‘$5b Mambilla Hydropower for Sale on Completion’

fasholaBabatunde Raji Fashola, Minister of Works, Power and Housing.
  • ‘$5b Mambilla Hydropower for Sale on Completion’

The Federal Government may privatise the 3050 Megawatts (Mw) Mambilla Hydropower plant on completion, the Minister of Power, Works and Housing, Babatunde Fashola, has said.

Fashola, in an exclusive interview said the planned privatisation was in line with government’s policy of encouraging private generation capacity.

He said: “Ultimately we will involve the private sector in the construction and management of the facility because it is consistent with the policy of private generation capacity.

“But let me say that this is where the role of my Ministry becomes even most defined in terms of policy. Mambilla represents a policy, a policy of renewable energy using water, a policy of energy security for the country that gives us over 3,000Mw, so that we are no longer solely dependent on gas.”

In comparism, he said: “Look at the UK, they are building a nuclear power plant that they have privatised, but government is still actively involved because they see it as energy for the future. When Mambilla is fully developed and ready, we will hand it over to the private sector,” he stated, adding that Nigeria had to fall back on its sovereign credit rating to borrow the money and deliver the power and someone can come and manage it.

“If you look at Kainji, Jebba, Shiroro, they are big dams. It was government that built them, but they are now managed by private hands. So these are some of the things government must de-bottle in order for them to happen,” Fashola said, pointing out that if there is opportunity to do the same with solar, government will do it. If we had invested in solar 10 years ago, this is the right time to switch to solar as the rainy season is ending, where your hydro is not as prolific anymore and the sun is now prolific this is what you move to naturally.”

Fashola also said the government will wade into improving the capacity of the distribution companies (DisCos) as the power distributors currently are behind other segments in the supply value chain.

The minister said: “The problem with the DisCos is that they don’t have capacity to expand the way it is expected. Their challenges include exchange rate and liquidity, among others. The roll out of excellent services including metering that was expected has not happened in the way we expected it. Some have happened.

“Second problem is that most of the equipment they bought were old enough, nobody can dispute that. Those equipment must be changed. Some of those equipment had original manufacturers’ rating on the day they bought the equipment. For example, does your 10-year old car run at the same speed after 10 years? No, those are the realities. So those equipment have been de-rated. Even in transmission, sometimes all we need to do is add a new transformer to double the capacity. Those are the things they supposed to do.

“In the area where the equipment are not de-rated, the population has grown, more people have built houses. So they must expand, that is the problem. How do we solve the problem? We have asked the DisCos to give us the number of transformer they need and their ratings, give us the number of lines – how many kilometres, how many volts. They are doing that work now. How much does it cost? When it comes, we have to take it and ask how we fund it.

“These are companies where the government owns 40 per cent. We will be able to know what each DisCo needs and what it costs. When we dimension that, we must know who the suppliers are, because we are not awarding contract to anybody. However, I still have to get Federal Executive Council’s (FEC) approval on this and buy everybody’s idea. That is what we must do so the DisCos will inject the additional 2000Mw we are generating into the grid,” Fashola stated.

About the Author

Samed Olukoya
Samed Olukoya is the CEO/Founder of investorsking.com, a digital business media, with over 10 years experience as a foreign exchange research analyst and trader.

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