FG sets to invest N72bn in Discos to Improve Electricity Supply

The Minister of Power, Works and Housing, Mr. Babatunde Fashola, recently disclosed that federal government will invest about N72 billion to improve distribution infrastructure in the 11 electricity distribution companies (Discos) in Nigeria.

Fashola said the investment would be part of the government’s 40 per cent shareholding in the Discos. He noted that while the Federal Executive Council (FEC) has approved the investment plan, adverts calling for original equipment manufacturers (OEM) for transformers and other distribution equipment to come up with their proposals have gone out and the government was waiting for responses.

Speaking through the Permanent Secretary in the ministry, Mr. Louis Edozien, when he commissioned a 132/33kV transmission substation with a 40MVA transformer that was built by the Transmission Company of Nigeria in Mayo Belwa area of Adamawa State on Sunday evening, the minister charged the 11 Discos to invest more in their networks to complement the grid expansion efforts of the TCN and the government’s N72 billion commitment to their networks.

He further confirmed this yesterday while presiding over the May 2018 edition of the monthly power sectors’ operators meeting in Yola, capital of Adamawa State.

“I can also report that we are making progress on the federal government’s planned intervention in the distribution value chain to help deliver the 2,000MW that is constrained by distribution equipment.

“The advertisements for quotation by original equipment manufacturers for transformers, breakers, and associated equipment compiled by the Discos have been published, and we await responses,” said Fashola.
The government had within the privatisation exercise retained 40 per cent stake in the Discos. The planned financial intervention would be the first ever direct funding to the Discos by the government since the exercise was completed in 2013.

Also, it had provided a N701.9 billion Payment Assurance Guarantee (PAG) to support the Generation Companies (Gencos) through the Central Bank of Nigeria (CBN) and Nigerian Bulk Electricity Trading Plc (NBET), just as the CBN disbursed a loan facility worth N213 billion under its Nigerian Electricity Market Stabilisation Fund (NEMSF) to all operators in the power sector including the Discos.
During the commissioning the TCN facility, Fashola said with the new 40MVA Mayo Belwa substation, over seven towns in Adamawa, including Mayo Belwa, Numan, Jada and Lamorde will witness improved electricity delivery.

He added that ministry complemented efforts of the TCN by installing distribution transformers in the franchise area.
“With this development, TCN has not only improved the quality of power in this area but it has also increased the wheeling capacity of TCN which was last simulated in December 2017 to be above 7,000 megawatts,” he said.

According to him, TCN has acquired vast lands to upgrade the new substation to a 330/132/33KV substation and its 132/33KV Jalingo substation to evacuate more power to states in the North-east.
He said while the procurement has advanced, the 330/132/33KV Yola substation will be upgraded by 350MVA capacity as a 150MVA, and two units of 100MVA transformers will be installed along with other equipment.

To further upgrade power supply in the North-east, the minister explained that the government has resolved get past the hurdles of completing the 40 megawatts (MW) Dadin Kowa hydropower plant in Gombe State.

He noted that the transmission line for the plant would be completed by the TCN which will also install Static Var Compensator (SVC) in Gombe to improve the quality of power in the region.
On the operations of the Yola Disco since it was handed back to the government in 2015 by its core investor – Integrated Energy and Distribution Marketing Company (IEDM), which declared a force majeure on its operation, Fashola stated that the government’s decision to hold on to the running of the Disco had paid off.

He said so far, the government has been able to prove that the Disco can operate viably and was not a waste, adding that Yola Disco has since its return to the government picked up and improved on its operations.

According to him, about 80 per cent of the power lines within the Disco’s network that were damaged by Boko Haram have been restored and working.
Besides Fashola’s claims, the Managing Director of Yola Disco, Mr. Mustapha Baba-Umara, disclosed that the Disco has improved its revenue collection by 200 per cent, an indication that it has limited challenges with collecting its revenues for electricity supplied to consumers in its network.

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