There has been renewed fears regarding the state of Nigeria’s power generation industry by its GenCos over the increasing problems facing the power sector, saying that nearly N1 trillion in arrears as well as N2.37 trillion in stranded electricity generating assets are posing risks to the survival of the industry.
This was stated by Dr. Chuukkeloka Ume, Chief Executive Officer, Fedicorp, in an interview on CNBC, adding that this situation is a result of the structural challenges that exist in the electricity value chain in Nigeria.
As per him, there is a lot of financial trouble for the power generators due to lack of adequate payment, poor transmission and electricity distribution infrastructure.
As per Ume, despite Nigeria having over 200 million people, the nation produces not more than 4,000 megawatts of power per day. He opined that Nigeria should be generating at least 60,000 megawatts of power.
He added that although there is great potential for power generation, the inefficiencies in the transmission and distribution processes limit the ability of the generated electricity to reach the end users. Consequently, great investments in power generation go to waste.
The energy expert also criticized the government-run Transmission Company of Nigeria (TCN) stating that the transmission network is old and incapable of meeting the increasing electricity demands in the country.
He urged the urgent privatization of the transmission system to attract investors and increase efficiency.
Ume added that uncertainties in policies as well as amendments to the Electricity Act may deter investors from making investments in the industry.
He emphasized that it is imperative to solve the issue of debts, build the capacity of infrastructure and provide stable policies for the creation of an electricity system capable of meeting the country’s ambitions.
