The projected gains expected from the over $7.5 billion loans taken by the President Muhammadu Buhari administration to overhaul the transmission segment of the electricity sector and deliver stable supply have remained a mirage with a few days to the end of the administration.
Recall that the World Bank, African Development Bank (AfDB), Japan, France Development Agency and other financiers borrowed Nigeria over $7.5 billion to improve the weak wheeling capacity of the transmission network and the grid.
But alleged widespread corruption, political considerations, non-alignment of the infrastructure, and the inability of the distribution companies to increase their off-taking capacity, among other factors, have made the kind-heartedness of the lenders meaningless and government efforts futile.
Aside from the $2.3 billion Siemen’s deal, which was targeted at improving transmission infrastructure, Nigeria had taken a $486 million loan from the World Bank under the Nigeria Electricity Transmission Project (NETAP). Japan extended a $242.4 million loan to the federal government for the implementation of the Lagos and Ogun Power Transmission System Improvement Project, just as the House of Representatives in 2017 disclosed that foreign loan to the Transmission Company of Nigeria, (TCN) totalled $1.5bn, with a separate $500m loan being negotiated with the Islamic Development Bank.
Recall that the Islamic Development Bank last year approved a total financing of $1.8 billion for Nigeria with the electricity loan expected to be a part of it. Minister of Finance, Zainab Ahmed had, in 2020, said the Federal Government requested a $3 billion World Bank loan to finance the transmission network. The fund was provided in four tranches of $750 million each. The African Development Bank (AfDB), in 2019, approved a $210 million loan for the upgrade of the electricity transmission and distribution network.
In the North, particularly in Adamawa, Bauchi, Borno, Gombe, Plateau, Taraba, and Yobe as well as Kafanchan area in Kaduna State, the Transmission Company of Nigeria (TCN) listed 38 projects funded by facilities from the World Bank, Federal Government budget, TCN-generated revenue and Presidential Power Initiative (PPI). The PPI is being funded through the Siemen deal. Nine of the projects are reportedly completed.
In the Kaduna region of TCN, which interfaces with Kaduna Electricity Distribution Company (KAEDCO) and Kano Electricity Distribution Company (KEDCO) through the 132/33kV Funtua sub-station, the company listed 36 projects across Kaduna, Zamfara, and Kebbi States, and a part of Niamey in Niger Republic. Five of the projects are reportedly completed. The projects are being funded with loans from France Development Agency, World Bank, AfDB and revenue from the agency.
Amidst others across every part of the country, the Abuja region of TCN, which covers Abuja, Nasarawa, Kogi, parts of Edo, Niger and Kaduna States has eleven projects, five of which have reportedly been completed. However, in spite of these investments, rather than the supply stabilising, the distribution companies have dropped load off-take from about 4,000 megawatts in the last few years to about 2,900 megawatts as of yesterday.
Players in the sector have submitted that the investments are not yielding results, not only because of political considerations but because the Nigerian power sector has refused to complete its transition from a government-owned and operated sector to a market-oriented system.
While expressing optimism about some glimpse of light at the end of the tunnel, stakeholders have said the sector must move from being politically-driven to being economic or commercial-oriented, otherwise the optimism would remain elusive.
