide training for power sector personnel
and coordinate training activities in the sector. In pursuit of this mandate,
NAPTIN has taken over the management of the existing seven regional training
centers of PHCN.
The core values of NAPTIN are as follows:
Creativity and Innovation
Ethical Behaviour
Accountability
Business Objectives / Goals:
To create a strong, dynamic and World – Class Power Tarining Institutes
called NAPTIN;
Create a cadre of experts and professional trainers;
Develop partnership, affiliations and linkages with Local and International
Training Institutes and Universities;
To develop a marketing strategy to market the values of training in Power
Utilities in Nigeria.
NAPTIN's Organizational Structure
87
The above structure is the approved organizational structure for the Institute by the Ministry of Power
Training Centers:
The following are NAPTIN's Regional Training Centers are:
Naptin Main Campus, Abuja RTC, Afam RTC, Akangba
RTC, Ijora RTC, Jos RTC, Kaduna RTC, Kainji RTC, Kano RTC, Oji, Enugu
88
6.2.4 Nigeria Electricity Liability Management LTD/GTE –
The Nigerian Electricity Liability Management Limited/gte (NELMCO) are one of
the “other transferees” companies envisaged under S.22(1) EPSR Act.2005 the
EPSR Act 2005. The National Council on Privatisation (NCP) approved the set up
as one of the successor companies from the reform of PHCN. They were
incorporated under the Companies and Allied Matters Act, 1999 in August, 2006
as a company limited by guarantee, with registration RC664658. The
shareholders are the Federal Ministry of Finance Incorporated (MOFI) and the
Bureau of Public Enterprise (BPE), providing guarantees to the extent of 90%
and 10% respectfully.
THE MANDATE
To assume and administer the stranded debts and assets of PHCN
pursuant to the provisions of EPSR Act 2005
To assume and manage pension liabilities of employees of PHCN
To hold the non-core assets of PHCN, sell or dispose off or deal in any
manner for the purpose of financing the payment of debts or other related
matters.
89
To take over the management and settlement of PHCN‟s Power Purchase
Agreement (PPA) debts as may be determined by the National Council On
Privatisation from time to time.
To sell, mortgage, dispose off, deal in any manner of the property or
assets of the company as may be expedient with a view to promoting its
objects.
To do all such other things as are incidental or may be thought conducive
to the attainment of the above objects or any of them.
STAKEHOLDERS ENGAGEMENT STRATEGY
• Engage the Union of PHCN Pensioners to negotiated buy out.
• Engage inherited third party Creditors to negotiated settlement.
• Engage professionals to provide consultancy and advisory services.
• Engage relevant MDA‟s for support and concessions.
OPERATIONAL STRATEGY
The company‟s operational strategy during the Transitional Stage of the electricity market development will be to:
1. Engage professionals to provide consultancy advisory and due diligence services over stranded Debts and non - core Assets.
2. Engage in transparent and competitive bidding process in the disposal of the non-core assets
3. Engage the Union of PHCN Pensioners and negotiate Pension buy out 4. Engage PHCN Creditors and negotiate settlement modalities 5. Engage DMO and MOFI on foreign debt relief and swaps.
BUSINESS STRATEGY
• Regularly liaise with NERC and Market Operators for funds to:
– Settle Inherited PPA liabilities, Pay monthly pensions of PHCN
Pensioners.
• Use of reputable professional and consulting firms to provide advisory
services in the areas of:
– Actuarial valuation, Property valuation, Legal search, Negotiation
skills and Capacity development
90
• Regularly liaise with appropriate FGN MDA‟s to:
– Fund shortfalls to inherited liabilities e.g, PENCOM, To agree
possible debt swaps and forgiven and cancelled foreign debts
• Use of Financial Institutions for short - medium term bridging facilities.
– To take advantage of negotiated discounts due to delay in fund FGN
releases
– To leverage on financial instruments such as bonds, etc
GUARANTEE HOLDERS
The guarantors to NELMCO as per the Articles and Memorandum of
Incorporation provided guarantees in the following proportions:
a. Ministry of Finance Incorporated (MOFI). 90% b. Bureau of Public Enterprises (BPE). 10%
OPPORTUNITIES
NELMCO will avail itself of the under listed opportunities in the facilitation of its liability management responsibilities in the transition:
1. Raise finance from disposable non-core assets of PHCN 2. Liaise with PENCON with a view to accessing finance to deal with the
shortfall in the Staff Pension fund. 3. Access to FGN treasury to fund inherited Legacy debts and third party
liabilities. 4. Access to privatization proceeds from sale of PHCN successor companies. 5. Access to NERC MYTO fund for contribution to legacy debt settlement. 6. Collaborate with relevant government Agencies to access the Capital Market
for the issuance of financial instruments such as bonds, etc
FUNDING
The fund flow that will accrue to the company in the transitional period will be from the following sources:
1. Industry Receivables in respect of Federal, States and Local Governments. 2. Sales proceed of non-core assets
91
3. Ministry of Finance retained source deductions from Lagos State Government in respect of AES IPP counter-part contribution
4. Industry Levy by NERC on successor companies customers bill as pass-through operating cost in the form of “Reform charge”
5. FGN budget appropriation to fund shortfalls
TRANSFERRABLE NON-CORE ASSETS – 1 LAND & PROPERTIES
• PHCN London Office and Staff quarters
• PHCN HQ Building at Maitama, Abuja.
• PHCN HQ Annex at Wuse 2, Abuja.
• PHCN HQ Annex Building at Marina, Lagos
• PHCN HQ Annex Building at Awolowo Road, Ikoyi Lagos.
• PHCN Zonal Office Buildings at Ikeja, Ibadan (W.I.P), Enugu, Kaduna
(W.I.P), Jos, Kano, and Yola
• PHCN Golf Courses at Shiroro and Kainji.
• PHCN Bonded Custom Warehouse at Apapa, Lagos.
• PHCN Workshop at Ijora
• PHCN Undeveloped Plots of Land across the country.
• PHCN Medical Centres at Abuja, Ijora, and Oshodi and others.
• PHCN Unsold staff quarters
TRANSFERRABLE NON-CORE ASSETS – 2 CURRENT ASSETS (REVENUE)
• Receivables from government accounts country-wide of PHCN Successor
Distribution Companies. This should accrue to NELMCO for application in
the settlement of inherited IPP‟s liabilities.
These are accumulated debts arising from unpaid consumption of
generated and distributed electricity prior to the Bulk Trader executed
Contracts. The proceeds from these outstanding debts
• Proceeds from the sale of staff quarters to PHCN staff under the FGN
policy on government quarters and houses that is escrowed in some
banks.
• All Properties, Investments and monies owned and accruable to the PHCN
Superannuation Fund.
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• The balance of unremitted deductions made on behalf of PHCN at source
in the vault of the Federal Ministry of Finance, from Lagos State
Government as counterpart contribution to AES PPA payment obligation.
(this may have constitutional implication)
CHALLENGES
Liquidation of PHJCN and facilitation of the transfers of files, Agreements,
Contracts documents, Schedules, Title Deeds, Litigations, etc
Seed Money of =N=30billion to take advantage of payment on discounted
debts.
Budgetary provision to offset legacy debts, PPA unpaid bills, other
obligations.
Procurement of Consultants and Advisers to facilitate NELMCO‟s operation
Negotiation with Creditors and stakeholders for discounts on verified
liabilities
Domiciliation of current payment to PHCN in respect of monthly pensions,
gas bills, etc to NELMCO. This will facilitate continuation of on-going
payment obligations.
Capacity to meet Monthly =N=803m Pension payment of Pensioners.
Liquidation of PHCN and facilitation of transfers of Files, Agree UN-
CRYSTALIZED BURDEN – CONTINGENT LIABILITIES
1. Environmental Liabilities- (Possible worries of Investors from western
countries)
Asbestos-related liabilities
Realised on a massive scale in western economy in the last two
decades. Investor will require government commitment to their
settlement post-privatisation.
2. Polychlorinated Biphenyls (PCBs)
Contaminant in electrical equipments in the form of dielectric fluids in
transformers and capacitors. Studies have confirmed significant
percentage in PHCN transformers.
Contamination in open environment/sites that have been used to house
or maintain transformers.
