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FG Completes Concession Process for N6.68bn Hydropower Plant

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  • FG Completes Concession Process for N6.68bn Hydropower Plant

The Federal Government has completed the concession process required for the handing over of the N6.68bn Gurara Hydropower Plant to a concessionaire.

It said the 30-megawatts power plant located in Kaduna, would contribute to addressing the gap in electricity supply across the country, particularly in the North-West states of Nigeria.

The Minister of Water Resources, Suleiman Adamu, who disclosed this while speaking on the sidelines of a media workshop in Abuja, also noted that the Federal Government had decided to concession the hydropower components of selected dams.

He said the Gurara dam was one of the selected dams, adding that the processes needed to concession the 30MW project had been completed.

Adamu said, “We are not concessioning the entire dams in our concession arrangement. Rather, the concession is for the hydropower component of the dams and the dams will still be owned by the Federal Government.

“In Gurara, we have a hydropower plant there. All the processes for the concessioning have been completed and it is now a matter of presenting it to the Federal Executive Council for approval.”

The minister, however, observed that the transmission lines to evacuate power from the hydropower plant were not ready yet.

“That is not within the purview of the Federal Ministry of Water Resources, it is undertaken by the TCN (Transmission Company of Nigeria) but a lot of provision has been made and we hope that by the end of this year something better will happen,” Adamu stated.

He further noted that the 40MW Kashimbilla Hydropower Plant was also ready.

“Again, we are also waiting for transmission lines to be completed but have started the process of concessioning and we have appointed a transaction adviser, hopefully by next year, we should be able concession that one as well,” Adamu said.

On why there was a need for the hydropower project, the Infrastructure Concession Regulatory Commission explained that the plant when operational, would increase the country’s overall power generation.

The ICRC stated that in addition to fulfilling the water supply needs of residents, the dam had been equipped with world-class amenities for hydropower generation, irrigation, farming, tourism development, and fish farming.

It said the water ministry plans to integrate the 30MW power plant into the Gurara dam works, which is expected to produce 115 gigawatts-hour of energy annually, representing a 44 per cent annual capacity factor.

“The water from the Gurara reservoir will be used to produce hydroelectricity using the water that is available once the water supply demands have been satisfied,” the commission stated on its website.

On the rationale for adopting a Public Private Partnership model for the operation of the plant, the ICRC explained that the proposed model for the concessioning of the hydropower component of the dam would require one concessionaire to take custody of the project for a period of time as determined by the financial analysis.

It stated that under this form of PPP, the concessionaire would be responsible for the use of the asset in generating hydropower and connecting to the transmission network made available by the TCN on behalf of the Federal Government to the sub-station for distribution.

“Therefore, an operate-and-maintain model was selected as the best PPP methodology for concession of the project,” it added.

Adamu had earlier revealed that Nigeria had a hydropower potential of 12,220MW but that only about 1,930MW of this had been developed at Kainji, Jebba and Shiroro dams.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Economy

Electricity Consumers Get 611,231 Meters Under MAP Scheme

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Electricity Consumers Get 611,231 Meters Under MAP Scheme

A total of 611,231 meters have been deployed as at January 31, 2021 under the Meter Asset Provider initiative since its full operation despite the COVID-19 pandemic and other extraneous factors, the Nigerian Electricity Regulatory Commission has said.

NERC disclosed this in a consultation paper on the review of the MAP Regulations.

The proposed review of the MAP scheme is coming nearly four months after the Federal Government launched a new initiative called National Mass Metering Programme aimed at distributing six million meters to consumers free of charge.

“The existence of a huge metering gap and the need to ensure successful implementation of the MYTO 2020 Service-Based Tariff resulted in the approval of the NMMP, a policy of the Federal Government anchored on the provision of long-term low interest financing to the Discos,” NERC said.

The commission had in March 2018 approved the MAP Regulations with the aim of fast-tracking the closure of the metering gap in the sector through the engagement of third-party investors (called meter asset providers) for the financing, procurement, supply, installation and maintenance of meters.

It set a target of providing meters to all customers within three years, and directed the Discos and the approved MAPs to commence the rollout of meters not later than May 1, 2019.

But in February 2020, NERC said several constraints, including changes in fiscal policy and the limited availability of long-term funding, had led to limited success in meter rollout.

NERC, in the consultation paper, highlighted three proposed options for metering implementation going forward.

The first option is to allow the implementation of both the NMMP and MAP metering frameworks to run concurrently; the second is to continue with the current MAP framework with meters procured under the NMMP supplied only through MAPs (by being off-takers from the local manufacturers/assemblers).

The third option is to wind down the MAP framework and allow the Discos to procure meters directly from local manufacturers/assemblers (or as procured by the World Bank), and enter into new contracts for the installation and maintenance of such meters.

