Nigeria plans to concession power generation plans

Nigeria is making strategic moves to improve its electricity outcomes with plans to concession the Transmission Company of Nigeria (TCN). The government's decision to focus on enhancing the transmission segment of the power value chain is aimed at addressing the challenges that have plagued the sector for years. Oti Ikomi, CEO and Executive Vice Chairman of Proton Energy, sheds light on the implications of this move during an interview with CNBC Africa. The transmission segment of the power chain plays a crucial role in ensuring efficient electricity delivery to consumers. However, Nigeria has been grappling with significant losses in this area, with aggregate technical collection and commercial losses amounting to around 45 to 50 percent. Ikomi points out that nearly half of every 100 Naira is lost to transmission, collection, and commercial inefficiencies. The concessioning of TCN comes at a critical time when the government is striving to reduce these losses and improve power transmission across the country. Ikomi highlights the significance of the recent announcement regarding the concessioning of TCN at a webinar organized by the Bureau of Public Enterprises (BPE), the Nigerian Exchange Group, and the Nigerian Investment Promotion Commission. He emphasizes that the move is expected to create the necessary impetus and support structures to enhance transmission efficiency. By empowering the system operator and strategically planning for future power demands, the concessioning of TCN is poised to catalyze a positive shift in Nigeria's power sector. As Nigeria navigates through the concessioning process, Ikomi explains that it will not involve an outright sale but rather a period of concession. Drawing parallels to previous concession exercises in the energy sector, such as the hydro plants Kainji and Jeba, he underscores the potential financial benefits and cost reduction opportunities that the concessioning of TCN could bring. With various power initiatives already in motion, including the Presidential Power Initiative and efforts by the Central Bank and Azuri Technologies, aligning the concessioning of TCN with these existing plans is crucial for maximizing impact. However, Ikomi acknowledges the need for a more synchronized approach in driving the numerous power sector initiatives. He advocates for clearer orchestration and centralized leadership to ensure the success of these endeavors. While the concessioning of TCN is a significant milestone, Ikomi stresses the importance of continuous government support and the implementation of complementary initiatives in generation and distribution. Establishing a conducive environment for the concessioning process and fostering sectoral government support are essential to propel Nigeria's power sector towards self-sustainability. In conclusion, Nigeria's decision to concession the Transmission Company of Nigeria signals a positive step towards revitalizing the power sector and addressing longstanding challenges. By focusing on strengthening the transmission segment and aligning with existing power initiatives, the country is poised to enhance electricity delivery, reduce losses, and drive overall sectoral growth.