93
3. Emissions to the atmosphere and discharges into water, management of
solid waste, etc
4. Third Parties Liabilities from States Government and Local Governments,
Communities, Corporate Institutions and Individuals arising from
investment in infrastructure valued along with PHCN networks
(These will crystallise pre or post -privatisation negotiations,
conduct of due diligence and upon transfer of ownership to
Investors)
TOTAL 2011 2012 2013 2014 2015=N=(m) =N=(m) =N=(m) =N=(m) =N=(m) =N=(m)
INFLOWS:
Proceed from sale of Non-Core Assets 19,500,000 - 9,500,000 10,000,000 - -Proceed from Receiveables on Government account 12,000,000 5,000,000 5,000,000 2,000,000 - -
Source Deductions from FGN/STATES/LGA’s ?? - - - - -Industry contribution to legacy debt payments 14,000,000 2,000,000 3,000,000 3,000,000 3,000,000 3,000,000
Proceed of sale of Staff Quarters 200,000 - 100,000 100,000 - -
Balance on Superannuation Fund ?? - - - - -Total (A) 45,700,000 7,000,000 17,600,000 15,100,000 3,000,000 3,000,000
OUTFLOWS:
IPP’sEnergy liabilities 64,999,297 4,999,297 20,000,000 20,000,000 20,000,000 0
Pensioners Buy-out 34,800,000 0 17,400,000 17,400,000
Foreign loans on Power Plants 40,469,087 0 10,469,087 10,000,000 10,000,000 10,000,000
FGN Foreign Loans 30,025,532 ? ? ? ? ?
Legacy debts and other liabilities 19,928,903 0 7,928,903 6,000,000 6,000,000 0
Local Bank Loans 2,064,117 1,000,000 1,064,117 0 0 0
World Bank/ADB Loans 43,774,339 0 15,774,339 14,000,000 14,000,000
Operations costs- Monthly Pension costs- Personnel Costs- Overheads- Fixed Assets
8,120,000588,730682,000255,000
4,640,000117,746187,000255,000
3,480,000117,746165,000
0
-117,746130,000
0
-117,746100,000
0
-117,746100,000
0
Total (B) 245,707,005 11,199,043 76,399,192 67,647,746 50,217,746 10,217,746
SHORTFALL = (A-B) (FGN APPROPRIATION PROVISION) 200,007,005(30,025,532)
4,199,043 58,799,192 52,547,746 47,217,746 7,217,746
Our Business Plan (Projected)
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6.2.5 Rural Electrification Agency (REA)
The mission of REA is to provide access to reliable and affordable electricity
supply for the rural dwellers irrespective of where they live and what they do, in
a way that would allow for reasonable return on investment through
economically responsive tariff which is supportive of the average rural customer
The Rural Electrification Agency was established in accordance with Section
88 of Electric Power Sector Reform Act (EPSR) 2005 with the Corporate
Headquarters in Abuja and six (6) zonal offices in Oshogbo (South West Zone),
Enugu (South East Zone), Lokoja (North Central Zone), Dutse (North West
Zone), Bauchi (North East Zone), and Calabar (South South Zone) and a liaison
office in Lagos. It was inaugurated on 16th March, 2006 in accordance with the
provisions of Section 88 of the Electric Power Sector Reform Act. The Agency
was established to perform three essential functions namely:
To promote Rural Electrification in the country, so that each Nigerian shall
see the light of the day.
To set up and manage Rural Electrification Fund
To co-ordinate Rural Electrification activities in the country
The Rural Electrification Agency inherited a total of 2,269Nos Rural
Electrification projects from the Federal Ministry of Power.
The Agency also awarded a total of 153Nos Grid Extension and Off-
grid Extension projects in Year 2008.
Achievements of the Agency
Since the establishment of the Agency, some of the giant strides taken are
follows:
Creation of six functional zonal offices across the country and a liaison
office as follows:
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Dutse - North West Zone
Bauchi - North East Zone
Lokoja - North Central Zone
Enugu - South East Zone
Calabar - South South Zone
Osogbo - South West Zone
Lagos – Lagos liaison office
Setting up a Rural Electrification Fund as required by the EPSR Act, 2005.
Verifying and appraising on-going projects taken over from the Ministry for
continued execution and completion
Liaising with the various stakeholders including States and Local
Governments on existing plans and strategies for Rural Electrification in
their respective territories
Initiated the conduct of studies for development of baseline data on
National Rural Electrification
Developing prototype rural electrification network designs and review of
existing on-going projects for expedited completion
Exploring fuel/energy saving options in power generation using renewable
energy technologies and the conversion of flared gas (where available) to
electricity
Promotional activities to mobilize rural communities preparatory to the
initiation of the Agency‟s off-grid/renewable energy programme
Many communities where on-going projects had substantially advanced
were also sensitized towards formation of Rural Electricity Users
Cooperative Societies (REUCS)
To date a total of 323Nos of the on-going projects have been completed
leaving a balance of 1,946Nos at different levels of completion
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A total of 106No of the grid and off-grid projects awarded by the Agency
in Year 2008 have been completed leaving a balance of 47Nos. at
difference stages of completion
Plans, Strategies and Targets of REA Activities
The Agency has mapped out plans to ensure that its mandate on delivery
of rural electrification is accomplished. As a result, it is embarking on the
following:
Completion of the 1,946Nos. on-going rural electrification
projects nationwide through aggressive pursuit of strategies for
raising funds
Completion of 47Nos Grid and Off-grid projects awarded by the
Agency in Y2008.
Execution of the second phase of the off-grid renewable energy
programme of the Agency
Completion of the legal processes; institutional framework and
formation of Rural Electricity Users Cooperative Societies in target
communities where completed Federal Government rural
electrification projects are located
Growing the Rural Electrification Fund by sourcing for more
contributors to the fund and investing available principal in low
risk financial ventures
Aggressive promotion of projects to seek partners with the
Agency on identified projects under the Public Private Partnership
arrangement as contained in the Act
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Extensive dialogue with Chief Executives of successor companies
of PHCN on improved services delivery to rural customers on
terms and conditions that are mutually favourable.
Dialogue with NERC on prompt establishment of the Power
Consumers Assistance Fund to support the underprivileged.
Completing the development of a Rural Electrification Master Plan
for Nigeria in conjunction with Japanese International Co-
operation Agency (JICA).
Building capacity (through education and training) on efficient
and productive uses of electricity; sensitizing promoters on
investment potentials in rural electrification as an engine for
driving small and medium scale industries.
THE CHALLENGES OF THE RURAL ELECTRIFICATION AGENCY
Insufficient project vehicles for monitoring and
supervision of over 2,000 rural electrification projects
across the country.
A total of N40.5b is required to complete our on-going
rural electrification projects.
Yearly Insufficient appropriation to complete on-going
projects.
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PRESIDENTIAL TASK FORCE ON POWER:
The Mandate of the Presidential Task Force on Power (PTFP) is to • Fast-track improvement and predictability in electricity availability to Nigerian homes and businesses. • Take irreversible steps to promote medium to long term sustainable growth of the Nigerian electricity supply industry. • Restore the consumers‟ confidence in the Nigerian Electricity Supply Industry
• Establish and implement an effective consumer protection system • Make every Nigerian electricity consumer a customer that is responsible and complies with tariff and service obligations • Establish a competitive power procurement framework that delivers increased generation to meet increasing customer demand • Identify all sources of available excess captive generation in the country and develop a fast-track framework for making such accessible to consumers • Establish and sustain effective communication with power stakeholders and the Nigerian public across the entire span of the Action Plan COMPOSITION OF PTFP The PTFP is headed by a Coordinator, Engr. Ottih John Ottih and comprises of the following units: (A) Performance Monitoring Team on Fuel-to-Power (B) Performance Monitoring Team on Generation (C) Performance Monitoring Team on Transmission & System Operations (D) Performance Monitoring Team on Distribution & Market Operations (E) Performance Monitoring Team on National Integrated Power Project
(F) Performance Monitoring Team on Regulatory & Transaction Monitoring (G) Performance Monitoring Team on Labour (H) Institutional Continuity, Finance and Administration Unit (I) MIS/Technical Support Unit (J) Project Monitoring Unit Unit
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OPERATIONS OF PTFP The various units of the Presidential Task Force on Power are integrated multi-disciplinary team of experts assembled to monitor, analyze, recommend and facilitate ways to ensure improvement on power sector demand on short, medium and long term basis. The various units have Senior Performance Monitors (SPM) and Heads as team leaders to ensure that tasks and targets of each team are delivered.
