Federal Government of Nigeria Signs 250 MW Deal With Distribution Companies

The Federal Government, in partnership with the Niger Delta Power Holding Company, has signed a Power Purchase Agreement with utility companies to distribute a total of about 250 MW across the federation.

The document from the NDPHC reveals that the power scale transactions have been signed since the inception of the ‘Light Up Nigeria’ programme currently running under Vice President Shettima.

The Distribution Companies include Eko Electricity Distribution Plc, Compagnie d’Energie Electrique du Togo, Sunflag Steel Industries Limited, APLE Electric Limited, Pulkit Alloy & Steel Limited, Lagos, and Wewood Limited, Omotosho, Ondo State.

Other Discos are ABV Utility Limited, Lagos, Ayingba Independent Electricity Distribution Network Limited, Ondo South, Avatar New Energy Limited, Lagos, Phoenix Steel Mills Limited, Agbara Industrial Area, and Ota & Sagamu Interchange.

In the document, NDPHC said the purpose of the programme was to sell the current capacity available and develop more, and that the power generation projects were all funded through the excess crude account properly appropriated by FG and the States between 2005 and 2009.

Despite the recent achievements, NDPHC said its operations are limited due to the number of systemic challenges that have significantly affected its cash flow.

The PUNCH also reported that the company also listed some challenges, such as gas supply, transmission constraints, and transportation constraints, to ensure the generation of TCN-allocated evacuation capacity of 975 MW, let alone the total capacity of its power plants.

The NDPHC currently has a total of 10 power plants and has also revealed that Calabar is the only plant with a full gas supply.

The company said,

• Plants in western axis require about 150MMSCF/day to meet the TCN-allocated evacuation capacity of 535MW (Peak).

• Gas supply to western axis power plants is further challenged by low pressure on NGIC gas pipelines –ELPS & Oben-Ajaokuta. Gas suppliers want higher gas tariffs beyond industry-approved gas tariffs ($2.50 vs. $2.18).

In resolving the challenges, NDPHC said it was “obvious more investments were needed.

“It is obvious that a lot more investment is required in transmission, and government alone cannot do this,” it said, calling for an “urgent private capital mobilization.”