59% of industries exit national grid due to high tariff – Minister
Minister of Power, Adebayo Adelabu says more than 59 per cent of industries in Nigeria are off the national grid due to high tariff and unreliability.
Adelabu, who spoke in China, highlighted the fragility of the transmission and distribution infrastructure which he said have become old and dilapidated.
“This has led to historical epileptic supply of power to households, industries and businesses. More than 59 per cent of industries in the Nigeria are off the grid. They do not see the national grid as reliable and dependable. So a lot of them now operate their own captive, self-generated power,” he stated.
Adelabu however said the administration of Bola Tinubu was determined to transform the power sector.
The minister said $800 million would be released under the Presidential Power Initiative (PPI) to significantly enhance the efforts at revamping the country’s power supply nationwide.
Adelabu said the funds will be utilised for the construction of electricity substations and distribution lines under the Siemens project started during the administration of Muhammadu Buhari.
Adelabu, according to a statement from the ministry, spoke during a facility tour of TBEA Southern Power Transmission and Distribution Industry in Beijing, China, while attending the China-Africa Cooperation Summit.
The Siemens aims to modernise, rehabilitate and expand the national grid by investing in the electricity value chain, including generation, transmission and distribution systems“The money will ensure the construction of substations for Lot 2 as well as substations and distribution lines for Lot 3 at a cost of $400 million each. Lot 2 covers Benin, Port Harcourt as well as Enugu Distribution Companies’ (Discos) franchise areas, while Lot 3 covers Abuja, Kaduna, Jos and Kano Discos franchise areas,” the statement added.
Now long delayed, in July 2019, the federal government signed the power project deal with the German engineering firm, Siemens to deliver 7,000 megawatts of electricity to the national grid by 2021, and 11,000 megawatts by 2023 — in phases one and two of the initiative, respectively.
A year later, the federal government approved the payment of €15.21 million and N1.708 billion as counterpart funding for the project. In December 2021, the Federal Executive Council (FEC) also approved $1.9 million and €62.9 million for phase one of the project.
The planned $800m financing by the federal government in the three-phased project which is meant to expand Nigeria’s electricity to 25,000MW when completed, is believed to be another part payment of the counterpart funding by Nigeria.
“Our plan is that by the end of the year, we aim to achieve 6,000 megawatts of power through a combination of hydroelectric power plants and our gas-fired power plants. We are also targeting 30 gigawatts of power to be generated, transmitted and distributed by year 2030, out of which 30 per cent would be renewable energy,” the minister said.
