The Director, Centre for Petroleum,
Energy Economics and Law, University of Ibadan, and President, Nigerian
Association for Energy Economics, Prof. Adeola Adenikinju, in this
interview with DAYO OKETOLA, laments the country’s low transmission capacity and advises the government on what to do
What impact do you think the proposed $3.07bn expenditure will have on power transmission in the country?
The decision to spend part of the
proceeds from the sale of PHCN assets on transmission infrastructure is a
very good one. This will facilitate the evacuation of electricity
produced by the existing and future power plants, help to modernise the
existing infrastructure that is considered weak and old and that
contributes to the relatively high transmission losses and system
failures in the country. Low investment in transmission infrastructure
is one of the weak links in the electricity development programmes in
the past. This, hopefully, will correct that problem.
Moreover, the government is in the best
position to carry out this type of investment. However, it is important
that the money is well spent to ensure that Nigerians get value for
their money. It is important that the process is credible, transparent
and open to give the right contractors the opportunity to handle the
projects.
It is important to also mention that
other aspects of the electricity supply process need attention. Both the
generation and distribution segments still need considerable attention.
The distribution segment is particularly important given the current
huge technical and economic losses in that segment. Moreover, quite a
large proportion of the population are yet to get the prepaid meters and
still get what they refer to as ‘crazy bills.’ This too must be
addressed.
The government’s programme must also
give consideration to the rural areas. What is the plan to extend
electricity to a large segment of the population where electricity
access is currently less than 20 per cent?
Do you think the government will not play politics with the whole process?
The only way to ensure that the
government does not play politics with this project is for it to
preannounce a timeline for the implementation and give timely reports on
progresses made and challenges faced to Nigerians.
Independent stakeholders should also be
allowed to monitor the project. In fact, the government must put in
place a post-privatisation plan to ensure that companies that acquired
the privatised assets keep to the performance agreements and Nigerians
get value for their money. The current trajectory of electricity prices
as shown in the MYTO is on the high side due to the current huge
economic and non-economic losses in the system. By cutting these losses,
Nigerians should expect a steady decline in electricity prices in the
medium term.
What advice do you have for the government to ensure that this does not become a failed project like many others before it?
The money must be kept in an escrow
account that is wholly dedicated to the project. In addition, the
contract process must be credible and transparent. Only contractors that
have pedigree must be selected. Once the right contractors are chosen
and they have the assurance that they will be paid, it becomes a lot
easier to ensure that they deliver. However, when lackeys of government
are chosen based on their political connections, then it will be
difficult to give an assurance on performance.
Are you satisfied that the nation
still generates less than 4,000 megawatts of power despite the
government’s huge investments in the sector?
I have said it before that it is rather a
show of mediocrity for Nigeria to be generating less than 4,000MW of
electricity for a population of more than 150 million people. When I was
a Special Assistant to the Special Adviser to the President on Energy
during former President Olusegun Obasanjo’s regime, I was a member of a
group mandated to come up with the power requirement for Nigeria in
order to be an industrialised country by 2030.
And when we did the
analysis, we found that for Nigeria to be an industrialised country by
2030, at least the country would need to generate 120,000MW of
electricity. The vision was that by 2007, we would have had 10,000MW;
now, we are still around 4,000. This will even not be enough to power a
state in the United States.
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