Assessing FG’s 35,000mw power transmission target

The Federal Government recently launched a 20-year master plan of the Transmission Company of Nigeria (TCN), outlining steps to reaching a 35,000 megawatt (MW) electricity wheeling capacity in 20 years. This piece looks at the plan to see if it could be the magic wand to satisfy the yearning of Nigerians for stable electricity in their homes and industries.

The plan targets hitting 15,000MW transmission capacity by 2025 and envisages an N805.7 billion ($2.238bn) funding from eight foreign banks. The direct offshoot of the master plan is the Transmission Rehabilitation and Expansion Plan (TREP) being implemented through the Nigeria Electricity and Gas Improvement Project (NEGIP), a facility from the World Bank.

Presented by Fichtner, a German consultancy firm, the plan outlined the targets of wheeling capacity envisaged in the 20-year period – from 2017 to 2037. It also stated the steps TCN and other key players in the power sector value chain must take up to attain the targets.

According to its timeline, the plan focuses on the establishment of generation and transmission plan that meets national electricity demand. By year 2020, the transmission system is expected to be robust enough to wheel 10,000MW.

The Minister of Power, Works and Housing, Mr Babatunde Fashola, during the presentation of the master plan, said before 2015 when President Muhammadu Buhari took over, transmission capacity was about 5,000MW but has improved to 7,125MW as at December 2017. This means that the plan targets additional 3,000MW capacity as its benchmark by 2020.

Part of what TCN would do to attain this target is the development of a network model to rehabilitate the existing system through reconducting weak transmission lines, and expanding the network with over 1,200MW capacity projects that are ongoing alongside some transmission projects under the National Integrated Power Projects (NIPP).

For the 15,000MW transmission capacity target by 2025, TCN said it will strive to complete ongoing projects, introduce and complete new ones between 2020 and 2025.

The public firm will initiate fresh projects that would be completed by 2030 and 2035 when it expects to have a capacity of 23,000MW and 28,000MW respectively.

Projects to gulp N805.7bn loans from 8 foreign banks

The plan spells out the means of funding for the various projects and their timelines. It shows that eight foreign loans totaling N805.7 billion ($2.238bn) will finance the plan that will last till 2037.

The financial breakdown shows $370 million (about N133.2bn) ongoing funding from two international financiers for the first stage ending by 2020 with a 10,000MW target. It comprises $170m for all projects financed by Agence Française de Développement  (AFD) of France in Abuja, and $200m fund for rehabilitation projects from the World Bank.

For the other stages, from year 2020 to 2037, the TCN plans show that the Federal Government is securing $1.868bn (about N672.5bn) foreign loans from six banks to finance various transmission projects that will ultimately raise the wheeling capacity to 28,000MW.

Sources of the funding consist of $200m from the Japan International Cooperation Agency (JICA), proposed $272m from AFD, and a proposed $200m for projects financed by Africa Development Bank (AfDB).

The others are projects to be financed with $500m loan from the Export-Import Bank, $486m World Bank loan for the Nigeria – Electricity Transmission Project (NETAP), and another $210m expected from the Islamic Development Bank (IDB) to fund some projects.

The plan itemises 36 intermediate transmission projects that are expected to come on stream by 2020. By 2020, four projects will be completed in Abuja under the North Central region. They consist of 243 kilometres of one 330 kilovolt (KV) and three 132KV transmission lines across New Apo, Old Apo, Old Kuje and Lugbe near the city centre.

It targets three line reconductoring projects of 132KV lines with 243km distance in the South-west. Four similar projects of 173km will be executed in the South-east; two projects spanning 265km will be done in Kaduna. Four of such projects spanning 248km will be executed in the South-south and one with a distance of 356km in the North-east.

Ten projects are targeted for completion in the Lagos axis by year 2022. They cover a distance of 202.7km lines and would comprise five 330KV and five 132KV lines. TCN targets eight 132KV projects spanning 1,170km for the North-east around the Bauchi region slated for completion after 2020.

By 2020, an analysis of the plan shows Nigeria is supposed to have excess transmission capacity of 479MW. This is because the document projects a 10,761MW generation capacity, a 10,282MW load capacity including 387MW for export to Niger and Benin republics.

It also expects a 38.6 per cent increase in wheeling capacity from 9,895MW in 2020 to 13,715MW in 2025; a 51.3 per cent rise to 20,746MW in 2030, and another 22.4 per cent increase that takes the capacity to 25,397MW by 2035.

This projection excludes the export target of 387MW by 2020, 1,540MW by 2025, 1,831MW by 2030 and 2,000MW electricity by 2035.

To ensure the convenient distribution of the projected electricity to Nigerians, the master plan tasked the current 11 Distribution Companies (DisCos) to ensure they undertake a programme of having capacitors installed at distribution level.

“It is to ensure the power factor at all 33KV is not less than 0.9 by 2020 and 0.95 by 2025, in line with the Grid Code requirements,” the plan stated.