FASHOLA: NNPC’S PIPELINES TO ADD 2,000 MW TO POWER

December 12, 2015 – Minister for Works, Power and Housing, Mr. Babatunde Fashola has said that the Minister of State for Petroleum, Dr. Emmanuel Ibe Kachikwu will build critical pipelines to transport gas to power plants that would add 2,000 megawatts to Nigeria’s stock of power in the next 12 to 15 months.

The minister who spoke during a scheduled inspection of Egbin Power Station in Lagos said the feat would be achieved subject to budgetary provision.

He said his office has identified 142 ongoing power projects across the country aimed at improving on current power supply. He said that 45 of the projects have progressed up to 50 percent adding that 22 of them could be completed in a year and that the ministry intends to aggressively pursue completion to increase the carrying capacity from the Gencos to the Discos.

“From there, we must expand the carrying capacity to run ahead of the generating capacity so that in future there will always be capacity to carry whatever power is generated”, he said.

Fashola who described tariff as the most complex challenge, said the role of government is to set the tariff and that government is committed to a Multi-Year Tariff Order.

“The tariff is the price of producing power. It covers cost of generation, gas purchase, transportation, transformers, staff costs and so on, disaggregated and charged per kilowatt/hour to make the business of power profitable. What government did was to spread it over a number of years so that the impact is not felt at once but over a periodic incremental process,” he said.

The minister note that in 2015, N9.606 billion was budgeted for power, out of which N4.476 billion was for recurrent expenditure, covering salaries and overheads, while N5.130 Billion was for capital expenditure. He noted that this was not enough to complete only 22 of the 142 existing transmission projects estimated at over N40 Billion.

“Apart from these there is a 10Megawatt wind energy project in Katsina nearing completion, a 215 MW plant in Kaduna and the 3,050 MW plant in Mambilla Taraba State all of which need to be completed”, Fashola said adding that in such cases, the tariff may be higher than the current official tariff, but that it would be “many times a significant improvement on what they have”, he said adding that he will need the collaboration of the Discos to achieve this”.

He disclosed that his ministry would expand and enlarge transmission lines locally called “High Tension Wires” which run on high towers.

“Government is now a regulator through the National Electricity Regulatory Commission (NERC) which is like the National Communications Commission (NCC) which regulates Telcos. We intend to strengthen this part of our responsibility so that we can hold the Gencos and Discos to their contracts with citizens. But before we do that, we must play our own role of providing gas and expanding the Transmission Network”, he said.
To bring about the needed transformation, the minister condemned current budget that is skewed in favour of recurrent expenditure.

“The first thing that must change is the Capital to Recurrent ratio of the budget, and our colleagues in the Ministries of Finance and Budget and Planning are working on this and they will address you at their own time on the changes they have made and what citizens must do to enable them achieve that plan. As I have had cause to say before, the budget is the article of faith of every serious nation and government and our resolve to do more capital spending with less resources must be indicative of our seriousness to reflate this economy”, the Minister said.