(A) FUEL-TO-POWER (FTP) TEAM To guide the team in achieving the PTFP objectives, the mandate of the FTP team and related targets are: · To establish current status of gas supply and pipeline transmission network including ongoing projects and planned activities related to gas-to-power sector. · Interact with NNPC Gas and Power Directorate, Gas Aggregation Company of Nigeria (GACN), gas supply companies (IOCs and NPDC) and NAPIMS to collate and analyse data. · To gather, collate and analyse daily demand and production data from Power Holding Company of Nigeria (PHCN) and Nigeria Gas Company (NGC) with a view to establishing gas availability and areas of potential shortfall. · To identify issues relating to meeting the immediate gas demand need of PHCN and undertake effective monitoring of the supply and demand chain. · To develop a plan of action to mitigate gas shortages if any, resulting from increased demand from rehabilitation of PHCN power plants and commissioning of NIPP‟s. · To review ongoing power projects and their impact on the gas supply chain and recommend areas of improvement that will ensure the availability and sustainability of Gas supply to Power. · To report to the PTFP on key project risks and issues relating to gas
supply and infrastructure plans and implementation as well as identify and recommend measures to ensure that the network has sufficient capacity to meet current generation demands and ensure stable and secure supply of fuel in the medium and long term. · To explore and recommend alternative fuels/energy including but not limited to coal, solar, wind and nuclear, for medium and long term power needs of Nigeria. · To establish a clear understanding of the dependencies between fuel, generation, transmission and distribution and the other links in the electric power supply chain.
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· Provide the PTFP with timely and accurate reports on the information gathered and activities conducted above, with clear recommendations on interventions required in order to meet the objectives of the Presidential Action Plan on Power; and · Work with and support other Teams within the Presidential Task Forceto ensure that the objectives of the PACP are met. (B) GENERATION TEAM The principal role of the Performance Monitoring Unit on Generation is to: · Gather and collate information on all power generation projects (in both
the public and private sectors) particularly as they concern planned or new generation, rehabilitation and maintenance activities. · Track the ongoing activities of the power generating companies, monitor the activities and associated work plans of the management of the generating companies and monitor the inspection of generation projects and related project activities conducted by the Ministry of Power and PHCN. · Be responsible for ensuring that generation projects, including those pertaining to new generation, rehabilitation and maintenance, are executed to time and quality. While the detailed monitoring and control will be undertaken by the Ministry of Power and PHCN, the Performance Monitoring Unit (Generation) has a planning oversight role related to the efficient execution of the PTFP plan and, more specifically, to critical path projects designated as such for the attainment of the Plan‟s objectives. · Submit recommendations to the PTFP on rewards, incentives and sanctions for the management of generation companies. · Provide the PTFP with timely, accurate, and ongoing reports on the information gathered and activities conducted in the power generation area, with clear recommendations on which projects, maintenance and rehabilitation and other activities should be prioritized or not, and which intervening actions should be taken by the PTFP and PACP, in order to meet the objectives of the
Presidential Action Plan on Power. · Report on key project issues that are escalated from the Ministry of Power and PHCN relating to plans and implementation and key risks and issues that might affect the implementation of projects. This will involve ensuring that linkages and dependencies are managed effectively, that procurement and finance challenges are addressed and that options for resolution/mitigation in the short and longer term are identified. · Obtain a clear understanding of the dependencies between the generation sub-sector and the other links in the electric power supply chain.
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· Work with and support other Performance Monitoring Units, particularly the Performance Monitoring Unit (National Integrated Power Projects), to ensure that the objectives of the Presidential Action Plan on Power are met, and · Help to communicate the priorities of the PTFP to the key stakeholders in the generation sub-sector. (C) TRANSMISSION TEAM The responsibilities of the transmission team of PTFP are as follows: · Qualitative service to customers (Gencos, DisCos) · Good corporate governance
· Provision of accessible, reliable, stable and affordable service. · Evolve ideas in operating the transmission grid optimally, collate and analyse transmission system data. · Monitoring of all on-going transmission projects and the performance of Transmission and System Operations. · Analyse and advance recommendations to enhanced grid structure. · Make inputs to budgetary allocation and engage with TCN management to resolve issues hindering their output. · Escalate all transmission and system operations roadblocks to PTFP and PACP. · Evolve ways to improve Transmission and System Operations performance and also drive and monitor the transmission targets on the Presidential Road Map on Power. · Make inputs to appropriate system reinforcement projects through concise gap analysis. · Engage TCN in resolving power issues escalated by distribution companies. · Interface with the Distribution team in PTFP to smoothen out all Transmission Distribution interface issues (D) DISTRIBUTION TEAM The PTFP distribution team has the responsibility of developing programs and
strategies that will assist in: · Bridging distribution gaps to improve the overall distribution network capability, reliability and supply predictability. · Ensuring that every Kwh distributed is sold and the associated revenue collected, thereby increasing collection efficiency to set targets. · Ensure that all power generated and transmitted from the grid to the various distribution zones are distributed seamlessly in an effective and efficient manner.
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· Reducing aggregate distribution losses (technical & non-technical) and improving customer care service delivery and take customer satisfaction to the next level. · Identify the revenue gap, develop strategies for improvement in revenue collection and monitor and evaluate performances in revenue generation and collection. · The baseline for the Distribution team therefore was to establish the bottlenecks, challenges and the associated gaps on the distribution network (Technical & Commercial) to be addressed within the short and medium terms while, long term issues were expected to be handled at the post privatization
stage. (E) NIPP TEAM The activities of this Unit include the following: · Monitor the progress and performance of each Project very closely and follow-through to their commissioning on schedule. · Observe, investigate and report all process and system gaps in the management of each project and take actions to improve performance. · Engage with other interface agencies to resolve all roadblocks and bottlenecks and facilitate project progress. · Report and escalate all identified risks that can work against scheduled project delivery and take actions to mitigate their impact. · Carry out any other assignments which would assist the NDPHC/NIPP to deliver the projects on schedule. (F) REGULATORY & TRANSACTION MONITORING TEAM the Team‟s mandate was to work primarily with BPE and other agencies on the following: · Prepare a Power Sector Reform programme working paper that sets out its appreciation of the entire divestiture process,
relevant players, cross-cutting issues and their priority and critical actions and timelines for their completion; · Prepare a Divestiture Transaction Strategy for the approval of the relevant authorities and Shortlist and procure Transaction Advisers to put in place a Management Contract for the Transmission Company of Nigeria; · Undertake pre-transaction processes with its external Advisers, the PHCN successor companies and other stakeholders (essentially these would be mostly regulatory, corporate, technical and commercial actions in the various Successor Companies to be divested, e.g., the
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implementation of a workable deal on pensions and severance liabilities and the establishment of Successor Company boards of directors); The unit also worked with NERC on the issues of; producing and gazetting regulatory documents that were fundamental to the commercial success of any transaction and a viable future of the industry itself, being essentially the financial model for the entire sector, must be effective in taking account all economic and commercial indices that drive the sector. It should therefore be enforceable, sustainable and conducive to the commercial viability of the sector; while the Bulk Trader‟s license must enable it to enter into vesting contracts and PPAs that
give certainty to counterparties as well as minimize risk and are fully enforceable. · Considering other regulatory matters such as the Market Rules, Grid Codes, arbitration rules, licenses to be issued to successor companies, etc and determine whether they need to be modified at this Stage (G) LABOUR The team was set up to consult and discuss with PHCN management and labour union of PHCN on a proper working relationship with the privatization process. The team's mandate is as follows: · Ensure that issues and challenges with PHCN management and PHCN staff are treated. · Proposed securing funds to settle severance. · Set up 1st round of negotiations with relevant bodies. · Engagement of HR, biometric, payroll, and actuarial consultants. · Identification and disengagement of excess PHCN staff. · Set up 2nd concluding round of negotiations with relevant bodies. · Payment of severance and transfer of retained staff · Handover to successor companies.
(H) INSTITUTIONAL CONTINUITY, FINANCE & ADMINISTRATION The activities of this Unit include : · To ensure effective transition of the activities and achievements of the Task Force to the designated institutions of the Federal Government at the end of the tenure of the Task Force. Ensure sequential reports submitted to PACP meetings, considering the performance and identified outstanding issues as related to the Task Force. · Ensure that activities of the Task Force are in full compliance with all Federal Government policies and practices.
