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 Business News:
China Firm Offers $12bn Financing for Key Power Projects
Jul 19, 2015
By: Bunmi Ajayi








Nigeria: OSOGBO -

State Grid Corporation of China (SGCC), the largest state-owned electricity utilities company in the world, which transmits and distributes power in China, has offered to fund up to $12 billion, key electricity transmission projects in the second phase of the National Integrated Power Projects (NIPP).

SGCC, CEOAFRICA learnt, had offered to invest first $8 billion and then $4 billion later as equity and loan participation in electricity transmission projects that will be built for the Transmission Company of Nigeria (TCN) through the Niger Delta Power Holding Company (NDPHC) Limited in the phase two of the NIPP.

CEOAFRICA source gathered at the weekend in Abuja gleaned from a status report on Nigeria’s power sector, which was presented by the NDPHC to the government of President Muhammadu Buhari that SGCC had made the offer in consortium with its other partners, CET Power and Westron.

The offer, our source also learnt, would see the NDPHC committing about $600 million to the transmission project.

These projects may include Lot 5A Ikot Abasi 330kV transmission substation, Lot 6F, G and H Owerri-Nnewi-Onitsha 330kV line, Lot 7A and B evacuation from Oke Aro, and Lot 18A and B Ikot Abasi-Ikot Ekpene 330kV line.

Others include Lot 19-3C-Turn-in of Benin-Onitsha 330kV line in Ihovbor, Lot 20-1A Ikom 132/33kV substation, Lot 20-2 Obudu 132/33kV substation, Lot 20-3A and B Abakaliki-Ikom-Obudu 132kV line, Lot 25-3C Calabar EPZ 132/33kV substation as well as Lot 25-4C Adiabo-Calabar EPZ 132kV line.

According to the status report, which was reportedly presented to the government by the Managing Director of NDPHC, Mr. James Olotu, and obtained by THISDAY from the Presidency, these transmission projects are 15 of the 114 transmission projects that would not be completed in the first phase of the NIPP due to intractable wayleave issues and high cost escalations.

They have however been transferred to the phase two of the NIPP for consideration and approval by the board. It is these projects and a couple of others that SGCC and its other partners have indicated interest to fund.

The status report equally disclosed that within the prevailing transmission challenges of the power sector, SGCC’s funding portfolio in the sector could rise to $18 billion if the government would smartly resolve inherent challenges in projects’ financing in the transmission network, vis-à-vis the country’s power sector.

As part of the policy thrust of the NIPP phase two, NDPHC is expected to deploy parts of the funds earned from the sale of its 10 thermal power plants in an ongoing shares divestment programme, to help improve the capacity and reliability of the national grid to meet up with expected increase in the sector’s generation capacity.

SGCC reportedly manages electricity transmission and distribution from subsidiaries in Northern China, North-eastern China, Eastern China, Middle China and North-western China.

Also, a number of gas supplies and electricity distribution assets worth about $2 billion will likely be transferred to the Nigerian Gas Company (NGC) and electricity distribution companies (Discos) in the country by the NDPHC.

The assets according to the status report, are slated to be disposed to the NGC and the 11 Discos in the country for use to improve on their operations in the power sector. Their value, the report added will be recovered within a 10-year period from the time the transfer is consummated.

There are about 296 distribution network assets as well as gas pipelines and metering stations in four lots that cover gas supplies to NIPP plants at Ihovbor, Egbema, Gbarain and Calabar. A new metering station in Sapele is equally part of the gas supplies and electricity distribution assets that will be transferred by NDPHC.

 


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