- Nigeria Loses $29.3b Yearly to Erratic Power Supply
The Electricity Generation Companies (GenCos) at the weekend said the country loses $29.3billion yearly to low supply resulting from load shedding and inadequate facilities.
The Executive Secretary, Association of Power Generation Companies (APGC), Joy Ogaji, in an emailed response to questions, urged the Transmission Company of Nigeria (TCN) to upgrade its network to absorb the 8,000megawatts (Mw) capacity of the GenCos.
She said: “In urban areas where electricity access has been provided, the availability of electricity supply is drastically low, due either to load shedding or inadequate power supply facilities. It is estimated that the Nigerian economy is losing $29.3 billion annually, due to the lack of adequate power.”
Ogaji, a lawyer, also sought a strict regulation of the transmission and distribution chains of the Nigeria Electricity Supply Industry (NESI) to compel the distribution companies (DisCos) to remit the revenue they collect from their customers to the market operator.
She said: “If power output must improve, the transmission and distribution arms of the power chain must be strictly regulated. The transmission grid must be upgraded to ensure 8000Mw available capacity from GenCos is put on the grid.
“The DisCos must be strictly monitored to ensure revenue collected for electricity supplied is remitted. This is the link to infrastructure development and future investment along the power chain.”
Justifying Federal Government’s continued funding of the GenCos despite the privatisation, she said the government intervention is “because investment on generation is at the instance of the off-taker (NBET- FGN). Also because they have kept to the terms of their contract with government’’.
“GenCos, despite the stern challenges they are faced with from inception till date, have in association with the Federal Government’s objective to enhance the efficiency of the nation’s power industry as well as make energy affordable and available to consumers, kept to the terms of the industry agreements they entered into with the Bureau of Public Enterprises (BPE), which defines the relationship between the privatised companies and the government (represented by BPE and Ministry of Finance incorporated (MOFI) with a five-year period to recover lost capacities. Records from BPE shows that as at the takeover date in November 2013, available generation capacity was 4,500Mw.
“Also installed generation capacity stands at 13,496Mw as against 12,500Mw at take over. GenCos engaged on a massive capacity recovery plan with their acquired asset and achieved in no time lost capacities increasing available capacity to 7,913Mw.”
She said NESI has huge potential, but yet to demonstrate sustainable returns to investors across the electricity supply value chain.
Ogaji said cash flow within the industry is the fundamental problem preventing Nigerians from enjoying continued and sustainable improvement in electricity supply and the gains of the power sector reforms or privatisation.
She said: “The reason for this liquidity squeeze we feel in the sector is that the sector is working against the established principles of electricity supply value chain.
“The first principle being that while energy flows from the left to the right (via the fuel (gas or water) supplier to the fuel transporter (NGPTC), to the power generator (GenCos), to the power transmitter (TCN), to the power distributor (DisCos) and then to our homes or industry/commercial enterprises. The payment/money for the energy is expected to move from right to the left.
“That is, from consumers to the DisCos – statutorily empowered to collect and account for customer payments, on behalf of the value chain.
“This, unfortunately, is not happening as the GenCos are having a current market invoice shortfall of over 75 per cent. The question is: ‘which business can survive on a 25 per cent monthly invoice payment. Are Nigerians not willing or able to pay for the power generated?’ ”
Ogaji said GenCos increased available generation capability was not translated to corresponding increase in power supply to consumers, so consumers believe that the system has failed.
According to her, the privatisation of the sector had exposed the its structural weakness.
She said: “As investors, GenCos are worst hit in this electricity market logjam. They generate power and the power is consumed and not paid for. The Transition Electricity Market (TEM) regulation betrayed GenCos. Ineffective contracts as against the TEM promise; imposed quasi-PPA; constrained down and out – unrecognised demand capacity; wrongly defined available capacity.
“The above facts culminate to the understanding that whatever is on paper as an outstanding to any GenCo is less than the actual. GenCos are all casualties – a collateral damage to the economy.
“Natural justice, apart from PPA (power purchase agreement) clauses, requires that the GenCo be paid full for the declared available capacity and energy in the absence of the SO’s instruction to ramp down. Obvious commercial justification is that the GenCo has mobilised and paid for every input variable – fuel, labour and all other overhead costs – needed to produce energy as declared.
“More than four years after the establishment of NBET, what is evident to both international and local investors in the power sector is that NBET is deficient in the required capitalisation to meet its obligations.
“It also lacks the ability to provide adequate and sustainable payment securities backed by the Federal Government under PPAs. In the light of these glaring deficiencies, international organisations like the World Bank and the African Development Bank have had to create credit enhancement/payment support instruments in the form of partial risk guarantees to protect the companies.”
FG Plans to Build 10 New Airports in Anambra, Benue, Others – Aviation Minister
Aviation Minister Says FG Working on Building 10 New Airports
The Minister of Aviation, Hadi Sirika, on Tuesday, said the Federal Government plans to build 10 airports across the country to improve civil aviation.
The minister made the statement while defending his ministry’s 2021 budget proposals.
Sirika said President Muhammadu Buhari has done justice to the aviation ministry through the ongoing framework and implementation.
He said the administration would construct new airports in Anambra, Benue, Ekiti, Nasarawa, Ebonyi and Gombe States.
He further stated that airports in Kebbi, Osubi and Dutse have been taken over for redevelopment by the Federal Government.
