Nigeria’s Power Sector Three Months Post Privatisation

Power supply situation in Nigeria gets increasingly worse in spite of the recent privatisation of the sector

By CHUKS OLUIGBO

Rewind to November 1, 2013. Private investors finally took over 14 (four generation companies and 10 distribution companies) of the successor companies carved out of the defunct Power Holding Company of Nigeria (PHCN) from the Federal Government of Nigeria, after being put on hold since the August 21 original handover date when they completed payment for the firms. That event officially ended the long journey to the privatisation of the power sector. The handover took place simultaneously in Lagos, Ibadan, Port Harcourt, Abuja, Jos, Ughelli, Kano, Benin, Shiroro, Kainji and Gombe.

The government had, on September 30, done a shadow handover of the assets to the core investors as it presented certificates of ownership to buyers of the generation companies (Gencos) and distribution companies (Discos). With the physical handover of the assets, the power sector effectively crossed the threshold of government monopoly to one dominated by the private sector.

High hopes, great expectations

From the beginning of the power privatisation process, Nigerians had been full of hopes that the epileptic power supply leading to incessant blackouts in the country would finally end, that power supply would become stable, and that the long-awaited industrial revolution which steady power supply was capable of stimulating would finally begin.

Besides, hopes were also very high that a lot of jobs would be generated as investors cash in on the expected spin-offs along the whole value chain of electricity generation, transmission and distribution. These spin-offs, analysts had projected, would be in the areas of provision of prepaid meters, transmission towers, line products such as insulators and arresters, transformers and spare parts, adding that the development of this supporting industry would help to facilitate the realisation of improved power supply in the country.

“If Nigeria is growing at 7 percent without power, with steady power, the growth will double; more businesses will start and employ people. Unbundling means that with private sector investment there will be more businesses in upstream and downstream. This will result in more job creation,” Sam Amadi, chairman, Nigerian Electricity Regulatory Commission (NERC), had said.

In October of last year, Oladiran Ajayi, energy expert and senior associate at Templars, a law firm, told a top financial newspaper in the country that companies had already started showing “cautious interest in investing in manufacturing, assembly and supply of materials to service the emerging industry”.

“What we are seeing at the moment is just a tip of the iceberg. We are seeing the beginning of the private sector taking over an industry that has been running at about 10 percent when it could be doing 90 percent of business. Therefore, any investor who has come in and taken an early position has a very good chance of very big returns on their investments,” said John Delano, partner in charge of seminar series on power at Akindelano Legal Practitioners.

In the area of metering specifically, the analysts had projected that there would be high demand for prepaid meters as a large number of homes and businesses were yet to be metered. They also saw an opportunity for investors in that area, given that the meters were in short supply as a result of long years of government monopoly characterised by lack of sufficient investments.

“Many Nigerians have already changed their meters to digital meters over the last couple of years. We will still require millions of meters to be installed to service the requirements of the electricity distribution companies and their customers. In this respect, different types of meters will be required, including smart meters. There are very lucrative opportunities here for either the manufacture or supply of these meters across Nigeria,” Ajayi said.

Companies such as Mojec International Limited and Momas Systems Nigeria Limited were mentioned as some of those positioning themselves to meet the growing demand for prepaid meters in the country, while in the area of filling the yawning gap in the country’s transmission infrastructure, including lines and towers, Symbion Power and Deepdrill Global Services were named. Paul Hink, managing director of Symbion, was quoted as saying that the company planned to go into the manufacturing of transmission towers in Nigeria. Similarly, Deepdrill was reported to be in partnership with Maclean Power Systems to introduce to the Nigerian market technologies such as non-ceramic insulators and arresters, among others, for transmission lines as well as generation and distribution lines.

Other opportunities in the emerging power industry, analysts had projected, would include the supply of remote sensing technologies and consumables such as spare parts for power generation plants, equipment supply, particularly pieces of equipment that improve the energy efficiency of power plants, provision of information technology-related services and products that help to remotely monitor the network including supervisory control and data acquisition (SCADA), provision of payment systems and operation and maintenance services, and supply of recharge cards to service consumers who choose to use prepaid meters. The shortfall in gas supply infrastructure in the country, they said, also presented a business opportunity for suppliers of steel, bolts and other materials required for pipeline construction.

“There would in fact now be electric power lawyers, economists, technical persons, among others,” said one analyst.

There were also projections of annual revenue generation in excess of N1.5 trillion in the transitional electricity market, which was expected to be driven by the massive metering of many Nigerian households and businesses that were yet unmetered, improved output and efficient service delivery.

