Energy

Multibillion naira consumers’ debt: Regional power pool under threat

Babatunde-Fashola

… As Togo, Benin delay release of $115.91 million debt to Nigeria

By Ayobami Adedinni

The Managing Director, Transmission Company of Nigeria,(TCN) and Chairman of West African Power Pool ( WAPP), Mr. Usman Gur Mohammed has revealed that the continued sustainability of cross border electricity transactions is being threatened by payment for electricity.

  It will be recalled that following a meeting with the Communauté Électrique du Bénin (CEB), an international electricity firm co-owned by the governments of Bénin and Togo, Nigeria had requested the CEB to pay up its outstanding debt for electricity supplied to it.

The federal government  also stated that it needed CEB to settle its outstanding bills to enable it maintain its supplies obligation to both countries.

The federal government has also stated that it needed CEB to settle its outstanding bills to enable it maintain its supplies obligation to both countries.

 In August 2017, the Nigerian Bulk Electricity Trading Plc (NBET) disclosed during the monthly meeting of operators in the power sector, that some international customers owe Nigeria about $115.91 million for electricity supplied to them over  a period of time.

According to the NBET, CEB of Benin Republic and NIGELEC of Niger Republic were indebted to the tune of $101.46 million and $14.45 million, respectively.

Nigeria provides power supply to the two countries through the NBET and Transmission Company of Nigeria (TCN), with power purchased by NBET from the Generation Companies (GenCos) and transmitted to CEB and NIGELEC by the TCN.

However, the minutes stated: “The representative of NBET informed operators that a reconciliation meeting between CEB and NBET was held in Lome, Togo, where CEB was reminded to always make payments as at when due since the market was contract-based.”

“The Nigerian delegation to the meeting also requested CEB to pay the reconciled amount to enable Nigeria meet its obligation of supplying power to them,” the communique added.

Speaking at the 12th General Assembly of WAPP  in Ghana, Mohammedargued that the harmonization of policies coupled with investor support to the sub-region will foster the smooth operation of energy experts by way of leveraging more resources.

He said, “our technical and financial partners will require more support for our project but also harmonization of policies, coordination and co-financing to leverage more resources”.

“To investors, given the existence of a huge lack of access, this part of the world will present the best potential for investment. However, we need your understanding as we try to create the enabling environment for the establishment of successful electricity market,” he added.

Specifically, he also noted that the integration of national transmission systems in West Africa and the creation of an electricity market are about the most important steps aimed at regional integration.

According to him, the effort of WAPP is being threatened by policy inconsistencies of some of governments of the region.

In his words, “Such inconsistencies if not quickly checked would greatly affect the capacity of WAPP to raise project funds from international donors.

“It is important to highlight that the cross border electricity market cannot be successful without member countries of WAPP providing cost reflective tariffs and well-functioning distribution networks (companies).

“A systematic approach needs to be looked into to resolve the revenue collection issues.

“Presently, nine out of fourteen mainland ECOWAS Member countries are interconnected. The remaining countries (Sierra Leone, Guinea, Liberia, Guinea Bissau and Gambia) shall be interconnected to the regional grid after the completion of the Cote d’Ivoire-Liberia-Sierra Leone-Guinea Interconnection and the Guinea-Senegal-Guinea Bissau-Gambia Interconnection; both projects would be completed in 2019″.

 Speaking further, he said, “Although the implementation of our priority interconnection and generation projects still remains a major thrust of our WAPP focus and strategy; the establishment of the information and coordination centre (ICC) and the apparatus of electricity trading has also gained increased momentum and relevance.

 ”Let me at this juncture single out the European Union for the grant of €30 million for the construction of the Information and Coordination Centre (ICC) which started in January 2017 and is progressing smoothly. The project has five control centers (CACs) in Nigeria, Ghana, Cote d’Ivoire, Guinea and Senegal and would be completed on schedule in December 2019.

“WAPP Executive Board has approved the condition precedent for the take-off of the Phase 1 of the Regional Electricity Market; what is still outstanding is the approval of ERERA- The Regional Regulatory Agency.

“This is necessary since payment for electricity consumed is threatening the continued sustainability of our effort,” he said.

He stated that WAPP has secured significant support for the training of its staff, and that of Members Utilities especially from the World Bank.

 ”WAPP is also working with the World Bank to provide securitization in the form of partial risk guarantee in order to strengthen the cross border electricity transactions.

 ”WAPP is further conducting training need analysis to determine its comprehensive requirements. This also include the current effort aimed at  transforming some of our existing training centres in Kainji (Nigeria), Calavi (Benin), Akuse (Ghana), CME (Cote d’Ivoire) and Cap des Biches (Senegal) into regional centres of excellence where the curricula will be specifically developed to satisfy our needs,” he added.

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