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Objective and target in terms of performance and challenges of the task force. · To ensure consistent adherence to administrative policies and procedures as stipulated by the civil service rules. · To ensure that accurate and measurable value is received for all expenditures made by PTFP by evolving and working out the variable templates and metrics. · To monitor all procurement activities to ensure compliance with stipulated quality, timeliness and cost. Budget performance and spending pattern of funds.
· To provide Secretariat support to the PTFP, i.e. activities of all units, considering staff performance, challenges, mitigation and recommendations. The Unit which was led by a Head had its day to day activities carried out by three sub-unit (Administration, Finance and Institutional Continuity). (I) MIS/TECHNICAL SUPPORT UNIT The Unit is responsible for the following: · Manage the total IT infrastructure of the PTFP and ensure internet services availability. · To provide first line of end user support services and to train and support PTFP staff in the use of ICTS. · Provide database management systems to track status of power sector road map projects and ensure the PTFP‟s website is up-to-date and design, develop and deploy web based solutions and technologies. · To secure all PTFP information assets are managed with relevant data and statistics software. · To specify and recommend a procurement of all PTFP ICT assets.
(J) PROJECT MONITORING UNIT The PMU was set up to: · Facilitate the timely and well-structured flow of information between the various teams. · Ensure that the strategies, priorities, and implementation plans prepared by the sector teams are properly collated. · Review the quality and assure the strategies, priorities and implementation plans prepared by the various team.
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· Identify and highlight interdependencies between the work plans of all the sector teams. · Combine and synthesise the work plans of the seven (7) Sector team into a composite “Statement of Strategic Priorities‟‟. · Identify key risks which will have a bearing on the success of the overall programme of activities and develop appropriate risk resolution and risk mitigation strategies. · Provide strategic advice on a range of issues including but not restricted to: issues management and media relations; investor relations; and relations with donor agencies and development finance institutions.
VII OVERVIEW OF THE POWER SECTOR
7.1 Providing access to affordable and reliable electricity to all citizens of
Nigeria is a critical national goal of the Federal Government of Nigeria. This is in
view of the fact that without adequate and reliable electricity supply, our socio-
economic goals of alleviating poverty, creating jobs and wealth as envisaged in
the Transformation Agenda cannot be achieved.
7.2 Historically, electricity supply in Nigeria dates back to 1886 when two
generation sets were installed to serve the colony of Lagos. By 1951, the Act
establishing the Electricity Corporation of Nigeria (ECN) was enacted. This was
followed by another Act establishing the Niger Dams Authority (NDA) in 1962 to
develop hydro electric power. The merger of the two organizations in 1972 gave
birth to what was known as the National Electric Power Authority (NEPA).
Between 2001 and 2005, changes to the erstwhile Electricity and National
Electric Power Act removed the monopoly status granted NEPA over generation,
transmission, distribution and marketing of electricity. The reason for the
amendments was to pave the way for liberalization and in effect, introduce
competition and hence efficiency. However, this did not materialize.
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7.3 A comprehensive review of the policy, legal and regulatory framework led
to the formulation and drafting of the National Electric Power Policy (NEPP) and
the Electric Power Sector Reform (EPSR) Act, which were adopted and enacted in
2011 and 2005 respectively. The latter provided the basis for the transformation
of NEPA into Power Holding Company of Nigeria (PHCN), and the unbundling of
PHCN into eighteen (18) successor companies, six (6) generation companies as
Kainji and Jebba Hydro Electric Power Plants were incorporated as a single
entity; One (1) transmission and eleven (11) distribution companies. The
unbundling of PHCN was a strategic step towards creating a competitive
electricity market.
7.4 In pursuit of Government‟s goal to develop a sustainable power sector that
will support the socio-economic needs of the nation and the quest for the
emergence of Nigeria as one of the 20 most developed economies of the world
by the year 2020, the Federal Ministry of Power is focused on its mandate to
ensure that the Nation is supplied reliable and adequate power to achieve our
vision as a country. This will be achieved through earmarked projects currently
being implemented by the various Agencies under the supervision of the Ministry
across the power value chain-generation, transmission, and distribution as
attracting private investment in the sector.
7.5 A strategic plan was vigorously pursued in 2009 which benefited from an
emergency funding intervention by all tiers of Government in addition to the
Budgetary Appropriation to make good the primary objective of increasing
electricity supply and its reliability to drive National socio-economic aspirations of
job creation and increase welfare of the Nigeria citizenry. Other objectives the
Federal Government set to achieve with the intervention include:
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Diversification of generation beyond gas and hydro, which are presently
the dominant sources of power generation;
Improved security and reliability of electricity services;
Improved operational efficiency and sector viability; and
Increasing access to electricity.
VIII. CHALLENGES IN THE NIGERIAN POWER SECTOR
8.1 The key challenges militating against the efficient delivery of adequate and
reliable electricity supply in Nigeria are as follows:
Highly Capital Intensive – nature of power sector projects: In this
regard, public sector funding is inadequate due to competing demands.
Inadequate Power Generation Capacity: In comparison with other
countries, Nigeria‟s average daily generation of 3,700MW is grossly
inadequate for a population of over 160 million people. Factors affecting
the generation capacity include old/ageing power plants (3 hydro & 3
thermal plants are over 20 years old, 1 thermal plant is 10 -20
years, while only 3 thermal plants are less than 10 years old),
vandalization of existing power infrastructure, gas supply constraints and
inadequate maintenance of equipments that stem from procurement
bottlenecks, dearth of skilled maintenance personnel in the sector and the
dependence on imports of parts and foreign experts to effect repairs and
overhauls.
Transmissions and Distribution Networks: are currently inadequate
and inefficient in wheeling and distributing generated power, with high
transmission losses.
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Inefficient Billing and Metering System: One of the major challenges
facing the Nigerian Power sector is the low efficiency in billing and revenue
collection by the Distribution Companies (DISCOS).
Sector Reforms: Areas of focus include strengthening industry
regulations, industry and market structure appropriate electricity pricing
development of commercial framework to support private investments,
effective setting of competition amongst the successor companies, and
efficiency improvement in reducing technical and non technical issues.
8.2 It is gratifying to note that the present Administration has put the
necessary machinery in place to address all the above challenges. The
plans/strategies in that respect are provided below:
IX. STRATEGIC GOALS / PLANS
9.1 The strategic priorities for the power sector to address the critical issues
and challenges identified in the Nigerian electricity industry are as follow:
a. Optimization of Existing Assets (Rehabilitation): Overhaul and
rehabilitation of existing power generating plants as well as rehabilitation
and expansion of transmission and distribution infrastructure.
b. Building New Capacity (On – going Projects): Completion of the on-
going National Integrated Power Project (NIPP) and encouraging
Independent Power Producers (IPP) to increase capacity.
c. Energy Security: Achieving energy supply security by utilizing the
Nation‟s other energy resources (including coal, crude oil, wind, solar,
small & medium hydro, biomass and nuclear) to diversify the energy
generation mix.
d. Attracting Private Investments in the Sector: The EPSR Act, 2005
provides for the deregulation of the Power sector to attract private
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investors in generation and distribution. In order to catalyze the inflow into
the industry of private sector investments and accompanying managerial
and technical expertise, the following steps are being taken:
Establishment of an Appropriate Pricing Regime;
Establishment of the Nigerian Bulk Electricity Trading Company PLC
(NBETC) as Bulk Purchaser;
Provision of Government Credit Enhancement;
Operationalising the Nigerian Electricity Liability Management
Company (NELMCO); and
Reaching Agreement on all Outstanding Labour Issues
e. Consolidating On-going Reforms Process: Efforts are being made to
consolidate the on-going structural and economic reforms targeted at
establishing effective institutional and regulatory frameworks in the power
sector.
f. Promoting Energy Efficiency: Introducing demand side management
principles, embarking on public enlightenment campaigns, as well as
advocating for the use of energy saving equipment to reduce power
demand at home and industry
X. MAJOR ACHIEVMENTS IN THE POWER SECTOR.
10.1 Institutional Framework
In order to deliver on the promise of Mr. President “to improve
electricity availability to Nigerian homes and businesses within a short time
frame”, the Federal Government established a Presidential Action
Committee on Power (PACP) and a Presidential Task Force on Power
(PTFP). PACP, under the Chairmanship of Mr. President, has been
providing leadership and guidance for the Power Sector development as
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well as determining the general policy directions and strategic focus of the
power reforms. The Presidential Task Force, under the Chairmanship of
the Special Adviser to the President on Power, has been developing and
driving forward the Action Plan for the Nigerian Power Sector with
achievable targets within the lifespan of this Administration. The Task
Force reports to Mr. President and the PACP on a weekly basis.