While Nigerians basked in the euphoria, the investors themselves, as well as industry watchers, also expressed optimism that better days were ahead.

“It is a historic day for Nigeria as the private investors take over the assets. It is probably the most important step in the privatisation process,” said Solomon Adegbie-Quaynor, country manager, International Finance Corporation (IFC), adding that the next thing for the investors would be to take stock of the assets and prepare a good business plan, and then financiers would be willing to provide further financing.

“We at IFC are committed to supporting the power privatisation and we will engage with the private and public sector stakeholders to make sure that the environment can support further investment,” Adegbie-Quaynor further said.

Ayodele Oni, an Energy Law and Policy expert and senior associate in Banwo & Ighodalo, a top law firm, said: “It is great to be a part of the new vista that is opening in the electric power sector. I had always firmly believed that the current administration would achieve this feat provided the political will was in place. My belief was premised on the fact that the structure adopted for the privatisation of the PHCN successor companies and the reforms in the electric power sector have been successfully adopted in several other countries of the world prior to this time.”

Oni said with the takeover by the private sector of the formerly government-owned electric power generation and distribution companies, efficiency should greatly increase as the tariff structure was such that it promoted efficiency, adding that the more efficiently a company along the electricity value chain ran, the more profitable it was likely to be.

No private sector Genco or Disco, according to him, would accept the old order where equipment such as transformers would be in disuse for several months without repair because that would affect profitability as meters won’t run where there is no electricity and then Disco may not receive payments for electricity which did not flow (save for the fixed monthly fee).

Power supply dips across the country

Contrary to their high expectations of improved power supply post privatisation, Nigerians in many parts the country woke up to total blackout in the immediate days following the handover of the PHCN assets to private investors, putting businesses and homes under acute stress.

The deteriorating power situation was blamed on massive disengagement of technical personnel at the various electricity distribution zones in the country by the new investors. Indeed, the week following the handover of the power infrastructure to the new investors was greeted with a gale of sacking of technical and support staff responsible for faults clearing at various installations – at a time many of the transformers across the country were faulty. As a result, fault clearing at the distribution networks was stalled. Reports also had it that in the wake of these disengagements, power workers across the country downed their tools, an action which put many businesses and homes in darkness as many could neither recharge their prepaid meters nor rectify electrical faults.

In the Yaba Mainland business unit of the Eko Electricity Distribution Company, in the week succeeding the handover, it was observed that activities were paralysed as many consumers milled around to see if they could recharge or get their complaints sorted out all to no avail.

It was also gathered that inadequate load allocation from the generation companies was responsible for the drastic dip in power supply in parts of the country. For instance, in the first few weeks post privatisation, Ikeja Electricity Distribution Company (Ikeja Disco), which needs 900 megawatts (MW) on the average, was said to be receiving a mere 300MW. At the same time, the available generation capacity was put at 3,400MW. Some of the power plants had low output while others were completely out. Egbin had 537MW, Afam VI 428MW, Okpai 458MW, Kainji 112MW, and Jebba 451MW. Alaoji, Afam IV and V, Sapele, Omoku and Ibom plants were out.

Facing the reality

But in the midst of high expectations, analysts and industry watchers had advised Nigerians to be patient, saying that the handover of the assets was just the beginning, and not the end, of the journey to improved power supply. 

“It is pertinent to remember that this is really the beginning of a journey and not the end of a journey as some have mistaken it to be,” Atedo Peterside, chairman, Technical Committee of the National Council on Privatisation (NCP), had said at an event on September 27 in Abuja, adding that the primary purpose of the privatisation was to bring into play new owners with ‘deep pockets’ who could finance and/or access financing for the rapid restoration of lost capacity and/or add significantly new capacity to make up for decades of government neglect and mismanagement.

Other analysts had said specifically that Nigerians should not expect any significant improvement in power supply in the immediate term until after four years, that is, until 2017. This, according to them, was because investors in the power sector might have up to four years to sort out challenges in the Nigerian electricity market – including metering and transformer audit, upgrade of grid levels, and manpower training requirements – before consumers could start benefitting from the transfer of ownership of the PHCN assets to private sector management. They said it would take about 36 months to train the level of manpower that would be competent enough to handle the industry, adding that the real technical input that would be required in the distribution networks alone was yet to be ascertained because in-depth due diligence was yet to be carried out by the investors.

