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Boosting Electricity Power In Nigeria Needs Widening of Grid Says Azura

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(Credit: Photo : FLORIAN PLAUCHEUR/AFP/Getty Images) An employee at the Afam VI power plant talks on a walkie-talkie at the plant in Port Harcourt on September 29, 2015. Afam VI power plant is owned by the Shell Petroleum Development Company of Nigeria (SPDC) and maintained by Dietsmann company. Nigeria is Africa's largest producer, accounting for roughly two million barrels of crude daily. Shell has blamed repeated oil thefts and sabotage of key pipelines as the major cause of spills and pollution in the oil-producing region. NIGERIA-ECONOMY-ENERGY
February 6
11:55 PM 2016

Nigeria is the biggest economy in Africa and its demand for power supply is increasingly growing. Currently, it is unable to meet its demand for power for various reasons - one of which is the constraint experienced in the transmission of power,

Bloomberg reported quoting David Ladipo, CEO of Azura Power West Africa Ltd who stated that Nigeria must expand power transmission grid. And review terms of its management before it is able to effectively supply. 

Nigeria sold 17 state-owned power utilities three years ago. But it retained control of the transmission grid and inked a short-term management contract with Manitoba Hydro-Electric Board of Canada to run the entity now referred as Transmission Co. of Nigeria (TCN)

David Ladipo stated that the power grid is going to be the "big bottleneck" as it can only carry about 5,000 megawatts. This is less than one-third of what the country needs, to put an end to blackouts.

Ladipo, who runs the Lagos-based power generating company said, in a recent interview at Abuja the capital, "A proper concession is doable or the alternative is just to have a bigger management contract that enables Manitoba to do more", he said. David Ladipo's company Azura is investing about $900 mil to build a 450-megawatt natural gas fueled plant in the southern state of Edo.

The Azura-Edo project is to build a gas-fueled plant -to take place near a transmission line and on a gas-pipeline route. Azura announced on 21 Jan 2016 that it wants to take advantage of the growth of Nigeria's electricity market where the demand is more than three times the current output of about 4000 megawatts.

Africa Energy stated after setbacks the Azura-Edo reached financial close on 28 December and CEO Ladipo has stated that the first debt drawdown had taken place on 29 December with notice to proceed issued to engineering, procurement and construction contractors Siemens and Julius Berger the following day. Construction is expected to take about two-and-a-half years and operational in mid-2018.

David Ladipo asserted that, " there's money sitting and available, waiting to be invested into the grid, " he said. " It can't be expended because there's insufficient execution capacity." Hakeem Bello - spokesperson for Works, Power and Housing Minister Babatunde Fashola failed to respond immediately to two calls for his comments.

Leadership News notes that Nigeria's electricity companies have been hindered by inadequate capital for expansion and, erratic supply of gas. Gas accounts for 70% of the country's power generated.

Although Nigeria has the biggest gas reserves - 180 trillion cubic feet - its ability to supply regularly has been plagued by pricing disputes. And also unrest near Niger Delta River resulting in frequent pipeline sabotage.

Nigeria's transmission woes have been masked by gas supply shortages. But gas supply will eventually be alleviated and the spotlight will be on the management company namely, TCN.

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