Power sector stakeholders have expressed optimism that operators of the Nigerian Electricity Supply Industry, NESI, in the country would leverage on the $250 million intervention fund set up by the Central Bank of Nigeria, CBN, to improve transmission and distribution infrastructure across the country.
The fund is designed to urgently fix existing dilapidated infrastructure in the area of electricity distribution and transmission would enable the Transmission Company of Nigeria, TCN, wheel more electricity on the short and enable distribution companies, DisCos, procure and repair their key interface infrastructure.
Although existing challenges, especially unsettled management issues have hindered some DisCos from accessing the fund, there are indications that some DisCos have ordered thousands of transformers, as some of the utility companies have been provided about N6 billion under the initiative.
Speaking on the fund in Abuja, energy expert, Oyebode Fadipe, stated that one of the fundamental issues in the power sector was poor liquidity in the industry.
He added that while it is true that one of the expectations of the privatisation programme is that the sector would be self funding so that the government would ultimately stop funding it, the benchmark had not been realised.
“It is in direct response to this liquidity challenge that the CBN was brought into the loop. There is therefore sense in the involvement of the CBN in the interface projects between Disco and TCN,” Fadipe said.
He stated that the action of the apex bank would help to bring more stability in the grid and by so doing, more people will be able to receive electricity for their use.
Fadipe stated that quality of supply is also expected to increase because in some locations where the transformers are overloaded, they would be upgraded.
On his part, energy finance expert, Dan Kunle noted that financing improvement in the transmission and distribution segment of the electricity market is sacrosanct.
While stressing that the funding by the CBN is on the right path, Kunle noted that improving the manufacturing sector to perform better on the backdrop of improved electricity remained critical.
Speaking on the matter recently, the Minister of Power, Abubakar Aliyu stated that the apex bank was already funding a $250 million project to ensure the rehabilitation of critical interfaces infrastructure between both segments to increase and stabilise power delivery.
This, according to him, is in addition to the Siemens Presidential Power Initiative (PPI) that will bring in additional $2 billion or more to the transmission grid from the government.
With the critical intervention, the Minister said the government was expending almost $4 billion secured by the current administration to augment the grid, adding that much of the funds were being actively spent and the results will be felt soon.
He added that the interface projects along with others already being embarked upon by TCN brings ongoing projects in the transmission segment alone to 135 ongoing projects with 30 completed key substation projects and 12 transmission lines.