“Everyone who has been following this process would know that quick fixes should not be expected. These are indeed challenging times. What’s currently being experienced could be regarded as teething problems which every new comer to an industry, process or programme typically experiences. I know that NERC and the government are in talks with these investors to help mitigate some of the challenges they are facing,” said Oni of Banwo & Ighodalo.

An analyst, who did not want his name in print, said: “It would take a duration of three to four years before requisite manpower can be developed, just as it will take considerable time to carry out necessary due diligence to ascertain the actual number of consumers and level of manpower needed.”

Reuben Okeke, director general of the National Power Training Institute of Nigeria (NAPTIN), agreed that it might take as much as three years to achieve some significant improvement, adding, however, that if the investors in the distribution sector effectively managed the power they receive, there could be significant improvement in terms of supply to consumers.

As for the generation companies, the analysts said it would take a little bit longer for them to make appreciable impact. While admitting that it was normal to expect improved power supply immediately after the investors take over, they, however, advised Nigerians to be patient as there could be no shortcuts to achieving a reliable and durable power supply.

For the new core investors, who spoke on the sidelines of the handover ceremony, they clearly understood the challenges ahead of them. Having taken over the PHCN assets, they said, the first necessary step for them was to begin the arduous task of carrying out proper evaluation of the acquired assets to ascertain the level of upgrade and investment that would be required, going forward, to improve power supply in the country.

“As at now we don’t have full knowledge of what we are going to deal with until we have a true picture of what is on ground. We are going to invest in metering, cleaning up the system, cablings, transformers, and making sure that everything is in line with what we have specified. It's not going to be enough, but we will start with that. Our strategy is to continue to improve the system and eventually we will get there,” said Charles Momoh, chairman, West Power and Gas, buyer of Eko Disco, adding that they would be investing $250 million at the initial stage as capital expenditure.

Kola Adesina, chairman of the core investor group, New Electricity Distribution Company/KEPCO, buyer of Ikeja Electricity Distribution Company (Ikeja Disco), said: “You can only improve on something you understand. You don’t improve on something that you don’t understand. The entire process, the entire chain, the entire service that is being provided currently will be evaluated by us because we have never had the privilege of a shadow management. So we did not have the access into the building to evaluate the assets,” adding that everything to the minutest element would be evaluated against the global benchmark and then the upgrade of the asset would be done accordingly in those areas.

The current situation

The drop in power supply has continued unhindered across the country. But as supply in power drops, electricity consumers have been made to pay higher tariffs. In many areas across Lagos, the monthly electricity bill has gone up by as much as 100-200 percent. It appears that the less of power supply the people get, the higher the bill they are made to pay. And where consumers had expected massive deployment of prepaid meters so that they would be able to monitor and pay for only what they consume, the new owners have preferred the old system of estimated billing, leaving consumers feeling short-changed.

Olusegun Abisoye, a journalist who lives in the Okota area of Lagos, an area serviced by the Ikeja Distribution Company (IKEDC), said that power supply situation in the area has moved from bad to worse since the handover, while at the same time electricity bill has simply gone crazy.

“Before the privatisation, we got at least 10-12 hours of electricity daily, but now we hardly get up to two hours. Meanwhile, the bills have gone over the roofs. I live in a block of five flats. Before now our average monthly bill was N20,000. But the first bill we got immediately after the handover was N38,000, close to 100 percent increase. For God’s sake, this was not what we bargained for,” he lamented.

Another respondent, who lives in Festac Town, Lagos, says power supply in her area had been bad even before the November 1 handover, but it has worsened ever since.

“We use prepaid meter. Before the handover we used to buy N3,000 recharge which would last about two months, but the last N3,000 we bought since October is yet to run out because there is hardly electricity to use it. We have resorted to generating our own power, and it’s costing us a lot,” she told said.

As homes are complaining, businesses too are lamenting as their cost of production and operation has spiralled upward.

Meanwhile, the new investors in the power sector are reported to be groaning under the burden of acute revenue shortfall because the revenue leakages that existed before they took over the assets are largely unaddressed. Investigation reveals that they lose at least 53 percent of every N1 collected as revenue, meaning that 53 kobo of every N1 is lost, with analysts saying that plugging the leakages would remain one of the greatest challenges the investors would continue to contend with for some time to come because not much was done to mitigate the revenue loss before the assets were transferred to them.

Goody Duru-Oguzie, principal consultant/CEO, PowTech Group Ltd, says that so long as the old structures on ground are still there, there will continue to be revenue shortfall, adding that the investors must embrace new technology that would enhance the performance of revenue.