10.2 GENERATION:
A total of 1,494,590.6MWH of energy has been generated as at
November 2011, surpassing those recorded in previous years. (See the
histogram above).
Load factor average of 0.674, signifying that 67.4% of the available
capacity was actually sent to the consumers.
Generation Utilization Index average of 0.647 for the year, showing that
64.7% of the available capacity was actual generation.
Capacity Utilization index averaging at 0.615 implies that the station made
available 61.5% of the installed capacity.
Station Reliability Index at an average of 0.648 for the year, shows that
the three (3) units in the station ran for 64.8% of the time in 2011.
Planned Maintenance Index average of 1.0 shows that all the routine
preventive maintenance activities were carried out.
Breakdown Maintenance Index average of 0.599, had the implication that
59.9% of the breakdown/defects were rectified.
Service Level Commitment: The station on the whole meets up with its
service level contractual obligation.
Minor Inspection GT11, GT12, and GT13: This was completed this year, by
Siemens the OEM, ensuring the plant availability for the next 4000 to
8000EOH.
Training of staff both locally and foreign. This has equipped the staff on
Technical and managerial capability but further plant specific trainings are
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required to improve diagnostic skills in plant maintenance. In liaison with
the OEM identified skill gaps have been passed on to NAPTIN for
coordination and funding.
Computerized Maintenance Management System (CMMS) was installed to
improve on the former MMS which was manual based. This has ensured
the availability and reliability of the plant. This also, has improved the
management and the early commencement of work. With the CMMS, the
daily routine inspection and planned maintenance Inspection (weekly,
monthly, quarterly, bi-annual, and annually) and implementation of the
manufacturers maintenance specification has helped to sustain availability
and efficiency of the plant.
In tandem with the CMMS is the computerization of the store which will
improve our inventory management. The two systems will later be
connected to broaden the scope of the CMMS;
Annual maintenance, repair of water leakages from the head cover
assembly, exciter flash over repair work were all carried out on 1G12
thereby restoring the unit back to service.
Repair of unit 1G9 runner inspection door, installation of main guide
bearing and repair of 16KV circuit breaker were all carried out.
Welding of the cracked throat ring/ runner chamber, repair of the head
cover assembly and annual maintenance were carried out on unit 1G6 in
order to restored the unit back after being shut down on emergency due
to excessive water leakage from the runner throat ring.
Enhanced plant maintenance activities were carried out by the application
of effective maintenance management system (MMS) for plant sustenance.
Improved company asset base as a result of infrastructural rehabilitation
carried out.
Provision of incentive, innovation and human capacity development for the
company staff thus enhancing good management/staff relationship.
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10.3 Reform Programme
In consonance with the Roadmap unveiled by the President of the Republic of
Nigeria on Thursday, 26th August, 2010 “to ensure modest but genuinely
realizable improvements in the amount and quality of electricity supplied to
consumers in the country”, all the Distribution Companies are being
privatized based on a core investor sale of a minimum of 51% of the
Government‟s equity in the companies. The PHCN successor thermal plants are
also being privatized via the sale of a minimum of 51% of the Government‟s
equity in the companies. The PHCN successor thermal plants are also being
privatized via the sale of a minimum of 51% equity to core investors that clearly
demonstrate the technical and financial ability to operate and expand each plant;
while concessions are to be granted for the operation of the hydropower
generating plants at Jebba, Kainji and Shiroro. In addition, necessary steps are
being taken to hand – over the Transmission Company of Nigeria (TCN) to a
credible private sector Company under a five – year management contract.
10.3 Optimization of Existing Assets
In order to recover lost capacity and sustain the running Units, the existing
power generating plants are being overhauled and rehabilitated prior to their
privaitisation. Also, the rehabilitation and expansion of some transmission and
distribution infrastructure have been completed while some others are on –going
10.4 Building New Capacity
Concerted efforts are being made to complete the on – going National
Inatergrated Power Projects (NIPP) at Alaoji, Calabar, Egbema, Ihovbor, Gbarain,
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Sapele, Omoku, Geregu, Omotosho and Olorunsogo. In addition, the
Independent Power Producers (IPP) are being encouraged to increase capacity.
Energy Security
One of the strategic priorities of the present Administration is the achievement of
energy supply security by utilizing the Nation‟s other energy resources (including
coal, crude oil, wind, solar, small & medium hydro, biomass and nuclear) to
diversify the energy generation mix. To enhance energy security, given that the
power industry in Nigeria is predominantly driven by gas, the Federal Ministry of
Power identified the following projects for implementation, which commenced in
2009 and are currently at various stages of completion.
i) Coal – Fired Power Plants: Detailed studies by Consultants are in the
process of being completed to ascertain the commercial quantity of coal
available for the development of such a plant at any of the potential sites in
Enugu, Benue, Kogi and Gombe States.
ii) Small and Medium Scale Hydro Power Plants: Feasibility studies and
Environmental Impact Assessment (EIA) for the development of 12 identified
sites for small & medium hydro power projects for both on – grid and off –
grid generation are on – going. The projects will include the installation of
turbines and generators in existing dams to generate electricity [e.g.
Dadinkowa (34MW), Oyan (9MW), Ikere Gorge Dam (6MW) and Bakolori
(3MW)]
iii) Kaduna Power Plants Projects (21.5MW): As part of the intervention
towards resolving the acute shortage of electric power across the country
and in consideration of the persistent challenges of gas supply to existing
thermal power stations, the Federal Government adopted a strategy of
exploiting alternative fuels for power generation. In this respect,
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Government awarded a contarct in favour of a consortium of GE / Rockson
Engineering Ltd for the establishment of a 215MW (ISO) power plant in
Kaduna. The primary fuel would be initially Low Pour Fuel Oil (LPFO) but the
plant is expected to switch to natural gas when the necessary gas
transmission infrastructure is eventually extended to Kaduna. The selection
of Kaduna for the project was based on the availability of Low Pour Fuel Oil
(LPFO) from Kaduna refinery and the technical imperative of balancing the
national transmission grid. The project was awarded to the consortium on
EPC basis and the Work Plan indicates that the project would be completed
in 2011.
iv) 10MW Katsina Wind Farm Project: In line with the Government policy of
promoting renewable energy, a wind resources mapping for the entire
country was undertaken by Messrs Lahmeyer International in the year
2006. The final Report indicated numerous viable sites for the deployment of
wind turbines for power generation. In order to flag off the exploitation of
the Nation‟s resource forpower generation, a contract was awarded for the
establishment of the Nation‟s first wind farm to be located at Katsina in
favour of Messrs Vergnet SA of France. With an installed capacity of 10MW,
the completed plant is expected to supplement the electric power supply
available to the community and showcase the wind technology for potential
investors. The project is scheduled for completion in 2011
v) Mambilla (2, 600MW) Hydroelectric Power Project: The Mambilla
HEPP is one of the major projects expected to significantly increase the
security of supply of power in the country. The project is planned to consist
of a 2,600MW base load hydroelectric power plant with a completion period
of 5years. Lahmeyer International was engaged to undertake a detailed
review of the feasibility study on the project and to prepare a bankable
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report and tender documents for eventual implementation. Another essential
study towards the realization of the Mambilla project is the definition of the
HV Transmission Line for the generated power. The project, which was
undertaken by Messrs Colemnco Power Engineering Ltd has been
completed on scheduled and is expected to provide the base data for the
design of the High Voltage lines from the Mambilla power house to be
located at Abong to Jalingo and Makurdi. The Policy direction of Government
is to vacate all existing contractual commitments on the projects and
complete all the on – going preliminary studies by the 1st Quarter of 2011.
(i) Zungeru (700MW) Hydroelectric Power Project: The Zungeru
Hydroelectric Power Project was conceived as a 950 MW power plant
on the basis of feasibility studies conducted in the 1980s. In view of
the passage of time, Messrs Coyne Et Bellier was engaged to review
1983 feasibility study earlier prepared by Messrs Chas T. Main
International. Messrs Coyne Et Bellier has since submitted the
review report indicating that the optimal capacity of the project shall
be 525MW with the possibility of future expansion to 700MW Though a
contract for the implementation of the 950MW project was awarded in
April 2007 in favour of Messrs CNEEC, the Ministry is in the process
of re-negotiating the contract in line with the revised scope and
recommendation of Messrs Coyne Et Bellier. The Consultant has
since prepared technical specifications and EPC tender documents for
the project and it is currently being reviewed by the Ministry. The
Ministry has also initiated the process of procuring a Consultant for the
conduct of an Environmental Impact Assessment (EIA) for the project.
