Yemisi Izuora
The Niger Delta Power Holding Company (NDPHC) says power sector operations will be boosted if ongoing discussion with a Chinese company, State Grid Corporation of China (SGCC) on a $12 billion electricity transmission projects deal is realised.
The project will be executed for the Transmission Company of Nigeria (TCN) through the NDPHC Limited in the phase two of the NIPP.
SGCC is the the largest state-owned electricity utilities company in the world, which transmits and distributes power in China, has offered to offered to invest first $8 billion and then $4 billion later as equity and loan participation in key electricity transmission projects in the second phase of the National Integrated Power Projects (NIPP).
Yakubu Lawal, spokesperson of the company said the SGCC had offered to be part of the project last year during a visit by federal government delegation to China.
SGCC is forming a consortium with its other partners, CET Power and Westron.
Under the deal, the SGCC’s funding portfolio in the sector could rise to $18 billion if the government would smartly resolve inherent challenges in projects’ financing in the transmission network, vis-à-vis the country’s power sector.
The offer would see the NDPHC committing about $600 million to the transmission project.
The projects may include Lot 5A Ikot Abasi 330kV transmission substation, Lot 6F, G and H Owerri-Nnewi-Onitsha 330kV line, Lot 7A and B evacuation from Oke Aro, and Lot 18A and B Ikot Abasi-Ikot Ekpene 330kV line.
Others include Lot 19-3C-Turn-in of Benin-Onitsha 330kV line in Ihovbor, Lot 20-1A Ikom 132/33kV substation, Lot 20-2 Obudu 132/33kV substation, Lot 20-3A and B Abakaliki-Ikom-Obudu 132kV line, Lot 25-3C Calabar EPZ 132/33kV substation as well as Lot 25-4C Adiabo-Calabar EPZ 132kV line.
The Managing Director of NDPHC, Mr. James Olotu, explained that the transmission projects are 15 of the 114 transmission projects that would not be completed in the first phase of the NIPP due to intractable wayleave issues and high cost escalations.
They have however been transferred to the phase two of the NIPP for consideration and approval by the board. It is these projects and a couple of others that SGCC and its other partners have indicated interest to fund.
As part of the policy thrust of the NIPP phase two, NDPHC is expected to deploy parts of the funds earned from the sale of its 10 thermal power plants in an ongoing shares divestment programme, to help improve the capacity and reliability of the national grid to meet up with expected increase in the sector’s generation capacity.
SGCC reportedly manages electricity transmission and distribution from subsidiaries in Northern China, North-eastern China, Eastern China, Middle China and North-western China.
Also, a number of gas supplies and electricity distribution assets worth about $2 billion will likely be transferred to the Nigerian Gas Company (NGC) and electricity distribution companies (Discos) in the country by the NDPHC.
The assets are slated to be disposed to the NGC and the 11 Discos in the country for use to improve on their operations in the power sector. Their value, the report added will be recovered within a 10-year period from the time the transfer is consummated.
There are about 296 distribution network assets as well as gas pipelines and metering stations in four lots that cover gas supplies to NIPP plants at Ihovbor, Egbema, Gbarain and Calabar.
A new metering station in Sapele is equally part of the gas supplies and electricity distribution assets that will be transferred by NDPHC.
Lawal however stated that the deal is yet to be consolidated and when sealed it will boost implementation of transmission projects under phase 11 of the NDPHC/IPP program but “No timeline is yet set because discussion is ongoing”.