Power supply to the various Discos, it was learnt, has been on the decline because the generation plants are not supplying them enough power due to gas supply problem. Aside from the issue of generation, there are also the problems associated with transmission lines. Most of the transmission lines are weak and as such a large volume of power transmitted is often lost before it gets to its destination. At the distribution level, equipment such as transformers, cables and distribution networks are weak.

Heavy investment is required in the areas of infrastructure that would enable both the distribution and generation companies to reduce revenue loss in all the value chains of the power industry, the analysts say.

Massive investments required

Industry watchers have hinted that the challenge for the new owners of the power assets would stem from the fact that a low-margin electricity sector would be bumping against high needs for capital expenditure. It was gathered that some of the power networks have equipment that have been in use for over 40 years without major overhaul done on them. Both the Gencos and the Discos have dilapidated equipment that need to be completely overhauled. Therefore, massive investment would be needed to undo the rot in the system.

According to Kayode Akindele, partner at 46 Parallel, a Lagos-based investment firm, many of the successful consortia that acquired the Discos and Gencos have contractual undertakings with the BPE for aggressive capital development plans that would “require significant fundraising in 2014 and beyond”.

In Port Harcourt, Rivers State, for instance, the new Disco investors are targeting 14 million consumers from the current 530,000. According to Augustine Wokocha, chairman of 4Power, buyer of the Port Harcourt Disco, “PHED covers four states with a population of 14 million. As at now, only 530,000 consumers are connected to the national grid.” This would require huge investment.

According to analysts, capex (capital expenditure) estimates for the 11 Discos post privatisation is N60 billion per annum for each in the next five years, while Gencos will require $4.28 billion just to achieve full-installed capacity of 6,976.4MW.

At the handover of Eko Electricity Distribution Company (Eko Disco) on November 1, Olusegun Aganga, Minister of Industry, Trade and Investment, had said that an inflow of investments worth about $40 billion was being expected in the sector in the next 10 years. According to him, the power sector reform would attract immense foreign investment into the country, increase access to electricity, improve infrastructure and create employment for the country’s growing population.

However, getting to a successful private electricity sector goes beyond just the Discos and Gencos to include other players that will influence the viability of the industry. The analysts say the Discos are at the end of a complex chain of players in the power sector which include the gas suppliers, IPPs/Gencos, the bulk trader, and the Transmission Company of Nigeria (TCN).

“You want to make the whole chain, all the way from Discos up to gas exploration, commercially viable,” said Citibank’s managing director and chief executive officer for Nigeria, Omar Hafeez.

Making gas exploration commercially viable would entail having an adjustment to current fixed gas prices which, industry stakeholders say, is hurting gas exploration and production in Nigeria. The fiscal terms, low prices and lack of infrastructure are the major impediments to new investments, with gas production projected to fall by 56 percent from current levels to 0.7 million barrels of oil equivalent per day by 2020, while 73 percent of new gas production would be uneconomic and up to $23 billion in new investments would be at risk.

Nigeria’s aspiration to produce 3-4 billion cubic feet (BCF) a day of gas by 2015 (from under 1 BCF today) will require a significant infrastructure spend of $30 billion, according to stakeholders, an amount the government or NNPC is unlikely to raise by themselves. This would make it impossible to power existing plants which run mostly on gas as well as the 4,774MW from new NIPP plants coming on stream soon.

Last December, there were reports that independent Nigerian oil and gas companies were positioning to play a major role in the emerging power sector, with Atedo Peterside quoted as saying, in September, that the [current] stranded generation capacity due to a lack of gas supply and transportation constraints was in the order of 1,500 mega watts (MW), while a further 4,774MW is expected to come on stream from the 10 NIPPs in 2014.

Nigeria has the world’s ninth-largest proven gas reserves at 188 trillion cubic feet and potential gas reserves of 600 trillion cubic feet (TCF). A misguided policy of fixing domestic gas prices at low and often unprofitable levels has, however, led to a dearth of investments into the sector. The prospect of attracting large investments under the proposed PIB terms is also seriously at risk as most gas projects are no longer economic.

“You cannot have low pricing and a high fiscal regime and expect to have gas,” Austin Avuru, MD, Seplat Petroleum Development Ltd, said in a presentation in Lagos last November.

Nigeria, Africa’s most populous nation, is targeting 40,000MW generating capacity of electricity by 2020 and will need to spend about $10 billion annually for the next 10 years to achieve this.

