Mr Chiedu Ugbo is the Managing Director and Chief Executive Officer of the Niger Delta Power Holding Company (NDPHC); he had his tenure renewed for four years recently by President Muhammadu Buhari. In this interview to mark the 60th Independence Day for Nigeria and 15 years after the NDPHC began, Mr Ugbo, said while 80 per cent of the 10 National Integrated Power project (NIPP) plants have been delivered with 4,000 megawatts (MW), his administration is working to deliver the full 100 per cent by of 5,000MW by 2021.
What has been the journey in the power sector so far?
From the democratic era in 1999 to now, we have had a level of growth as we have about 12,000 megawatts (MW) to 13,000MW growth in power generation. It grew more than the less 6,00MW in 1999, to 13,000MW now. The growth we may say was in 20 years.
From this figure, the NIPP has huge contributions. The NIPP had a lot of investment as the three tiers of government of the federation came together and put in a lot of money. So today, we have 4,000MW. If you are talking about the 13,000MW capability, 4,000MW are held by NDPHC through the NIPP, and that makes NDPHC the greatest power generator in Nigeria if not West Africa.
What about the NIPP intervention in other value chains?
We have also done significant investment in transmission lines and substations, several capacities of transmission transformers, several kilometres of transmission lines at 330 kilovolts of high voltage and at 132kV lines. Then we have a lot of interventions in Distribution Companies (DisCos) all over the country. Under this present administration of President Muhammad Buhari, we have done well over 80 projects in distribution and transmission.
In the next two months, we are bringing another 126MW from our Gbarain NIPP station in Bayelsa state, so the generation capacity is increasing.
Your tenure was just renewed, what is your rating of NDPHC?
As the Chief Executive Officer, I feel happy and still I’m not too happy. Our mandate is to develop a design capacity of 5,000MW power plants. I’m happy that we are over 4,000MW at least on the ground and the remaining ones are at the stage of conclusion. I’m not also happy that 12 years or 14 years after, we have not achieved the entire 5,000MW. But I am happy that we have achieved 4,000MW which is equivalent to 80 per cent and that is an excellent mark; that is not too good because we are to make 100 per cent. The problem we had was not from NDPHC but from the contractors. Under the current management, we have recovered the uncompleted projects from that contractor, terminated the contract under the direction of the Board. We are engaging a new contractor to complete these projects and we hope to finish these projects next year.
But aside from that, we have invested a lot in evacuation of power through transmission facilities from the power plants, so none of the power plants lack transmission infrastructure but unfortunately the electricity we generate is not fully evacuated from the Generation Companies (GenCos). The Transmission Company of Nigeria (TCN) cannot evacuate because there are some issues at the transmission interface with the Distribution Companies (DisCos). The DisCos claim that the transmission company takes electricity to where they don’t need them. It means I have 4,000MW sitting but if you check my dashboard now, I have maybe 400MW or 500MW and the constraint is transmission and gas. Nigeria is described in the oil and gas industry as a gas territory so it all goes back to the issues of settlement to pay for the gas.
Also, people consume electricity but they don’t pay and when they pay we get about 30 per cent of our invoice from DisCos, and that forced the Federal Government to intervene to keep paying us at least through the famous Payment Assurance Facility. So even at the level of that 30 per cent, we had to rely on the intervention if not there would have been no generation plant in the country today. So that is the challenge that made me not happy.
Government is optimistic about the Siemens deal to clean the power network. What is your view on this?
The government’s thinking through this issue, President Muhammadu Buhari was able to secure the Siemens Presidential Power Initiative. Out of the 12,000MW or 13,000MW installed capacity in Nigeria, 80 per cent are available, ready to run, so 8,000MW is ready to run but we are doing less than 5,000MW today. So the Siemens project will clean up the network so the arguments between distribution and transmission power would be eradicated.
So in the next one year, we would be able to get at least 7,000MW and Nigerians will be served better. I wasn’t happy that the government has made these investments (NIPP) but Nigerians are yet to enjoy it because of the constraints. Now with the government coming in, I am happy with the Siemens project, which means I would be able to generate more from these generation stations that I have and give the energy to serve Nigerians.
How do you plan to reach more unserved rural areas?
We are funded by investment by the Federal, State and Local governments, so we are funded by Nigerians as a whole. We acknowledge very well there are those who have not had connections to electricity at all, people who have not been connected by DisCos. The president directed us in 2016/ 2017 to provide solar investment and we deployed 20,000 already to some villagers across 12 northern states so we have that in place and interestingly these villagers are paying for it. People are enjoying and maintaining it. Under the Economic Sustainability Plan (ESP), the government will provide another 5 million Solar Home Systems (SHS). NDPHC, that is our company and the Rural Electrification Agency (REA), have started arrangement to deploy most of these. In the next six months, we should deploy about 6,000 solar home systems. Government target is 5 million and we will make sure that this target will be specially developed by Niger Delta Power Holding Company.
You mentioned that the contractor failed to deliver, which among the 10 plants?
We have three power plants still under construction. We have Egbema in Imo state with 250MW, and Omoku in Rivers. Omoku is about 85 per cent level and Egbema is 60 per cent. We have the Gbarain power station in Bayelsa; we are supposed to have 250MW but have taken over from the contractor and we are constructing the other one. We have a plant in Alaoji in Abia state: it was designed to be a combined cycle – combination of gas and steam designed to be about 750MW. Unfortunately the contractor was only able to complete the gas turbine, so we have 504MW gas turbine operational.
How is the poor payment for energy invoices affecting NDPHC?
I don’t get fully evacuated: I just get 20 per cent evacuation and out of that 20%, only 30% of the invoice is paid. As of the last time I checked as of May, we’re owed N90 billion, but because some payments came from the Payment Assurance Facility, it should be somewhere around N60bn now for electricity generated. It is not the opportunity we lost, it is actually the service we offered, the goods we sold but unpaid for.
Our original mandate was to build and privatize these power plants, then I use the proceeds to reinvest but because of the situation of the electricity market and the economy which has been made worse by the COVID-19, we are stuck.
What is your message to Nigerians on the 60th Independence anniversary?
I will want to congratulate Nigeria. God has made us together and we will continue to stay together. We are facing challenges but it is just for a while. Nigerians have to be patient and continue to be responsible, and we have to love ourselves, no fighting.