FG signs 250MW power sale deal with Discos

The Federal Government through the Niger Delta Power Holding Company has signed a Power Purchase Agreement with utility companies to distribute a total of about 250MW across the country.

A document obtained from NDPHC by The PUNCH said the power sale transactions have been signed since the inception of the ‘Light Up Nigeria’ programme currently running under Vice President Shettima.

The Disco offtakers include,  Eko Electricity Distribution Plc, Compagnie d’Energie Electrique du Togo, Sunflag Steel Industries Limited, Lagos, Wewood Limited, Omotosho, Ondo State, APLE Electric Limited, Pulkit Alloy & Steel Limited, Lagos.

Others are ABV Utility Limited, Lagos, Ayingba Independent Electricity Distribution Network Limited, Ondo South, Avatar New Energy Limited, Phoenix Steel Mills Limited, Agbara Industrial Area, and Ota & Sagamu Interchange.

NDPHC said in the document that the goal of the programme was to sell the current capacity available, and develop more, and that the power generation projects were all funded through the Excess Crude Account properly approriated by FG and the States between 2005 and 2009.

NDPHC’s installed capacity so far is 4000MW.

Despite the foregoing achievements, NDPHC said its operations are hampered by a number of systemic challenges which have significantly affected its cash flow.

The company listed some of the challenges as; transmission constraints, gas supply and transportation constraints to guarantee generation up to TCN-allocated evacuation capacity of 975MW, let alone full capacity of its power plants.

NDPHC currently has 10 power plants, however, it revealed that Calabar is the only plant with full gas supply.

“Plants in western axis require about 150MMSCF/day to meet TCN-allocated evacuation capacity 535MW (Peak).

Gas supply to western axis power plants is further challenged by low pressure on NGIC gas pipelines –ELPS & Oben-Ajaokuta. Gas suppliers want higher gas tariff beyond industry approved gas tariff ($2.50 vs. $2.18),” the Company said.

The PUNCH had ealier reported how huge debt of about N190bn by mostly government agencies had hampered operations of the company.

In resolving the challenges, NDPHC said it was “obvious more investments were needed.

“It is obvious that a lot more investment is required in transmission and government a lone cannot do this,” it said, calling for an “urgent private capital mobilisation.”