TCN seen as a weak link

Meanwhile, the Transmission Company of Nigeria (TCN) continues to be seen as a potentially weak link in the system due to huge financing needs and quasi-government control.

With the takeover of the Gencos and Discos by private investors, all eyes shifted on the TCN, which is saddled with the responsibility of wheeling generated electricity to distributors for onward sale to consumers. There have been doubts over the ability of the TCN to live up to expectations in certain areas of its envisaged functions as Market Operator (MO) and System Operator (SO), among others.

TCN’s challenges border on issues of grid reliability and stability, vegetation management, human capacity deficiencies, and finance, according to Engr. A. S. A. Bada, senior special assistant on transmission to the president, in a presentation, “The Future of TCN: Ensuring Professional Management of and Investment in the Transmission Network”. Other analysts add that the stability of the national grid needs to be enhanced to ensure effective transmission of any quantity of power being generated in the new dispensation.

On November 2, a day after the handover, Don Priestman, the then chief executive officer of Manitoba Hydro International, the Canadian firm that manages the TCN for Nigerians, gave the assurance that things were changing for the good of the electricity sector, observing, however, that it would take time and funding to attain the desired evacuation capacity — especially as the transmission outfit had for long been starved of funds for maintenance. 

“For a long time, the TCN was underfunded and did not have enough fund for maintenance… but that is now changing; we are seeking funds; money is coming and I’m hopeful that that the necessary steps will be taken,” he said, adding: “We are working with government and the regulator to determine the amount of money that is needed.”

Manitoba was offered a three-year management contract for TCN in September 2012 to work with an in-house team and take control of the daily operations of the company. The Canadian firm is expected to revamp TCN to achieve technical and financial adequacy in addition to providing stable transmission of power without system failure. It is also expected that TCN would become a commercially viable and market-driven company capable of evacuating the maximum capacity of energy generated for distribution.

However, crisis seems to be rocking the transmission company recently. On December 20, 2013, reports emerged that the board of TCN had fired its CEO, Don Priestman, appointing Mack Kast in his stead. Although no official reason was given, sources at TCN said that “internal wrangling, lack of cooperation and many other issues” warranted the abrupt sacking.

In a similar development, Hamman Tukur, chairman of the supervisory board of TCN, sometime in December wrote to President Goodluck Jonathan informing him that he would resign from January 1, 2014. A replacement, Ibrahim Dahiru Waziri, has since been appointed, with effect from December 24.

Against the backdrop of the doubts over TCN’s capacity to the deliver the goods, the Minister of Power used the opportunity of Waziri’s inauguration to charge the principal players in the nation’s electricity sector to sit up and be committed to ensuring that power supply was significantly and visibly improved by June.

“While we celebrate the unprecedented success so far recorded in the reform of the power sector, the yardstick, which consumers measure us, is the availability of electricity at the last mile to our homes and businesses. I wish, therefore, to charge all the principal sector players here today to commit to ensuring that power supply to our customers is significantly and visibly improved by June this year as already directed by Mr. President. Much is expected of us all and the entire nation is waiting for us. The significant investment of the Federal Government in both material and human resources must translate into improved service delivery during the year. Government will no longer tolerate any excuse of non-performance from any of the sector players from both the ministry particularly and our new private sector partners,” Nebo said.

Reiterating the critical role of national grid in a deregulated electricity industry, he charged the new chairman of the TCN supervisory board to drive the management of TCN towards creating a national grid that would be capable of reliably and efficiently evacuating all generated power nationwide.

“The risk of non-performance by TCN affects not only existing IPPs and Discos but also nullifies all our effort towards creating a conducive investment climate for the sector. You must, therefore, drive the management towards creating a national grid capable of reliably and efficiently evacuating all generated power nationwide. The board is also expected to ensure that only prudent investments in transmission lines and substations are approved for implementation. This is no time for projects with only fringe benefits to the national economy. I also implore the board to take advantage of the numerous PPP proposals on the table and provide the required leadership in seeking funding for capital projects beyond annual appropriation,” the minister added.

Waziri, in his acceptance speech, observed that the power sector transformation initiative was the fulcrum on which the much expected and deserved take-off of the Nigerian economy hinged.

“I fully understand this. It is no exaggeration to say ‘as goes the power sector, so goes the Nigerian economy’. This, therefore, places great responsibility on all of us privileged to be serving in the sector to strive hard and harder still in order to meet the legitimate expectations of our fellow citizens and other stakeholders. To this proposition, I am fully committed,” he added.

