THIS MEMO IS THE PROPERTY OF THE

NATIONAL COUNCIL ON POWER (NACOP)

SECRET
NACOP (02)
JUNE, 2016

POWER GENERATION/ALLOCATION OF POWER SUPPLY TO KWARA STATE
AND POST PRIVATIZATION DEVELOPMENT AS IT AFFECTS THE
INVESTMENT OF KWARA STATE GOVERNMENT IN POWER DISTRIBUTION

MEMORANDUM BY HONOURABLE COMMISSIONER FOR ENERGY, KWARA
STATE, ENGR. ABUBAKAR IDRIS GARBA.

The purpose of this memorandum is to appraise the council about the following:
(a) Power generation to drive socio-economic activities in the country;
(b) Post- privatization development as it affects the investment of Kwara State
Government in Power distribution and modality for recovery of the investment;
(c) Allocation of adequate Power to Kwara State from the national Control Center;
(d) Metering menace by Discos and their negative impact on the consumers;
(e) Micro grid Solar Power for the Development of Rural areas;

(A) Power Generation to Drive Socio-Economic Activities in the Country:
Adequate Power Generation is the key to survival of infrastructural development
of any developing Nation. This in effect has affected the socio-economic activities of
virtually the inhabitants.

Nigeria has installed generation capacity of about 8.6MW of which 6.9MW is
government owned. It is noteworthy to mention that the population has increased
tremendously in the last two decades to Power generation capacity. It is obvious that
27,000MW will be required in the next five (5) years to meet the Power demand of the
total Populace in order to woo investors and to stabilize the economy as envisioned in
the vision 20-20-20 target.

Power generation sector can be classified into the following sub-sectors:
(i) Existing Federal Government of Nigeria (FGN) Power Generation facilities,
which are mainly Hydro/thermal powered in nature. This include Kainji/Jebba
Power Station, Shiroro Power PLC, Egbin Power PLC, Delta Power PLC, Sapele
Power PLC, Afam Power PLC Calabar thermal Power Station and Oji River

1

6MW. The designated capacity of the above mentioned NIPP projects is estimated to be 4775MW with Zero MW current capacity. Egbema Power Project. Ihoubor Power Project. The Eleven (11) distribution companies are:  Abuja Electricity Distribution Company (AEDC)  Benin Electricity Distribution Company (BEDC)  Eko Electricity Distribution Company (EKEDC) 2 .258MW’. Omotosho Phase II Project and Geregu Phase II Project. Power Station. Afam. There are also some new Independent Power Producers under the auspices of the Niger-Delta Power Holding Company (NDPHC).759MW while the available capacity is 1. AGIP – OKPA I Power Station.730 – 3200MW as a result non-functional hydro power stations and unprecedental vandalization /destruction of gas pipe lines.904. These include. (ii) Independent Power Project The IPP’S are the non-federal Government funded investments in the Nigerian Power Generation Industry.Egbin Electricity Generating Company (EEGC). (iii) National Integrated Power Projects (NIPP) The NIPP is funded and owned by three tiers of Government and they include calabar Power project. The unbundling of Power Holding Company of Nigeria (PHCN) which was officially commissioned on the 5th of May. The total installed capacity of Independent Power Stations is 1. AES Power Station. Sapele Power Project. Omoku Power Project. ASG-IBOM Power Station. Sapele. Ughelli. The installed capacity of all the aforementioned Power Stations is 6. while the available capacity is 3. The current average power generation in the country varies between 1. RSG- Trans Amandi Power Station and RSG-OMOKU Power Station. Shiroro and Kainji. Alaoji Power Project. 2005 gave birth to 18No companies as follows:  Six (6) Generation companies(GENCOS)  One (1) Transmission company (TCN) and  Eleven (11) Distribution companies(DISCOS) The Generation companies are: . SHELL Afam VI Power Station.484MW. Olorunsogo-Phase II Power Project. The reason for this is that the facilities are currently being constructed and yet to be completed/ commissioned.

Conclusively deregulating of Power Sector is key to the present menace. many of the stakeholders which include (but not limited to) the PHCN. benefitting Communities.privatization development as it affects the investment of Kwara State Government in power distribution and modality for recovery of the investment We are all aware of the trend of development that finally resulted in the eventual privatization of the power sector in Nigeria. All bottle neck hindering effective setting up of the bucket type of Power generation across the nook and cranny of the Nation should be eliminated.  Inadequate operations and maintenance. while it holds on the generating company is 20% (with 80% of equity sold to private investors) and from the distribution companies. Federal Government should make it a matter of policy to extend gas pipelines to each of the State Capital or Geo Political Zones. Prior to the privatization. have been investing in one way or the other in the Power sector by way of installation of transformers of various rating/replacement of burnt ones. Corporate bodies and individuals. eleven of them Government only sold 60% and is still holding 40%.  Lack of Human capacity development.  Absence of diversified generation to serve as an alternative means of injecting Power to the National grid. extension of low and high tension networks. There are lots of problems with the issue of Power generation in the country as a result of the following: -  Under investment which has led to stagnated Power Generation Growth. 3 . The Federal. so that it could embark on Independent Power generation using gas turbines. Enugu Electricity Distribution Company (ENEDC)  Ibdan Electricity Distribution Company (IBEDC)  Ikeja Electricity Distribution Company (IKEDC)  Jos Electricity Distribution Company (JEDC)  Kaduna Electricity Distribution Company (KDEDC)  Kano Electricity Distribution Company (KNEDC)  Port-Harcourt Electricity Distribution Company (PHEDC)  Yola Electricity Distribution Company (YEDC) Federal Government owns 100% of the transmission company. State and Local Government. (B) Post. This has been the trend before the move for the privatization became a reality in the year 2012. installation of vandalized/damaged Power lines etc.

