Nigeria: Government to Concession Six Hydro Power Dams

Hydro Electric Dam

The Federal Government yesterday proposed to concession six hydro dams to operators, who are expected to build, operate and transfer them.

Minister of Power, Works and Housing Babatunde Fashola broke the news in Minna, the Niger State capital, at the 29th Power Sector Stakeholders’ meeting.

He said it was part of the government’s plans to energise educational institutions and markets.

Fashola said: “These are government-led initiatives based on the rural electrification plan approved by President Muhammadu Buhari in 2016 to provide access to power for rural dwellers and vulnerable members of our society.”

He said the government proposed to use six hydro dams, which had been abandoned for decades, federal universities and markets as anchors.

“We’ve proposed to use six small hydro dams that have been abandoned for decades, Federal Government-owned universities and markets as anchors.

“The dams are to be concessioned to operators to build, operate and transfer.”

The minister said he had directed Distribution Companies (DisCos) to work out and implement competition transfer charges, in accordance with the law, to safeguard their losses.

He said he will monitor the impact of the policy and remain flexible to keep what works and change what does not.

Fashola urged stakeholders to remain open-minded, adaptive and responsive.

Said he: “The DISCOs must be interested to know that I have also issued directives to the Nigerian Electricity Regulatory Commission (NERC) to work out and implement competition transition charges, as provided by law, to safeguard them from losses.”

The minister noted that the problem with the power sector was mostly in the distribution of value chain. He stressed that the ministry introduced the Meter Asset Provider (MAP) policy to address meter supply gap, relieve the DISCOs of the financial burden of meters, “allow entrepreneurs to take up this as a business and diversify the sources of meter supply.”

Fashola recalled that the regulation and condition for its operation were issued by NERC on March 8.

He said: “Reports reaching me indicate that there is an embracement of the policy. Entrepreneurs are showing interest and talking to banks to raise finance.

“DISCOs have signed up to the government-supported fund of N37billion and we will keep an eye on the progress of the initiative.

“The government intervention in this regard is part of its role of enabling to be effective. It does not relieve the DISCOs of their contractual obligation to provide meters. On the contrary, it seeks to help them perform their contracts.”

The minister said following the N701billion payment assurance guarantee intervention for the Generation Companies (GenCos), power producers, which used to recover 20 per cent, now record 80 per cent recovery.

The GenCos, he said, would prefer 100 per cent recovery.

Following the implementation of the payment, Fashola said power supply capacity had increased from 4,000MW to 7,000MW “and there is an appetite by other players to participate.”

He said: “GENCOs must transparently invoice for their output and, for example, we must harmonise the price of gas for payment under the scheme, where there are differential prices arising from different gas suppliers.”



Please enter your comment!
Please enter your name here