To tackle the challenges in TCN, Bada recommends transmission network expansion, dualisation of critical lines to create relief, relief for congested segments of the grid, implementation of the Super Grid concept which is estimated to cost $5bn, vegetation management, human capacity development, and local manufacture of components. However, it remains to be seen how well TCN will play its assigned crucial role in the emerging power sector.

The NIPPs

In 2005, the Federal Government set up the Niger Delta Power Holdings Company (NDPHC), a special purpose company, to implement the National Integrated Power Project (NIPP), the government’s flagship project that is mandated to add new generation, transmission and distribution capacity to Nigeria’s electricity supply industry and resolve its chronic supply shortfall.

The NIPP generation portfolio comprises 10 gas-fired power plants with a combined design capacity in excess of 5,453MW at ISO conditions and 4,774MW (net) with each of the power plants incorporated as a subsidiary company of NDPHC.

The 10 generation plants include Gbarain (225MW), Ihovbor (451MW), Omotosho (500MW), Egbema (338MW), Omoku (250MW), Geregu (434MW), Calabar (561MW), Ogorode (Sapele 451MW), Alaoji (961MW), and Olorunsogo (676MW).

Last year, the NDPHC announced the decision to sell 80 percent of the 10 power plants, which was informed by government’s intention to involve private sector operators who have the technical know-how to run the plants in an efficient manner. In June, it also ran a series of road shows in Lagos, London, New York and Hong Kong to generate interest in the sale of the power plants, and by the July 19 cut-off date, 110 bids were reported to have been received.

Meanwhile, it was learnt that development finance institutions (DFIs) and Nigerian banks are showing interest in mobilising funding for prospective buyers of the NIPP assets. At an estimate of $1.2 million per megawatt, the sale of an 80 percent equity stake by the Federal Government to core investors will amount to about $4.5 billion.

The recent privatisation exercise which has been described as “a big bang” seems to have whetted the appetite of DFIs such as International Finance Corporation (IFC), Africa Finance Corporation (AFC), African Development Bank, Proparco, Deutsche Investitions und Entwicklungsgesellschaft and Dutch development bank, FMO.

“There is keen interest from DFIs to invest in power projects in Nigeria. The expectation is that the local commercial banks will continue to play their part and I think what we need to look for is a situation where the appropriate party is taking the appropriate risk,” said Femi Akinrebiyo, senior investment officer and power sector country coordinator for Nigeria and Ghana, IFC.

Recall that Nigerian commercial banks provided the lion share of the financing required by buyers of the PHCN successor companies. The acquisition of the companies, which was concluded with the payment of the 75 percent balance of the bid prices on August 21, generated over $2.7 billion for the government.

For Ayodele Oni of Banwo & Ighodalo, the reasons DFIs and local banks are interested in the 10 power plants would include the success recorded in the privatisation of the PHCN power companies, despite the attendant challenges, especially since those challenges were unlikely to be encountered in relation to the NIPP plants. All of the NIPP plants, he said, are new plants without any liabilities or labour issues as were encountered with the PHCN power companies, adding that the prospective financiers would have done due diligence and were convinced about the state of the plants.

If the NIPP plants are eventually transferred to private investors, analysts believe it would go a long to improve the present state of power generation in the country.

Going forward

While Nigerians grope in the dark, almost losing hope of improved power supply in the nearest possible future, analysts have expressed belief that the situation would improve as soon as issues ranging from dilapidated equipment, inadequate generation capacity, gas supply and weak transmission are effectively addressed.

They say the most complex challenge for now remains the upgrade of the current grid levels. “Knowing the grid requirement would enable them [the core investors] reduce technical losses as it would aid them to determine areas that would require transformers, those places that have weak distribution lines, and consumers that need to be metered as well as other activities that will reduce technical losses,” one analyst, who pleaded anonymity, said.

For Ayo Obilomo, former managing director/chief executive officer, Eko Electricity Distribution Zone, there would be need to embark on a campaign to educate consumers on how not to waste energy by turning off their bulbs when not needed, which would bring about a measure of improvement in power supply. “If, for example, 10 megawatts serve 1,000 people, by the time the campaign on the need to conserve energy is rolled out, the 10 megawatts could serve a few hundreds more.”

As it is, many Nigerians say they have adopted a wait-and-see attitude, but deep in their hearts, they cannot wait for the power situation to improve, and they are willing to pay for every power supplied. This, they say, is much better than the high premium they have to pay and the environmental hazards they expose themselves to whenever they have to resort to their individual generators for power supply.