from January to June. derivable benefits either in cash or rebate for her huge financial investment.000. In the same vein. However. Considering the magnitude of State Government intervention in the Power distribution network. Kwara State Government like many other States of the Federation concluded the first phase of the process and her total investment was evaluated to be N6. Between January 2013 to date the sum of N951. Consultant would still be engaged to negotiate either for payment of the evaluated sum of the investment or convert same to an equity in the emerging successor distribution companies.00.47. This sum is yet to be recovered nor converted to equity in IBEDC as at present.833. Kwara State Government distributed and installed 43 units of transformers of difference ratings across the 16 LGAs of the State while six rural communities enjoyed from Rural electrification project and were connected to the National Grid among others.412.491. Between January to December 2013. The prevailing issue is the difficulty for the State Government in withdrawing totally from further investment in the power infrastructural network given the limited capacity of the emerged distribution companies to adequately fill the vacuum expected to be created by the withdrawal of the State Government on one hand and the ever growing demand of customers on the other.00 has been injected into IBEDC network.668.72 as at December 31st 2012.707. 2014 eleven unit of transformers of different ratings including 2x2.000.000. it is enough to grant her a place in the stock of capital of the 4 .00 and distributed to further stabilize Power supply across the three senatorial districts in the State. The total amount of money expended in the power distribution network within the period in question stood at N526. The arrangement put in by the NERC prior to privatization was for all the State Government to engage the service of a consultant in order to evaluate their investment in the PHCN network and after that.5MVA injection substation transformers were procured and installed at a cost of N105. Another issue is the lack of proper definition of the obligation of Disco companies in extending power to new customers.345. my Ministry receives (on the average) not less than ten requests per week for either installation of new transformer to relieve the existing ones or replacement of damaged ones or extension of low/high tension networks. having confirmed the assets of the Kwara State Government to the IBEDC network which ordinarily should allow for negotiation either to be part of the emerged distribution company as a shareholder or the opportunity to enjoy certain concessions.000. On a weekly basis. Also in December 2014 one hundred and five (105 No) transformers of different ratings were purchased at the sum of N210.445.

707.00 pre privatization investment of Kwara state Government in electricity distribution network of IBDEC be either (c) converted to equity share or refunded to the State Government. It is suggested that metering of Consumers is expected to be the first line charge of Discos.72.IBEDC. due to low capacity of performance from the emerged DISCOS coupled with ever increasing demand for electricity infrastructure by the citizens. (b) That the pre-privatization in investment of the Kwara State Government as at December 2012 was evaluated to be N6.491. The question is.492. This is peculiar to Government buildings as well as some few private individuals.621. (c) Kwara State Government has between January 2013 to June 2016 invested an additional sum of N951. (b) That the sum of N7.445. Council may wish to note: (a) That. As at 30 th June . 5 .00 in the electricity Power distribution network taken over by IBEDC and has not stopped investing further. In the light of the foregoing. (C) Allocation of adequate Power to Kwara state from National Control Centre The Kwara state Government is using this forum to appeal for an increase in power allocation to the state in view of her huge investment in stabilizing power supply in IBDEC network. but as a result of low capacity of the successor company which informed serious pressure on the State Government to intervene.2016 the Power allocated to the state is 45MW as against 200MW which is considered to be grossly inadequate in view of the fact that part of Ogbomosho in Oyo state are fed from Ilorin.833.411. (D) Metering menace by Discos and their negative impact on the consumers It is imperative to emphasize the hardship being encountered by Consumers that are always billed on estimation. Council is requested to mandate all Discos to provide free Meters to all premises connected to their network. what is the prescribed treatment for this type of post- privatization investment which does not ordinarily arise. The state is quite aware of the problem of power generation throughout the country. and this sum is yet to be negotiated either to be paid in cash or converted to equity share in IBEDC. We request for an improved Power allocation to boost economic and social activities in the state. it becomes impossible for the State Government to free herself from investing further into the electricity distribution networks. APPROVE: (a) That necessary modalities and procedures be put in place for the recovery of post-privatization investments (by other stakeholders other than the emerged Disco companies) into the electricity power network.345.

6 .(E) Micro grid solar Power for the development of Rural Areas The cost of extension of electricity to rural areas is becoming unbearable to sustain. Council is urged to set a uniform standard for the deployment of Micro grid solar Power in rural areas for ease of implementation.