“Customers who choose not to wait to receive meters based on the deployment schedule of the NMMP shall continue to have the option of making upfront payments for meters which will be installed within a maximum period of 10 working days,” NERC said.

The regulator said such customers would be refunded by the Discos through energy credits, adding that there would be no option for meter acquisition through the payment of a monthly meter service charge.

“Where meters have already been deployed under the meter service charge option, Discos shall make one-off repayment to affected customers and associated MAPs. Such meters shall be recognised in the rate base of the Discos,” it added.

NERC urged stakeholders to provide comments, objections, and representations on the proposed amendments within 21 days of the publication of the consultation paper.

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Economy

Nigeria’s Economy Moving in Right Direction but Slow – Amina Mohammed

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Nigeria’s Economy Moving in Right Direction but Slow – Amina Mohammed

Nigeria is moving in the right direction economically but its movement is not fast, the United Nations stated on Thursday.

Deputy Secretary-General of the United Nations, Amina Mohammed, said this during a meeting at the headquarters of the Federal Ministry of Industry, Trade and Investment in Abuja.

She said the challenges in Nigeria were huge, its population large but described the country’s economy as great with lots of opportunities.

The UN scribe stated that after traveling by train and through various roads in the Northern parts of Nigeria, she discovered that the roads were motorable, although there were ongoing repairs on some of them.

Mohammed said, “This is a country that is diverse in nature, ethnicity, religious backgrounds and opportunities. But these are its strengths, not weaknesses.

“And I think the narrative for Nigeria has to change to one that is very much the reality.”

Speaking on her trips across parts of Nigeria, she said, “What I saw along the way is really a country that is growing, that is moving in the right direction economically. Is it fast enough? No. Is it in the right direction? Yes it is.

“And the challenges still remain with security, our social cohesion and social contract between government and the people. But I know that people are working on these issues.”

She said the UN recognised the reforms in Nigeria and other nations, adding that the common global agenda was the Sustainable Development Goals.

Mohammad commended Nigeria’s quick response to the COVID-19 pandemic, as she expressed hope that the arrival of vaccines would be the beginning of the end of COVID-19.

On his part, the Minister of Industry, Trade and Investment, Adeniyi Adebayo, told his guest that the Federal Government was working hard to make Nigeria the entrepreneurial hub of Africa.

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Economy

N10.7tn Spent on Fuel Subsidy in 10 Years – MOMAN

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N10.7tn Spent on Fuel Subsidy in 10 Years – MOMAN

Nigeria spent a total of N10.7tn on fuel subsidy in the last 10 years, the Chairman, Major Oil Marketers Association of Nigeria, Mr Adetunji Oyebanji, has said.

Oyebanji, who was the guest speaker at the 18th Aret Adams Lecture on Thursday, said N750bn was spent on subsidy in 2019.

He highlighted the need for a transition to a market-driven environment through policy-backed legislative and commercial frameworks, enabling the sustainability of the downstream petroleum sector.

“Total deregulation is more than just the removal of price subsidies; it is aimed at improving business operations, increasing the investments in the oil and gas sector value chain, resulting in the growth in the nation’s downstream petroleum sector as a whole,” he said.

The managing director of 11 Plc (formerly Mobil Oil Nigeria Plc) said steps had been taken, “but larger and faster leaps are now required.”

According to him, deregulation requires the creation of a competitive market environment, and will guarantee the supply of products at commercial and market prices.

“It requires unrestricted and profitable investments in infrastructure, earning reasonable returns to investors. It requires a strong regulator to enable transparency and fair competition among players, and not to regulate prices,” Oyebanji said.

He noted that MOMAN had recently called for a national debate by stakeholders to share pragmatic and realistic initiatives to ease the impact of the subsidy removal on society – especially on the most vulnerable.

He said, “A shift from crude oil production to crude oil full value realisation through deliberate investment in domestic refining and refined products distribution, creates the opportunity to transform the dynamics of the downstream sector from one of ‘net importer’ to one of ‘net exporter’, spurring the growth of the Nigerian economy.

“Effective reforms and regulations are key drivers for the growth within the refining sector. Non-functional refineries cost Nigeria over $13bn in 2019. If the NNPC refineries were operating at optimal capacity, Nigeria would have imported only 40 per cent of what it consumed in 2019.”

Full deregulation of the downstream sector remains the most glaring boost to potential investors in this space, according to Oyebanji.

He said, “As crude oil prices will fluctuate depending on the prevailing exchange rates, it will be astute to trade in naira to avoid inevitable price swings.

“There needs to be a balance between ensuring the sustainable growth of the crude oil value chain (upstream through downstream) and providing value for the Nigerian consumer and the Nigerian economy.”

He said the philosophy should be for the government to put the legislative and commercial framework in place and let the market develop by itself.

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