Yemisi Izuora
David Ladipo, chief executive officer of Azura Power West Africa Ltd has said that should
Double efforts to expand its power transmission grid and review the terms of its management before its economy can effectively boost electricity supply.
This advise is coming as the company exerts energy to keep to 2018 timeline when it hopes to begin full capacity power generation from its Azura-Edo 450 mega watts facility.
While Nigeria sold 17 state-owned power utilities three years ago, but retained control of the transmission grid and signed a short-term management contract with Manitoba Hydro Electric Board of Canada to run the entity now known as the Transmission Co. of Nigeria, (TCN).
The power grid is going to be the “big bottleneck” as it can only carry about 5,000 megawatts, less than a third of what the country needs to end blackouts, Ladipo, who runs the Lagos-based power-generating, company said.
“A proper concession is doable or the alternative is just to have a bigger management contract” that enables Manitoba to do more, he said.
Azura Power, backed by Amaya Capital Partners, based in Port Louis, Mauritius, is investing about $900 million to build a 450-megawatt natural gas-fueled plant in the southern state of Edo, located near a transmission line and on a gas-pipeline route.
The company, which announced on Jan. 21 it had secured $876 million for the project, wants to take advantage of the growth of Nigeria’s electricity market, where demand is more than three times the current output of about 4,000 megawatts.
Azura estimates that electricity from its facility will get to the grid by June 2018.
“There’s money sitting and available, waiting to be invested into the grid,” he said.
“It can’t be expended because there’s insufficient execution capacity.”
Nigeria’s electricity companies have been hindered by inadequate capital for expansion and erratic supply of gas, the fuel that accounts for 70 percent of the country’s power generation.
Even though it has Africa’s biggest gas reserves of more than 180 trillion cubic feet, Nigeria has struggled to ensure regular supply.
It has been plagued by pricing disputes and unrest in the Niger River delta, where most of the gas is produced, resulting in frequent pipeline sabotage.
Nigeria is also Africa’s top oil producer and relies on crude sales for 70 percent of government revenue.
“At the moment, the transmission constraints are masked by the gas supply shortages,” Ladipo said.
“The gas supply shortage, we believe, will eventually be alleviated and then all the spotlight will be on TCN.”