Friday, February 16, 2018 /09:30 AM / FBNQuest
we turn our attention to Nigeria’s energy sector. Power shortages continue to
stifle economic growth. Although power generation capacity from the grid has
peaked at 7,000 megawatts (MW), distribution capacity is still c.5000MW. The
FGN currently estimates national energy demand at 22,230 megawatts (MW). Based
on industry sources, the FGN has secured US$486m from the World Bank as funding
for the expansion of the Transmission Company of Nigeria (TCN).
Initially, the TCN had secured US$1.55bn in
funding from multilateral donor agencies for the same purpose. It is still
unclear if the recently secured US$486m is part of the previous funding
received from donor agencies or an additional credit line. If the latter is the
case, we see it as a positive, given that the FGN targets a wheeling capacity
of 20,000MW from the transmission grid over the next four years.
According to the most recent data from the
federal ministry of power, works and housing, peak generation was 4,780MW on
Monday (this week). Its lowest generation on the same day was 3,945MW.
We understand that at least 40% of most
business operating costs is allocated to self-generation of energy. A survey
carried out by the Manufacturers Association of Nigeria revealed that N130bn
was spent on self-generated energy in 2016.
There is growing interest around off-grid
solutions. Official thinking on power now includes developing alternative
energy sources. The 700MW Zungeru hydro power plant project in Niger state is
now 45% complete. Besides increased energy generation, the completion of this
project will boost economic activity via job creation for the host communities.
Based on our estimates, if “full power” is
attained and made routinely available to businesses and households, it could
add at least two percentage points to annual GDP growth.
Energy Generation Attained a Peak of 94,627MWh in Q4 2017 - NBS
Energy on the FGN’s Agenda
- Meter Asset
Providers Regulation: NERC leads final consultations in Lagos
Owed FGN Over Fibre Optic Agreement Refuted by Phase 3 and Alheri
- 2018: A
Breakout Year For Clean Energy
Writes President Buhari, On TCN’s Recovery Of Government Assets
- Germany Set
to Pay Customers for Electricity Usage as Renewable Energy Generation
Creates Huge Power
- Sudden Loss
of Generation Due to Interruption in Gas Supply - FMPWH
- USADF And
ALL ON Announce Partnership For Off-Grid Energy Investments in Nigeria
agree on Cost Reflective Tariff at 2017 PwC Power Roundtable
- All On
Makes First Investments in Nigerian Off-Grid Energy Businesses