Sirika said, “Consequent upon that roadmap, we have seen aviation grow in 2018 to become the second-fastest-growing sector of the economy.
“Also and by 2019, it became the fastest-growing sector of the economy and increased its GDP contribution.
“From 2015 till now, we’ve seen a lot of growth in civil aviation, the number of airports is increasing.
“So far, about seven airports have been added to the map, some of them completed, some of them under construction.
“There are airports coming up in Benue, Ebonyi, Ekiti, Lafia, Damaturu, Anambra and so on.
“All these show that civil aviation is growing during this administration.
“So, we have about 10 new airports coming up, that is almost half the number of airports we used to have in Nigeria.
“We are adding 50 per cent of the number of airports,” the minister added.
Sirika noted that Nigeria Air, the proposed national carrier, was part of the new roadmap and could be delivered before 2023.
He said, “We are on it. The transaction adviser has brought in the outline business case.
“It is being reviewed by Infrastructure Concession Regulatory Commission, Soon after it finishes, it will go to the Federal Executive Council and it will be approved.
“We will not leave this government without having it in place.”
He defended why Lokoja, Kogi State needs another airport, saying it is an alternative to the Nnamdi Azikiwe International Airport in Abuja.
He said, “Lokoja is an important northern town. It is a cosmopolitan town, it’s a mini Nigeria and it is extremely very important in growth and development of our country.
“We have a lot of agricultural activities there. There is fishery, there is perishable item production and so on.
“So, establishing an airport there is quite apt. For me, it is something we should have done long ago for its importance.”
FG Says Over N6 Billion Disbursed to Poor Households in Zamfara
Over N6 Billion Disbursed to Poor Households in Zamfara
The Federal Government said it has disbursed over N6 billion under the Conditional Cash Transfer (CCT) scheme to poor households in six out of the 14 local governments in Zamfara in 2020.
The Minister of Humanitarian Affairs, Disaster Management and Social Development, Hajiya Sadiya Umar-Farouk disclosed this on Tuesday during the flag off of Grant for Rural Women Project in Gusau.
The minister said the CCT program was created in 2016 to address the deficiencies in capacity and lack of investment in human capital of poor and vulnerable households.
“The programme is designed to deliver timely and accessible cash transfers to beneficiary households.
“And sets to support development objectives and priorities, to achieve improvement in health and nutrition, school enrolment and retention, environmental sanitation and empowerment among others,” she explained.
Umar-Faruk said a total of 130,000 beneficiaries from Anka, Bungudu, Birnin Magaji, Kaura Namoda, Tsafe, and Talata Mafara local government areas received between N30,000 to N80,000, depending on the dates the beneficiary enrolled in the programme.
Speaking on the grant for Rural Women, the minister said the programme was introduced to deepen the social inclusion agenda of President Buhari administration that includes lifting 100 million Nigerians out of poverty in 10 years.
“It is designed to provide a one-off grant to some of the poorest and most vulnerable women in rural Nigeria.
“A grant of N20,000 will be disbursed to over 150,000 poor rural women across the 36 states of the federation,” she said.
Delta State Gov Okowa Presents N378.48 Billion Budget for 2021
Ifeanyi Okowa Presents N378.48 Billion Proposed Budget for 2021
The Executive Governor of Delta State, Senator (Dr) Ifeanyi Okowa, on Tuesday presented a N378.48 billion budget to the state’s House of Assembly for consideration for the 2021 fiscal year.
The budget christened “Budget of Recovery” appropriated N207.52 billion for Capital Expenditure while Recurrent Expenditure was allocated N171.32 billion.
According to the Governor, capital expenditure accounted for 54.76 percent of the budget while 45.24 percent represented recurrent expenditure.
He explained that the allocations were in line with his administration’s agenda of spending more on projects and programmes that would impact positively on the socio-economic well-being of the people of Delta.
The proposed budget for 2021 is N96.2 billion or 34.05 per cent more than the N282 billion approved for 2020.
The governor said that the 2021 budget proposals reinforced the state government’s commitment to road infrastructure, education, health, job and wealth creation programmes as the principal-drivers of the Stronger Delta agenda.
According to him, N113 billion, representing 89.94 per cent of the capital budget is allocated to the economic sector while N35 billion is allocated to the social sector; the administration sector got 10.93 billion and the regional sector, N42 billion.
“In 2021, we propose to spend N66.66 billion on Road Infrastructure; N6.79 billion on Health; Education will gulp N23.55 billion; Agriculture, N2.04 billion and Water Sector, N1.83 billion.
“Job and Wealth Creation Bureau will gulp N1 Billion and Youth Development, N1.25 billion. These key sectors are very essential in our 2021 budget,” Okowa said.
Okowa also explained that due to the negative impact of COVID-19 on the economy and the world at large, government spending was significantly affected by the global pandemic and that Delta was no exception.
The governor, therefore, stated that “the proposed 2021 Budget for Delta is primarily focused on protecting and supporting our people in a COVID-19 environment, accelerating infrastructural renewal, incentivizing growth, enhancing job creation, engendering social inclusion and developing sustainably.
“Overall, the proposed 2021 Budget is predicated on inclusive economic growth that is sustainable and people-centred, with strengthening fiscal sustainability through increased efficiency in spending, improved revenue mobilization and debt sustainability.
“It also entails improving processes and systems in Public Financial Management, and Monitoring and Evaluation, to bolster better public sector service delivery.”
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