10.3 Attracting Private Investments in the Sector
The EPSR Act, 2005 provides for the deregulation of the power sector to
attract private investors in generation and distribution. In order to
catalyze the inflow of private sector investments and accompanying
managerial and technical expertise into the industry, the following steps
have been taken:
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(i) Establishment of an Appropriate Pricing Regime: It is
noteworthy that for the sector to be financially viable throughout
the value chain, the end-user tariff (which is currently significantly
below what is necessary for the sector) must at least be at a cost-
reflective level. Consequently, the Nigerian Electricity Regulatory
Commission (NERC) embarked on a major review of the Multi-Year
Tariff Order (MYTO) with a view to developing an appropriate Tariff
Structure taken into consideration the need for cost recovery in the
industry.
(ii) Establishment of the Nigerian Bulk Electricity Trading
Company PLC (NBETC) as a Bulk Purchaser: The Company
was incorporated to carry out contract management and bulk
trading (on behalf of the Distribution Companies). NBETC is a
transitional entity until the DISCOs attain credibility and credit
worthiness.
(iii) Provision of Government Credit Enhancement: In entering
into Power Purchase Agreements (PPAs), Independent Power
Producers (IPPs) will require that there is a creditworthy
counterparty at the other side of the table. In this regard, the
Federal Ministry of Finance is reviewing a set of options through
which the Federal Government may provide credit enhancement to
the bulk purchaser that will enter into PPAs with the successor
generation companies and IPPs.
(iv) Operationalising the Nigerian Electricity Liability
Management Company (NELMCO): Efforts are being made to
fully operationalize NELMCO which was established as a special
purpose vehicle to assume and manage extant assets, liabilities and
other obligations that could not be easily transferred from the
Power Holding Company of Nigeria (PHCN) to any of the Successor
Companies.
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(v) Reaching Agreement on all Outstanding Labour Issues: The
Federal Government recently engaged in active dialogue with the
leaders of the Labour Unions on the settlement of outstanding
monetization arrears and severance pay. Other outstanding labour
issues are currently being addressed by an inter-Ministerial
Committee, under the Chairmanship of the Honourable Minister of
Labour and Productivity.
10.4 Capacity Building in the Power Sector
The growth of the power sector and the introduction of new technologies
have necessitated an urgent need to develop the human capital that would
efficiently operate, maintain and manage the power sector. In this regard,
the National Power Training Institute of Nigeria (NAPTIN) was developed
to address the manpower needs of the sector, with the existing seven (7)
Regional Training Centres (RTCs) forming the core of the take-off facilities.
Two (2) additional RTCs are currently being developed at Oji and Kano.
Between June 2009 when NAPTIN commenced training and December
2010, NAPTIN has succeeded in providing capacity building training
programmes for 2,716 PHCN personnel in various areas of electricity
production chain.
10.5 Operational Performance
Generation
It is gratifying to note that power generation in the country stabilised over
the past one year. Also, the highest Peak Generation of 3,804.3MW
in the history of the power sector was achieved on 5th August,
2010.
Transmission
The power sector has witnessed improved transmission capacity and
reliability. In the last year, capacity of the system was increased, the
amount of power that moved through the system increased by 25%, and
the number of system collapses was reduced from 17 to 13. Large scale
improvements in the infrastructure include:
986.5km of 330kV lines out of which most have been 50% completed.
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705.3km of 132kV lines out of which 396.8km are above 50% completion.
1350MVA transformer capacity at 330/132kV are being installed in new substations of which some 900MVA are more than 50% completed.
3000MVA capacity of 132/33KV transformers are being installed in new substations of which 960 MVA are more than 50% completed.
Distribution
There has been a marginal increase in the distribution capacity. By 31st
December, 2010 it was over 19,163.89MVA (16,289.31MW).
10.6 Investors’ Comfort Framework
In line with the vision of a private sector-led electricity industry in Nigeria,
the Nigerian Electricity Regulatory Commission (NERC) earlier in the year
instituted a major review of the Multi-Year Tariff Order (MYTO). The intent
was to bring commercial viability to the sector by introducing economic
pricing for power. The MYTO major review is continuing, and is expected
to be completed in the first quarter of 2011. On completion, consumers
will be required to pay tariffs which actually reflect the costs of the
electricity they use. This in turn, will allow the private sector, operating at
reasonable levels of efficiency, to realise the returns on investment
required to attract investments in the sector.
10.7 Renewable Energy The deployment of renewable energy technologies for electricity
generation in Nigeria had been low. However, the Government in 2010
started to pay more attention to these energy sources, particularly in
smaller urban centres and rural areas. Projects included:
15kW solar pilot project at OGD farm settlement in Idekan, Ogun State was completed and handed-over on 19th March, 2010;
15.79kW Kindigi solar project in Katsina State is 60% completed; 17.5kW Gaza solar project in Shira LGA of Bauchi State is about
to start producing power; and
17.5kW solar electrification of Esham Community in Ogoja LGA of
Cross-River State is 85% completed.
10.8 Private Investments
The activities of the Standing Committee (which was established by the
Ministry in November 2009 to facilitate the coordination, licensing and
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review of the business models of private sector investors in the power
sector) were intensified in 2010. Private sector participation in power
generation in the country has been in geometric progression. Between
2006 and 2009, a total of 34 Companies had been licensed as
Independent Power Producers (IPPs). Of this, eight have commenced
commercial operation as follows:
On-Grid Generation. (1,876MW Installed Capacity)
Okpai – 480MW
AES – 270MW
Omoku – 150MW
Afam VI (Shell) – 650MW
Ibom Power – 190MW
Trans-Amadi – 136MW
Off-Grid Generation. (114.82MW Installed Capacity)
Notore Power – 25MW
Energy Company of Nigeria (ENCON) – 89.82MW
In 2010, more than 40 prospective investors had made presentations to
the Ministry and several have started the process to obtain licenses. With
the establishment of the Bulk Purchaser, the signing of Power Purchase
Agreements, the N300 billion in loans being made available by the Central
Bank of Nigeria and the securitization arrangement being made by the
Federal Government, many companies are being encouraged to invest in
the sector.
10.9 Power Purchase Agreements
A number of Power Purchase Agreements (PPAs) were being discussed
between some IPPs and the Federal Government. These included:
Shell Petroleum Development Joint Venture (650MW plant at Afam VI).
Ibom Power PLC (691MW out of which 190MW is already producing commercially).
Chevron Nigeria PLC Joint Venture (500MW plant at Apura). Exxon Mobil Joint Venture (350MW plant at Qua Iboe).
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Total Elf Petroleum Nigeria Limited Joint Venture (500MW plant at Obite).
First Independent Power Limited (150MW plant at Omoku, 136MW plant at Trans Amadi, and 75MW plant at Eleme).
10.10 Labour Issues
The Government is committed to settling all legitimate workforce
entitlements and negotiates the position of workers under the newly
reformed power system. As a demonstration of Government‟s commitment
and sincerity to the reform process, payment of monetization arrears to
the staff of PHCN progressed as follows:
1 No. of Staff for Verification 46,108
2 No. of Staff Processed and Paid 43,226 (93.75%)
3 No. of Staff Cleared with Pending Issues
971
4 No. of Staff Cleared but being Reviewed
198
5 No. of Staff Yet to be Cleared 1,713
6 Amount Disbursed to Date N52.915 billion (94.43%)
7 Closing Balance N3.120 billion
10.14 US$100 Million Indian Line of Credit
The Government of India approved a US$100 million line of credit (2009-
2010) to Nigeria for the execution of the following projects:
Supply and commissioning of transmission line, 33KVA 330/415kV
distribution transformers and associated accessories for 96 Communities in the three Senatorial Districts of Enugu State (US$40 million);
Provision of 132/33kV Substation, Solar Mini-Grid electrification and solar street lighting in Kaduna State (US$29.85 million); and
Construction of 2x26MW gas-based power plant in Cross River State (US$30 million).
