The Federal Government has concluded plans to increase electricity tariffs by April 2011 as part of the measures to stimulate investment in the power sector, in accordance with the roadmap launched last year.

In a progress report on the implementation of the roadmap released yesterday, Chairman of the Communications Committee of the Presidential Task Force on Power (PTFP), Dr, Abimbola Agboluaje, said the Nigerian Electricity Regulatory Commission (NERC) had initiated studies and consultations to determine a level of tariffs that would stimulate investment by making it possible for investors to recover their costs.

He said adverts inviting companies to submit Expressions of Interest in taking up 51 per cent stake of the 6 generation and 11 distribution PHCN successor companies had been published.
According to him, interested companies are to submit Expressions of Interest by 18 February 2011.
Shortlisted companies will be invited to submit bids for the successor companies early in the second quarter of 2011 and winning bidders will take over management of the companies by the end of the second quarter of 2011, he said.

He said investors and lenders such as Goldman Sachs, Siemens AG, Royce Rolls, JP Morgan, Suzlon Energy attended the presidential retreat held last year and Essar committed to invest $ 2 billion in Nigeria's power sector after the event.

Agboluaje also disclosed that investors under the auspices of the Commonwealth Business Council also expressed an interest in investing $20 billon.

He enumerated other achievements of the PTFP to include the appointment of transaction adviser, CPSC Transcom, in December 2010 to assist the Bureau of Public Enterprises in undertaking the divestiture transactions and the invitation of Power Grid of India, ESB International of Ireland and Manitoba Hydro of Canada, to submit technical and financial proposals for the management contract of the Transmission Company of Nigeria.

On the corporatisation of PHCN Successor Companies, Agboluaje said the companies are now de facto independent entities, thereby putting the PHCN in winding-up mode.
All of the PHCN successor companies are set to enter the Transition Stage of the reform when they will buy and sell electricity based on contracts agreed with each other and stop operating as parts of a government monopoly financed through a common budget and obliged to provide power or electricity evacuation services to each other without payment. This will create incentives for the power companies to provide service to as many Nigerians as possible as frequently as possible so they can earn money to pay for their inputs and operational costs he said.

He noted that the winding up of PHCN central head quarters was underway, adding that the headquarters staff have started moving out to the Ministry of Power or to successor companies.

Agboluaje also stated that an arrears of monetisation benefits worth N57 billion had been paid to PHCN workers, while the government had secured an additional N143 billion from the National Assembly as part of the supplementary budget of 2010 to compensate current PHCN workers for the severance of their current employment contracts with the government.

THISDAY had reported that there was uncertainty over the actualisation of the key tasks in the power sector roadmap as some of the action plans scheduled for completion at the last quarter of 2010 could not be actualised at their target dates.

This slow progress of the roadmap, which was launched by President Goodluck Jonathan on August 2010, has also fuelled concern that Nigerians could witness longer years of epileptic electricity supply than envisaged.
According to the roadmap, power generation would hit 5,379 megawatts by this December.

Under this action plan, 2278 megawatts and 1,230MW would come from Federal Government-owned gas-fired plants and hydro power stations, respectively; 351MW from the National Integrated Power Projects (NIPP) and 1,520MW from Independent Power Producers (IPPs).

But available statistics indicate that current generation hovers around 3,500MW, which is even below generating capacity at the period the roadmap was launched.

Wonderful news.