Federal Government secures additional $1.4bn for TCN

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In order to convince bidders of the various Power Holding Company of Nigeria (PHCN) successor companies currently being privatised that it is committed to strengthening Nigeria’s weak electricity transmission network, the federal government has announced that an additional funding of about $1.4 billion has been secured recently from various sources for the Transmission Company of Nigeria (TCN).

The disclosure, however, coincided  Monday, with the announcement by the federal government that about 30 per cent of the nation’s electricity would be generated from the coal resource through use friendly environmental technology.

But, the Minister of Power, Prof. Chinedu Nebo, while speaking at the weekend, said apart from the activated $500 million transmission network loan from the African Development Bank (AfDB) expected to be released in tranches of $100 million and the expected reinvestment of about $1.6 billion proceeds into TCN from the sale of power assets in the National Integrated Power Projects (NIPPs) framework.

He noted that a cumulative sum of $1.470 billion had been secured by the federal government to upgrade the nation’s transmission network.

Speaking when he met with members of the Independent Power Producers Association of Nigeria (IPPAN), led by its Chairman, Prof. Jerry Gana and his deputy, Mrs. Agatha Nnaji, in Abuja, Nebo said the expected capital outlay would help reposition operations at the TCN preparatory to the planned generation and distribution of about 10,000 megawatts (MW) of electricity soon.

Giving a breakdown of the expected funding sources, which he did not give details about, he explained that about $800 million was expected from the World Bank, $170 million from the French Development Bank (FDB) and $500 million from the Chinese EXIM Bank, all for projects in the transmission network.

“From the very first day I came on board, I started crying on the transmission. There are some hitches andthat is why I don’t talk about megawatts anymore. We might come up with 10,000MW and might be able to transmit all. That is why a huge sum of what is being realised as proceeds of the sale of the NIPP project, about $1.6 billion has been set out to finance transmission.

“In addition, the World Bank is funding with $800 million, there is funding from AfDB, French Development Bank  is funding with another $170 million to aid transmission. When you look at this, we would say there is a huge investment going on for transmission,” he said.

The minister further added: “We hope with these, we will be able to produce the 10,000MW and at the same time wheel it out for full distribution. I forgot to mention the $500 million we got from the Chinese EXIM bank still for transmission.”

Meanwhile, President Goodluck Jonathan, while speaking at a one-day workshop on the solid minerals sector, at the Presidential Villa, Abuja, said this would be in pursuance of his administration’s effort towards revitalising the solid mineral sector.

The envisaged endeavour, according to him, would be a follow-up to the signing of a Memorandum of Understanding (MoU) on coal to power between the Ministry of Mines and Steel Development and HTG-Pacific Energy Consortium for the development of Ezimo Coal Block in Enugu.

The president, who noted that despite this stride, the potential of the solid minerals sector were yet to be harnessed fully, charged participants to ensure that efforts were made to address the lead poisoning incident in Zamfara State.

President Jonathan said: “Minerals and metal sector is an integral part of the development template as presented to the nation at the inception of this administration. When we came in, we had articulated and continued to implement programmes and projects required to strengthen the institutions of governance and in so doing, create jobs, wealth and also increase domestic and foreign direct investments in the economy.

“In the last two years, significant progress has been recorded in minerals sector with regards to regulations and reforms, we have also taken steps to establish and re-enforce appropriate institutions. The new roadmap concerning solid minerals and the metal sector development was presented to both the FEC and the public in January this year. The essence of the roadmap was to set out guidelines for Steel development of the sector. It thus represents a significant step forward in the advancement of the sector.

“Though considerable progress has been made, in terms of results and interest of the sector, we are yet to witness the kind of development we expect. This workshop is the next step in advancing this sector to expose it to the public so that we get the investment required.”

He urged the workshop participants to come up with concrete recommendations that would speed up the realisation of the expected investments in the sector and contributions to the economic development.

“My expectation is that this workshop will produce concrete ideas and recommendations that will unleash the economic and social potentials of this sector. The volatility of solid mineral sector and the need for orderly development was clearly demonstrated in the lead poisoning incident in Zamfara State recently.

“While we applaud the efforts of all those who were involved in the issue of management and the remediation of the lead poisoning in Zamfara State, we must ensure that it does not repeat itself in the country any longer.

“I, therefore, charge you to identify the barriers to the development of the sector, including environmental, institutional and regulatory challenges and the policies that government must develop and implement to address them.

“I further charge you to focus attention on the beneficial explorations and exploitation of industrial minerals such as limestone, kaolin, silica gypsum, gemstones, ceramic clays among others, since the development of the value chains is critical to any large scale job creation efforts in this country.

“Nigeria has about 44 varieties of minerals in more than 500 locations, some of which are recognized as strategic minerals due to their high economic potentials. The country has the capacity to expand the contributions of the solid minerals sector to the economy, the fact that the minerals are served across the country is a blessing as every part of Nigeria can benefit from them.

“For instance, the coal resources presents an excellent opportunity for us to diversify our energy sources, to the extent that 30 per cent of our electricity generate should come from coal, using environmentally friendly clean technology. Nigeria is endowed with abundant coal reserves of the required quality necessary for power generation. And so there is no reason why we should not exploit that sector.

“I welcome the rowing synergy between the Ministries of Mines and Steel Development and Power, this is made manifest in their collaborative efforts to attract investors to coal-fired generation opportunity and we expect this to continue until we get to where we want to be in terms of our power needs in this country.”

On his part, Minister of Mines and Steel development, Alhaji Musa Mohammed Sada, attributed the decline in the development of the solid mineral sector and subsequent revenue loss to Federation account to previous nationalisation policy of 1970s and neglect of the sector by successive administrations.

Sada asserted while making presentations on “Overview of the Solid Mineral Sector in Nigeria”, that though the national was blessed with abundant solid mineral resources of about 44, but the nationalisation policy led to the departure of major mining companies due to unfavourable policies.

According to him, on the anomalies prevalent on the current revenue collocation from the sector, “Revenue collection efforts are not complimenting each other; the enabling revenue collection laws are not harnessed in a single document; less than 20 percent of revenue due to government is currently collected; and it creates room for multiple taxation resulting in making mining business non-attractive.”

 

Information from This Day was used in this report.