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10.11 Gas Supply Mechanism
The Ministry collaborated with the Ministry of Petroleum Resources, the Nigerian
National Petroleum Corporation (NNPC), and the International Oil Companies
(IOCs) to institutionalize the commercial framework for gas supply to PHCN
legacy plants. The Gas Supply Agreement (GSA) and the Gas Transportation
Agreement (GTA) were finalised. The following Gas Supply Aggregation
Agreements have either been signed or negotiations were concluded in 2010:
Pan Ocean (60 mmscf/day).
Shell Petroleum Development Company Joint Venture (350 mmscf/day). Chevron Nigeria Limited Joint Venture (550 mmscf/day).
10.12 Power Projects Completed in 2010
The following major projects were either commissioned or due for
commissioning in 2010:
650MW Afam VI Power Plant.
37 Japanese Grant-in-Aid Rural Electrification Projects (23 in Cross-River & 14 in Akwa-Ibom States).
367.5km of 330kv Transmission Line Connecting Jalingo, Taraba State to the National Grid.
2x30MVA 132/33kV Substation at Jalingo, Taraba State.
2x30/40MVA 132/33kV Substation in Talata-Mafara, Zamfara State.
1x150MVA 330/132/33kV Substation at Kumbotso, Kano.
1x150MVA, 330/132/33kV Substation at Mando Road, Kaduna.
2x60MVA 132/33kV Substation in Kubwa, Abuja.
60MVA, 132/33kV Transformer at Apo, Abuja.
2x30/40MVA 132/33kV Substation at Ado-Ekiti.
Ikot Ekong 2.5MVA 33/11kV Injection Substation in Ika LGA, Akwa-Ibom
State.
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10.13 Project Management Unit (PMU) The Project Management Unit in the Ministry is responsible for implementing projects financed by the World Bank. The PMU is currently managing three projects, all under implementation. These are:
a. National Energy Development Project (NEDP): The NEDP was
designed to strengthen the transmission and distribution systems and
initiate renewable energy pilots. The US$172 million project became
effective in November 2005 and will close in June 2012. It has
components for: Transmission, Distribution, Rural Access, Technical
Assistance, and NERC.
Among other projects, it has completed:
Supply of Instrument Transformers;
Substation Rehabilitation and Reinforcement;
Grid Metering;
Rehabilitation of Jos- Makeri 132 KV line;
Supply of Cables, Termination Kits, HT concrete pole, ring main units,
distribution boxes and fuses and150 mm2 Aluminum Conductors;
Supply and Installation of HT Metering Panels;
Supply of Primary and Secondary Injection Test Kits;
Supply of Surge Arresters & Transition Joints;
Feasibility Studies and Design of Off-Grid Solar PV Site;
Screening Study to Assess SHP Potential in Nigeria;
Solar Power Electrification of Fadama Communities in Ogun State; and
Conversion of LVDS to HVDS- Karu Feeder 1 Contract No: NCB 10 Lot 3.
b. Nigeria Electricity and Gas Improvement Project (NEGIP):
This US$600 million project was approved in June 2009 and became
effective in July 2010. The project aims to improve the availability
and reliability of electric power in Nigeria mainly by supporting gas
supply contracts through US$400 million in Partial Risk Guarantees
(PRGs) and US$200 million in complementary investments in
transmission and distribution systems. The project will assist the
Government of Nigeria (GON) in delivering more reliable power and
creating a healthier power sector. The proposed project will result in
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five distinct economic benefits: 1) incremental, reliable and improved
quality of gas supply; 2) reduction of power losses from generation,
distribution and the electrical grid; 3) improved power quality and
reliability, 4) improved financial health of the sector by helping
increased generation and income, and 5) enhance customer
satisfaction.
During the period under review, the project resulted in:
Rehabilitation and reinforcement of old 330/132kV and 132/33kV Transmission Sub-stations;
Reinforcement and rehabilitation of 33/11kV injection Sub-stations in all the 11 electricity Distribution Companies; and
Installation of 11kV Sectionalizers in Karu, Kubwa, LUTH, Ogba, Agege and Challenge HVDs Clusters.
c. Niger Basin Water Resources Development and Ecosystem
Management Programme: The main purpose of the project is to
rehabilitate the hydroelectric units at Kainji and undertake civil works at
Jebba dams. It became effective in December 2007 and on-going up to
2010. The project involved five countries along the River Niger. The
Nigerian portion of the Credit was US$135 million. In 2010, the project
had:
Commenced bidding for the rehabilitation of the power plants 5, 6 and 12 and the common systems at Kainji;
Commenced bidding for the supply and installation of hydrological equipment at Kainji and Jebba;
Awarded bids and started other processes for the supply of battery packs, machine tools and machines, the supply of spare parts, computer equipment and flood warning equipment;
Established teams to execute carbon finance initiatives at Kainji and Jebba; and
Awarded consultancy contracts for engineering supervision of the spillway at Jebba, the environmental action plan for Jebba and Kainji, and various other projects needed in conjunction with the upgrading for the two facilities.
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XI. PROSPECTS AND INVESTMENT OPPORTUNITIES IN NIGERIA
The Power Sector has been formally opened to investors to participate in the
generation and distribution of electrical energy in Nigeria, since the enactment
into Law, the Electric Power Sector Reform Act in 2005.
Government has further demonstrated its commitment to a stable, reliable and
affordable power supply to all Nigerians in Government pronouncements,
institutional and regulatory reforms programs, and has even gone further to
publish a Road Map towards the achievement of the said objectives.
One of the Key objectives and targets is the involvement of the private sector in
the overall development of power infrastructure, operations and maintenance.
To this end, various initiatives have been put in place, through regulation and
institutional reforms, which culminated in the request for Expression of Interest
(EOI) from investors willing to participate in power generation and distribution,
based on equity participation in existing assets as well as new infrastructure.
To this end, a lot of investment fora had been created by the Federal
Government through the Bureau for Public Enterprises, Road shows,
publications and the establishment of a One-stop-shop committee for IPPs in
the Federal Ministry of Power to amongst others:-
a) Provide the necessary information to investors on the institutional and
regulatory, Financial, Environmental issues and the steps required by
would-be-investors in establishing Independent Power Production in
Nigeria.
b) Provide linkage and contact persons in the various entities that will
interface with investors in the power sector.
c) To help investors to fast track processes and procedures required in the
licensing processes.
d) To perform other functions as may be required in ensuring a total
information flow to the investors is achieved as well as fast-track entry
Visas to Nigeria for the purpose of investors‟ access to Nigeria.
The „One-Stop-Shop‟ Committee for IPPS draws membership from Federal
Ministry of Power, Power Holding Company of Nigeria (PHCN), Federal Ministry of
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Finance, Federal Ministry of Environment, Central Bank of Nigeria and the
Nigerian Electricity Regulatory Commission (NERC).
NECESSARY STEPS REQUIRED FOR INVESTORS IN THE POWER
SECTOR.
The following steps are necessary for potential investors in the Power
Sector, especially in Generation.
i. Identify the type of generation that is; gas fired (thermal), Coal fired
Plat, Hydro, and/or Renewable Energy, including small and Medium
Hydro.
ii. Investors are required to perform a search and identify sources of
generation, e.g. Hydro site requires identification of suitable river
flows, Gas fired thermal Units must locate and confirm sources of
gas and be able to firm up this source via Gas Aggregation Company
of Nigeria or to other sources. Coal fired power plants must identify
coal sources and firm up supply.
iii. Investors must locate their plant on a land already acquired or
capable of acquiring with no encumbrances.
iv. Investors must perform Environmental Impact Assessment (EIA)
studies and be fully certified by the Federal Ministry of Environment
for environmental compliance and during the period, it is expected
that the issues of land acquisition and ownership, Community
related issues would have been solved.
v. Investors will perform power evacuation studies in liaison with the
Transmission Company of Nigeria (TCN) to ensure that there is
adequate power evacuation infrastructure as well as resolve issues
bothering on Common point of connection to the grid.
vi. Investors will be required to firm up and prepare their Business plan,
to include Capital investment, Operation & Maintenance cost
including fuel costs, etc. and come up with a total financial model
for their plant.
vii. There are various forms of waivers available for prospective
investors in Nigeria. The Nigerian Investment Promotion Council is
to provide the details of these waivers whenever they are required.
viii. Investors will commence a Power Purchase Agreement (PPA)
negotiation of identified off-taker, or the Bulk Electricity Trading
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Company of Nigeria where a total package on a PPA will be
negotiated and signed.
ix. Investors can now engage the Nigeria Electricity Regulatory
Commission (NERC) for the issuance of licenses which are site
specific. Licenses can be for grid operation or off-grid depending on
the off taker involved.
x. Investor Builds its plant, and Commissions in line with the licensing
conditions.
