Nigeria: Power companies complain of bottlenecks

Ayorinde Oluokun/abuja

Representatives and chief executive officers of independent power producers (IPPs) on Tuesday March 13, 2012 met with the Nigerian Electricity Regulatory Commission (NERC) as they complained of delay in securing risk guarantee and gas supply agreements among other challenges delaying execution of their projects.

Declaring open the meeting with representatives of over 60 licensed IPPs, the Chairman, Dr. Sam Amadi said that the licencees should open up on their challenges because they share a common fate with the Commission regarding the much needed increase in power generation.

He said that potential 13,000 megawatts is locked up for as long as the IPPs delay in realising the economic values of their licensees and that the Commission cannot lay claims to having absolute knowledge of the solutions to the power sector problems.

“If you have problems you should say so. If you think any part of this model is not working, you should let us know. You can be free with the regulator. You can be sure of our credibility. You can trust us that we have good faith in resolving the challenges facing us.”

“This is the time for us to have feedback. The quality of our decisions is determined by the quality of inputs. If you fail, the Commission will be the primary loser, this is besides the fact that we are all Nigerians and we need electricity.”

In separate presentations by Executive Director of Supertek Nigeria, Mr. Ray Oguego and Chief Technical Adviser of Geometric Power, Engineer Ben Caven, the IPPs complained of gas supply problems and bureaucratic bottlenecks in securing a partial risk guarantee (PRG) from the World Bank.

Oguego said that the process of getting the PRG, assurance secured by the Federal Government to encourage investments in the power sector, will take an average of two years and will in effect delay the signing of the power purchase agreement and ultimately the project execution.

Oguego therefore urged the Federal Government to find a creative alternative to the PRG.

Caven, who enthused that Geometric might fire its first turbine of about 45 megawatts by the first week of August; said that work had stopped on the project since 2009 as a result of financial challenges but that work has since resumed.

He complained that the rights of ways for the transmission and distribution lines have been encroached by buildings on account of over a year delay in the construction.

Some of the IPPs also urged the Commission to impress it on the Federal Government, the need for a creative alternative to removing bottlenecks to projects execution in the power sector.