Update on Activities in the

Nigerian Power Sector

Being Presentation by
Engr. (Dr.) Joseph O. Makoju
Special Adviser to the President on Electric Power at the
NERC/UBA Seminar on Financing & Investment Opportunities in the
Nigerian Power Sector at Abuja
25th January, 2007
 Outline

• Operational Update
• Infrastructure Expansion
• Sector Reforms
• Conclusion

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Operational Update

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 Operational Update

• Some improvement in generation output now

being experienced (although some output
constraints still exist at a major thermal station
due to the gas restrictions from NGC –
400MW Shortfall).
• With the recent improvement in relations
with the surrounding communities, we now
have access to the location of the vandalized
gas pipeline, and negotiations are on for the
commencement of repairs.
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Major Infrastructure Expansion

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1st Batch FG Power Stations (1,600MW)

Geregu:- Work on the 414MW plant is on going. Plant is

on schedule for commissioning in Feb-07.

Omotosho and Papalanto :-. Installation works on-

going. On completion the total capacity at both plant will
be 670MW. First fire of Omotosho and Papalanto is
expected to be in Apr – 07.

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 FG Power Stations………….………..cont’d

Alaoji:- Civil Works in progress. Some major equipment

have arrived. Custom clearance and transportation to site
has commenced. The 504MW plant is on schedule for
early 2008.

Mambilla:- Agreement concluded with the Chinese

Government to part fund this 2,600MW hydro station.
Award of civil works and ground breaking ceremony
before the end of February and the power station should
come on stream by 2012.
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 Generation Expansion Plan (2006-2010)
Dec-06 Dec-07 Dec-08 Dec-09 Dec-10
Existing Power Stations 3357 4027 3880 3780 3780
Existing IPPs 750 750 750 750 750

On-going FG Projects
1001 1496 2512 3528 4544

On-going NIPP PS 0 2203 2743 2743 2743

Proposed JV-IPPs 0 1220 2790 2790 2790

Other IPPs 90 510 1265 1365 1865

Total 5198 10206 13940 14956 16472

Notes: (i) Major Hydro Projects eg: Mambilla will come on stream by 2012
(ii) A 25yr Power Sector Development Plan aimed at achieving 150000MW has been developed.
(iii) Sustained funding of the sector (PPP) is required to ensure execution of the Development Plan to avoid any future reversals.
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 FG Transmission Projects

• Owerri-Ahoada-Yenogoa Transmission Line

and associated SS has been commissioned by
Mr. President (linking Bayelsa State for the first
time to the national grid)- October 2006.

• Commissioning of the 330kV Ikeja West

(Nigeria) – Sakete (Benin) interconnection
expected in the first half of February 2007.
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 NIPP (2,770MW)

Power Stations
ƒ Major equipment for Egbema and
Ihovbor Power Stations have arrived and
has been cleared from the ports, while
that of Gbaran Ubie; Calabar and Sapele
Power Stations have been shipped.

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 NIPP…………..…………….cont’d

Transmission
• Contractors on Transmission projects
under the NIPP have mobilized
• Challenges- community issues; weather etc

Distribution
• Procurement Process nearing completion

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 Location and Scope of NIPP Power Stations

NIPP POWER STATIONS:

Lot 1 – CALABAR, 561MW

Lot 2 – EGBEMA, 338MW

Lot 3 – EYAEN, 451MW

Lot 4 – GBARAIN, 225MW

Lot 5 – IKOT-ABASI, 300MW

Lot 6 – SAPELE, 450MW

Lot 7 – OMOKU, 230MW

Lot 8 – IBOM POWER, 188MW 12

Total = 2,743 MW
Scope of NIPP Transmission
Works

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 And Scope of NIPP Distribution Project

•2666 Km
of 11 KV
Lines

•1701 Km
of 33 KV 3540 MVA
Lines additional
Inj.
Capacity
22,598
Distribution
Transformers
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 Gas Delivery Projects