So far Seventy-nine (79) prospective Investors presented project Proposals to
the IPPs Standing Committee according to the table below:
DISTRIBUTION OF COMPANIES’ AREAS OF INTEREST
Interest Number of Companies
Gas 25
Hydro 8
Coal 6
Wind 8
Solar 5
Renewable( Not Specific) 3
Waste 5
Heat 3
LPFO 1
Fuel Cell 2
EPC 13
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ENERGY RESOURCES IN NIGERIA:
Nigeria is endowed with reasonably large quantities of various energy resources.
The Country is endowed with both the Conventional and the non-conventional
Energy resources. The Conventional comprise mostly of the non- renewable
energy resources such as crude petroleum oil, natural gas, coal, tar sand and
uranium. The country has the tenth largest oil and gas reserves in the world.
Nigeria‟s near equatorial location, extensive and diverse vegetation, prevailing
trade winds and many rivers endow her with high quantities and quality of
renewable energy resources. These include solar radiation, hydro power, wind
and biomass energy. The table below illustrates the energy resources in the
Country.
0
5
10
15
20
25
30
Companies and their Areas of Interest
Areas of Interest
No. of Companies
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Table I
Current Nigeria’s Energy Resource
Energy Type Resource Estimate
Crude Oil 35 billion barrels
Natural Gas 183 Trillion cubic feet (1ft=0.048m)
Hydro power 14750 MW
Coal 2.75 billion Metric tons.
Solar Radiation 3.5 – 7.0 KWh/m2-day
Wind Energy 2.0 – 4.0 m/s( 10 metres in height)
Nuclear Lot (Not yet Quantified)
Biomass 144 million tonnes/yr
Wave and Tidal Energy 150,000 TJ/yr (16.6 x 106 toe/yr)
Geothermal Energy 37 and above 100oC (Not yet expl.)
2.1 CONVENTIONAL ENERGY RESOURCES:
i. Oil And Gas (Petroleum Resources)
ii. Coal
iii. Hydro
Table II
Small and Medium Hydro Power Potentials in 10 locations Nigeria
Location Dams Exploitable Capacity,
Ogun State Oyan 10MW
Oyo State Ikere 6 MW
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Zamfara Bakolori 3 MW
Kano Challawa 7.5 MW
Kano Tiga 10 MW
Kogi Kampe 500KW
Ondo Owena 450KW
Nasarawa Doma 1MW
Katsina Zobe 300KW
Katsina Jibia 4MW
2.2 NON-CONVENTIONAL ENERGY RESOURCES
The following are the various non-conventional energy resources available in the
country that can be harnessed for power generation.
i. Nuclear
ii. Solar
iii. Wind Power
iv. Biomass Energy
v. Wave And Tidal
vi. Geothermal Energy
Table III
Summary of geothermal potentials in Nigeria
S/N State Location Geothermal
Resource
Primary outputs/Source
1. Adamawa Lamurde
LGA
Lamurde hot
spring
Steam/hot water above 100oC.
Hot dry rock and normal temp.
2. Bauchi Yankari Park Wikki Warm
Spring
Warm water up to 40oC Hot dry
rock and normal temperature
gradient
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3. Benue Okpoga Enemabia warm
spring
Warm water at 38oC. Hot dry
rock and normal temperature
gradient.
4. Ekiti Ikogosi Ikogosi warm
spring
Warm water at 37oC. Hot dry
rock and normal temperature
gradient.
5. Nasarawa Awe LGA Akiri Warm
Spring
Warm water at 40oC. Hot dry
rock and normal temperature
gradient.
Source: On-going studies at the University of Ado-Ekiti, Mechanical Engineering
Dept.
ENTRY OPTIONS FOR INVESTORS
Potential Investors can consider the following options in the development of the
Power Sector in Nigeria:
Independent Power Producer
Acquisition of Existing Thermal Power Plants
Concessioning of Existing Hydropower Plants in the Country
Local Production of Equipment and Components used in the Power
Sector
Manufacture of Energy saving appliances
Provision of gas supply and transportation infrastructure
INVESTORS’S COMFORT FRAMEWORK
Independent Electricity Regulator Tariff review on fast track
Creditworthy off-taker Established- Nigeria Bulk Electricity Trading PLC Credit enhancement
Liability Management Co. (NELMCO) set-up
Government‟s Reforms Policy Trust
Political will
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TACKLING SECURITY IN NIGERIA
An unfriendly security climate precludes both external and internal investment in
the Country. Thus security is seen by the present Administration as necessary for
the development of the Power Sector. It has put in place measures to tackle the
Niger Delta Security challenges and the recent spurs of terrorism unleashed in
the Country with physical policing, military intelligence, security and the
installation of closed circuit televisions in strategic locations in the Country.
In addition, efforts are on-going to put an end to the challenges of insecurity in
the Country by the Federal Government with the setting up of Committees on
security with a view to investigating the underlying cause (s) of the acts of
violence experienced in the Country and dealing with them in a decisive manner.
Potential investors are hereby assured that investments made in the Power
Sector are secured.
Nigeria‟s membership in multilateral organizations such as the following is
another guarantee to potential investors:
(i) Multilateral Investment Guarantee Agency (MIGA) guarantees offer
much more than just the assurance that losses will be recovered. The
insurance also benefits investors and lenders.
(ii) International Development Associations (IDA) aims to reduce poverty
by providing interest-free credits and grants for programs that boost
economic growth, reduce inequalities and improve people‟s living
conditions.
(iii) International Finance Corporation (IFC) positioned to help countries in Sub-Saharan Africa develop model projects that can support private investment, thus allowing government spending to focus on areas where it can be more effective.
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XII. CONCLUSION
12.1 The year 2011 was considered as a pivotal year for the consolidation of the work needed to both provide reliable power to the people of Nigeria and pave the way for the future. During the past year, the Federal Ministry of Power made strong progress in three (3) main areas: (i) Fixing the current system in order to deliver the maximum amount of power. Today, Nigerians are receiving more reliable power than they have had in the past years. Generation is achieving record amounts of power and we have delivered it to the people. Polls tell us that 90 percent of people who have seen a change in their power supply
have seen a positive change; (ii) Consolidating the reform programme in the power sector. The Ministry is rapidly moving towards winding down the Power Holding Company of Nigeria (PHCN) within the next few months, and moving towards more private sector participation in our current generation, transmission and distribution companies; and (iii) Building the enabling environment that will drive the billions of dollars of private sector investment needed for future power projects in Nigeria. (iv) From January 2012, state governments in Nigeria had the rights to generate and distribute electricity power in their domain.
This was made possible by the new set of regulations by the Nigerian Electricity Regulatory Commission (NERC) guiding Independent Electricity Distribution Network Operators and Embedded Power Generators.
Embedded Generation is when a power plant is built in a particular locality and not connected to the national grid for transmission. The generated capacity is connected directly to the distribution network.
Prior to this initiative, the Federal Government had held on to the exclusive right of electricity power generation and distribution for commercial purposes apart from some big industries that were given the license to produce limited units for industrial use.
Federal Ministry of Power
Abuja.
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ACRONYMS
GCFR - Grand Commander Federal Republic
LPFO - Low Pour Fuel Oil
PHCN - Power Holding Company of Nigeria
HEPP - Hydro Electric Power Project
NPPP - Nationwide Independent Power Producers
Project
NERC - Nigeria Electricity Regulatory Commission
OSGF - Office of the Secretary to the Government
Of the Federation
OHCSF - Office of the Head of Civil Service of the
Federation
TCN - Transmission Company of Nigeria
GENCO - Generation Company
CDs - Compact Disk
DVD - Digital Versatile Disk
VCD - Video Compact Disk
GT - Generator
SLM - Service Level Agreement
MMS - Maintenance Management System
OEM - Original Equipment Manufacturer
LC - Letter of Credit
MYTO - Multi-Year Tariff Order
EIA - Environmental Impact Assessment
NIPP - National Integrated Power Project
IPP - Independent Power Producers
NEPP - National Electric Power Policy
EPSR - Electric Power Sector Reform
REA - Rural Electrification Agency