FG engages Chinese firm to expand electricity transmission network
In preparation for anticipated increased activities in the electricity sector with the recent take-over of the assets of the Power Holding Company of Nigeria (PHCN) by private investors, the Federal Government has engaged Xian Electric Engineering Company Ltd, a Chinese firm, to expand the transmission lines to make for easier evacuation of electricity to consumers across the country.
The memorandum of understanding (MoU) on the project, expected to costs $500 million in the next two years, was signed yesterday by Chinedu Nebo, minister of power, and Ji jun Hua, general manager, Xian Electric.
This development is coming just as industry watchers and operators are calling on government to ensure that the Transmission Company of Nigeria (TCN) is run independently, devoid of politics.
According to them, the current privatisation exercise in the power sector will only be meaningful if government ensures that a viable transmission network is put in place.
Evacuation of generated electricity has been a challenge for the power sector and the country as a whole, as larger percentage of the transmission lines in the country are weak and and incapable of carrying clean power.
“The transmission facilities are not strong. Even if generation improves, where are the facilities to wheel them to the people? There are investors who are interested in investing in the sector, but the situation on ground is not encouraging,” says an operator, saying “the government should deploy serious funds for the strengthening of the transmission lines so that the recent investments made by the private sector concerns in the sector do not come to waste.”
Akinwunmi Bada, former chief operating officer of TCN, says government needs to commit fund to allow for easy flow of energy to consumers by plugging the gaps within the system. For him, while new transmission lines are being put in place, the old ones should be strengthened for maximum performance.
Also reacting, Akin Adetunji, executive vice chairman, Terra Energy Services Nigeria Limited, notes that one of the challenges to be faced by the new investors would include issues of transmission, adding that a lot of investment needs to be made to improve the transmission network.
Reuben Okeke, director-general, National Power Institute of Nigeria, says if the arrangement and plans on ground are well implemented there would be no reason why transmission would be an issue.
Goddy Duru, managing director, Power Tech, says there are backlog of issues that are plaguing the transmission lines and these must be resolved before there can be easy evacuation of power.
Beyond the physical expansion of the transmission lines, there are also concerns about the administration of the TCN, such as the constitution of the board for Manitoba, the management consultant to the TCN, being given a free hand to run the affairs of the company.
The board issue has been unduly delayed, and BusinessDay learnt that constituting the board had been bogged by the fact that government nominees were yet to submit their curriculum vitae. And this is holding back Manitoba from taking effective control of the TCN.
Under the agreement signed, the Chinese firm is expected to, according to agreed technical design specifications with the TCN and Manitoba, develop/upgrade, deliver transmission lines and build new sub-stations to evacuate electricity across the country.
Xian is also to provide reference manual and adequate training for Nigerian workforce in line with the local content policy, in addition to funding of the projects expected from the China Exim Bank. Negotiation for the project was part of the agenda of the President Goodluck Jonathan recent visit to China.
The terms of agreement expect that the Ministry of Power facilitate the acquisition of relevant data and reports for the conduct of required technical and economic studies for the projects by TCN, and also facilitate the identification and acquisition of suitable parcels of land ‘And Right of Way’ of the execution of the projects.
Also, the power ministry is to provide the Chinese firm with the technical details of TCN projects list to be implemented and facilitate the execution of needed commercial agreements, as may be required for the bankability of the projects.
The project will take off immediately, Nebo said, and assured that much of the work would have been concluded during the two year it will last.
“Manitoba, the management consultant to TCN, will be involved in the design and details of the project. Besides, Xian is reliable and is one of the leading firm in the world with vast experience in providing solutions in the transmission sub sector. The nation should look forward to a delivery of quality expansion work in the transmission unit,” he assured.
The funding of the project was discussed by Ngozi Okonjo-Iweala, minister of finance, during the recent presidential visit to China.
The Chinese firm shall be solely responsible for the funding of the projects from the China Exim Bank through the government of China. It is a concessionary loan and at a very low interest rate.
To Ji jin Hua, the engagement of Xian symbolises the strength of the relationship between China and Nigeria, assuring of high quality equipment in the implementation of the projects.
The Federal Government last week completed the sale of successor companies to the PHCN to private investors for better management to ensure improvement in the provision and supply of electricity across the country.
With that, there is expectation of increase of activities in the power sector, which the current transmission backbone would not be able to match up.
Source: Businessdayonline
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