Owing to incessant power outage due to aging decayed infrastructure, Nigeria plans to build a $5.8 billion hydro-power plant in the eastern Mambila region this year. The country has agreed on loan terms with China’s Export-Import Bank.
According to the minister of Power, Works and Housing, Babatunde Fashola, “We hope to break ground this year if we can conclude the financing, contracts are in place. We are good to go.” The minister discloses that the Chinese lender would finance eighty-five percent of the cost, and the Nigerian government fifteen percent. China Civil Engineering Corp. will build the 3,050-megawatt power plant over five years, and the facility will include four dams measuring 50 meters (164 feet) to 150 meters high, and 700 kilometers (435 miles) of transmission lines.
Nigeria, a country of 180 million people living with daily power cuts is seeking to expand electricity generation to drive growth after the economy contracted in 2016 for the first time in 25 years which many have attributed partly to poor power supply.
The government expects power-production capacity to increase to 8,600 megawatts in a year from 7,000 megawatts currently. South Africa, with a third of Nigeria’s population, has an electricity-generating capacity of more than 40,000 megawatts and hopes that electricity will improve in the country owing to the new gesture. Transformers with a combined capacity of 1,400 megawatts will be deployed across the country to further boost electricity supply. Transmission capacity currently stands at about 7,000 megawatts.
Nigeria plans to improve distribution capacity, currently at about 5,000 megawatts. Since the country is able to produce more electricity than it can distribute, some production capacity will remain idle until the government expands the network. The government is looking to partner with private companies to invest in mini-grid projects and generate an additional 3,000 megawatts of electricity over five years,
Fashola added that investors are showing interest without further details. The minister noted that a number of planned solar power projects have failed to secure funding and should be reassessed. State-controlled Nigeria Bulk Electricity Trading Plc (NBET), signed preliminary power-purchase agreements in 2016 with private companies for fourteen solar projects meant to generate 1,125 megawatts of electricity, but there have been issues over payment-related guarantees.
These should be redesigned to sell electricity not only to the government via the national grid but to customers in remote areas directly.
The minister pointed out clearly that “They should rethink their models and begin to look at estates and communities.” He disclosed that the government is also working on regulations to license suppliers of electricity meters to stop some distribution companies from billing arbitrarily, Fashola said. “We want to open the meter market because the core business of a distributor is not metering but distribution of energy.”