AJAOUKUTA TO KADUNA,
AJAOUKUTA TO OBAJANA
ABUJA

Ajaokuta
Geregu

Paplanto ELP TO EYAEN OBEN TO AJAOKUTA

ELP TO PAPLANTO

Egbin
Agura, Ikorodu Eyaen
Lagos
Benin City

Omotosho
Okpai 1&2

SCOPE: OBIGBO NORTH TO

Egbema
•Calabar, 90km ELPS TO OMOTOSHO
Warri
Alaoji ALAOJI

Obite
off-shore Adanga to Calabar Sapele

•Eyaen, 5km off ELPS Calabar

Gbaran Afam
•Egbema, 12 km to Izombie Calabar

Port Harcourt

•Gbaran, 6km to Gbaran/Ubie Omoku

Ikot Abasi

•Omoku, 1km from Omoku Bonny

IKOT ABASI TO
IBOM IPP
•Sapele, 1km to ELPS Oben
Sapele System 15
Sector Reform

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 Sector Reform - Highlights
• 1999- our Starting Point (Vertically Integrated
Monopoly)
• 2001- Introduction of a new Power Policy
• 2005- Promulgation of the EPSR Act
• 2005- Formation of PHCN Plc
• 2005- Incorporation of successor companies
• 2005- Inauguration of NERC
• 2006- Take-off of new successor companies
(and the commencement of the winding down of PHCN HQ)
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 Sector Reform

• BPE has incorporated the Nigeria Electricity Management Agency

to manage the legacy liabilities of PHCN in August 2006
• Resolution of staff severance issues are at an advanced stage
• 1st power generation licences issued by NERC in Jul-06
• Procurement process for O&M of TransysCo is on-going
• Privatization of some SCs to commence in 1st Q-07
• Work on the RE Policy as well as the set-up of REA Fund on-
going
• Procurement process for disposal of Ijora and Calabar Power
Stations has commenced
• Private Sector funded mass metering programme in the distribution
companies has started.
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 Present Landscape
• Decentralised Structure
• 18 successor companies
• Market Operations (Wholesale Mkt.; Transfer Pricing)
• Independent Electricity Regulator
• REA
• NEMA
• Some Private Players (AES,AGIP,RCM, Fibre Optic Coys)
• Gradual disappearance of the “vestiges” of PHCN
• Sustaining ongoing initiatives (Master Plan/Public
Enlightenment)
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 Are we done?

Certainly Not !…………Unbundling is

not an end in itself but a means to
achieving higher levels of efficiency &
improved service reliability (through the
replacement of a monopoly dominated
sector with a liberalized sector driven by
market dictates).
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 The next logical step

• Quickly move the unbundled entities

to a position of complete financial
autonomy. The underlying issue
being to make the sector financially
self sustaining……...herein lies the
challenge.

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 Some Challenges

• Huge Supply Deficit

• End User Tariffs
• Commercial Performance
• Funding Reform (Severance Pay,
Union Buy–in etc)
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What next? ….surmounting the challenges
• Soon to be introduced MYTO will
better align tariffs with CoS.
• On-going intervention by Govt. under
the NIPP should address power supply
and system integrity issues- 5000MW of new
capacity.
• An extensive metering programme has
commenced and will improve collection
efficiency. 23
 What next? ……….… surmounting the challenges

• SPE being set-up to inherit major liabilities of

PHCN (loans, PPAs etc ) which would otherwise
have had a huge impact on the working capital
of SCs.
• High level inter-agency committee currently in
discussions with the Unions
• Schemes being designed to improve commercial
performance (Upgrade of RCM; Concessioning of Dist.
Coys and Gen. Coys; O&M for new PS etc ).

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 Essential Requirements for a Successful
Power Sector Business

• Collection efficiency of at least 90%.

• Cost Reflective Tariffs (MYTO)

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 Our Expectations
• The ongoing procurement process for
the sale/concession of the distribution
companies and some power stations will
attract credible investors with the
required experience and financial
capacity to manage, grow and develop the
ESI to the mutual benefit of all
stakeholders.

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 Conclusion

• Necessary steps are being taken to

ensure that the reform program is seen
though to its logical conclusion – the
creation of an efficient and reliable private
sector led electricity industry.

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Thank you

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