Power, in this New Year, remains a critical sector of the nation’s economy. Several billions have been put into the 2014 budget proposal to ensure a stable electricity supply in the country. It is expected that this year will witness a turnaround in the sector with the privatisation of power utilities late last year.

This year, the privatization of the Niger Delta Power Holding Company (NDPHC), which is handling the National Integrated Power Projects (NIPP) will be the focal point.
The NDPHC was incorporated in 2005 as a private limited liability company jointly by the federal, state and local governments with a mandate to manage the power projects (NIPP), as an interventionist measure to tackle the power problem in the country. NIPP was conceived in 2004 to fast-track the initiative of adding significant new generation capacity, transmission, distribution and gas transport infrastructure projects.

Generation

The NIPP generation projects includes ten medium-sized gas-fired power plants, eight of which were initially designed as open-cycle gas turbine (OCGT) power plants with the remaining two designed as combined-cycle gas turbine (CCGT) power plants. Seven of the OCGT plants have the capacity to be expanded to CCGT configuration. The project has a combined design capacity of over 5,453Mega Watts (MW) at (ISO) conditions and 4,774MW (installed capacity).
It is currently working on finishing eight more plants under the NIPP after two of such, 434mw Geregu plant in Kogi State and 500MW Omotosho in Ondo State were commissioned in October 2013.

The Managing Director of the NDPHC, Mr James Olotu, during the commissioning of an injection substation in Abuja in December 2013, said that "four of the NIPPs are ready for commissioning, we are just doing housekeeping work in order to make sure that everything is according to contract and they are able to produce the kind of power that Nigerians want."

He noted that in the early period of 2014, the already completed projects would undergo a coordinated commissioning just as the company will open the bids submitted by prospective bidders for the acquisition of the 10 NIPPs.

According to the NIPP Scope released in December, the projects slated for completion between the first and second quarters of 2014 are the Calabar station, Egbema in Imo State, Ihovbor power in Edo State, Gbarain power in Bayesla State and Sapele power station in Delta State. The others include the Omoku power station in Rivers State, Alaoji combined cycle power station in Abia State, Olorunsogo combined cycle power plant in Ogun State.

On the gas infrastructure, Mr Olotu said: "The entire NIPP project includes four lots of gas pipeline infrastructure that connects the power plants, we are building to existing grids or directly from the gas wells to ensure that when the gas is available, it can be wheeled to the power plants and when the power is available, it can be wheeled to Nigerians."

He explained that an installation work is going on in five metering stations of 135-kilometre of gas pipelines to cover Ihovbor, Egbema, Gbarain, Calabar, Sapele, Omoku, and Geregu plants. In essence, work is ongoing to construct gas infrastructure for 3, out of the 10, power stations, he added.

Transmission

The NDPHC plans to construct a total of 104 transmission lines and substation projects including projects for back-feeding/evacuating specific power station and reinforce the National Grid Network across major states in Nigeria.
Olotu had earlier noted that ''16 of the transmission projects in Ogun, Ondo, Delta, Abia, Kwara, Oyo states and Abuja, in the Federal Capital Territory (FCT), have been completed."

The score card for the NIPPs stated that 2,194-kilometre  and another 809km of 330KV and 132KV lines are under construction with transmission sub-stations to provide additional capacity of 5,582MVA and 3,313MVA at 330KV and 132KV levels respectively which culminates in over 5,000-kilometre transmission lines.
However, 16 of the plants have been completed in Kwara State, Ibadan and Abuja. Projects required for power evacuation from Olorunsogo, Omotosho, Sapele and Alaoji power plants have also been partially completed, the report stated.

Distribution

In the distribution section, the NIPP Year Report stated that 291 distribution projects in 43 Engineering, Procurement and Construction (EPC), and 15 OEM (OEM) lots using Low Loss High Voltage distribution system contracts are being constructed to ensure expanded access to power. This, if fully accomplished, will bring the total sub-station capacity added to the existing ones to 3,540MVA, and 2,600km with 1,700-kilometre of 11KV and 33KV lines respectively.

The projects are embedded within the existing networks of the 11 Distribution companies (Discos), out of which the Kaduna Disco is yet to be fully privatised.  The NIPP project statistics obtained in December, however, stated that 35 of the projects have been completed in Abuja, Delta, Edo, Ondo, Lagos, Oyo, Kaduna and Plateau states.
Basically, 38 power injector sub-stations have been built and commissioned in four states, namely, Edo, Delta, Ondo and Ekiti states between 2012 and last year. It also commissioned 11 substations in Lagos State, NDPHC recently handed over seven of such substations to Kano Disco which is now owned by Sahelian Power SPV Limited. It also commissioned two additional substations in Ibadan, Oyo State, to salvage the power situation.

The Challenges

Highlighting the challenges confronting the success of NIPP, Mr Olotu, during the handover of the Ibadan substations said, "we should have completed all this power projects, but we were confronted with technical and human problems."

One of such is inadequate human capacity. Olotu noted that no matter the investment in infrastructure, the human capacity must be developed to run or manage the machines. He assured that NDPHC will continuously partner with power sector stakeholders in manpower training.

In the 2013 project report, another major constraint observed is the protracted process of acquiring the necessary Right of Way for approximately 3,000-kilometre routes of the new 330KV and 132KV transmission lines. It stated that the problem is especially acute in densely populated areas of Lagos, Anambra, Imo, Abia, Enugu and Akwa Ibom states.

Another challenge Mr Olotu noted was the delay in projects completion. He said: "Some contractors are slow. For those who were extremely slow, we took part of the projects from them and gave other contractors. During the next contract award, we know where to look at."

To tackle the slow process applied by some contractors, Vice President Namadi Sambo, who is the Chairman of the NDPHC Board, met with the contractors handling various power projects last year, urging them to hasten their projects or be penalised.

As NIPP privatisation begins...

President Goodluck Jonathan while commissioning the 500mw Omotosho plant in Ondo State noted that privatization of the NIPPs will commence in June 2014 to further strengthen the now private-styled power sector.

Confirming this, Olotu said the bids process for the 10 power plants closed in November. The bids received have since been opened and passed to the Evaluation Committee of NDPHC for evaluation within an initial time frame of two weeks.

"After the evaluation, we will come up with evaluation report which the Board will approve and then we will announce the results. We will carry out technical and financial evaluations to determine the technical capabilities and financial capabilities of the bidders," Olotu explained.

 It is expected that the entire process would terminate by the end of January 2014 when the preferred bidders would have emerged. He added that the preferred bidders will then get six months to raise the money for the 80 percent stakes they are acquiring and, by June, all the proceeds would have been realised.

Plans for reinvestment

The NDPHC has also disclosed that the proceeds from the privatised NIPPs would be reinvested into the power sector. The NDPHC is targeting about $1.8billion as proceeds from the divestment of the 10 power plants which would be reinvested into hydropower projects.

The Managing Director, Mr James Olotu in October said: "We are going to be doing about 10 power plants in hydro, we are collaborating with the Ministry of Power, the Ministry of Water Resources and other agencies that are relevant to ensure that we put in a power of 6000mw or more."