With Fresh N44bn FEC Approvals, FG Boosts Local Content In Power Sector

The Federal Government of Nigeria has demonstrated its commitment to improving local content in the power sector with expatriates gradually exiting the power project execution scene. In this piece, Daily Trust on Sunday analyses a recent Federal Executive Council (FEC) meeting approval for N44.6 billion power transmission projects with a local content implementation plan.

The project was for a $61.5m (N28.3bn) and N16.3bn contract approved by President Muhammadu Buhari to procure transmission line materials and the construction of a 15km turn-in-turn out sub-stations across the country.

Buhari's administration had earlier on promised to generate, transmit and distribute 25,000 megawatts (MW) of power before its terminal date in office. Against this backdrop, contracts and power projects are continually awarded and implemented to ensure that even if the targeted megawatts are not on wheel, the government has documented projects to realise its power sector reform agenda.

The Minister of Power, Abubakar Aliyu, disclosed this while briefing correspondents at the end of the council meeting presided over by Vice President Yemi Osinbajo, at the Presidential Villa, Abuja.

FG begins collection of helicopter landing levy, deploys 151 officers

Maternal malnutrition; the silent killer

He said that $61.5m and the onshore component of N145m inclusive of all the taxes were for the procurement of transmission lines materials for reconductoring works for the Transmission Company of Nigeria (TCN).

According to him, another approval was sought and given in respect of the award of contract for the construction of a 15km turn-in, turn-out line of the existing Akure-Ado-Ekiti 132 single-circuit transmission line at Akure 330, 132, 33 kilovolts sub-stations of TCN at the cost of $2.5m with an onshore component of N988.5m.

In a media chat with the Managing Director Lagace Power Limited, Rhoda Afolabi, she said her company is an indigenous Engineering, Procurement and Construction (EPC) power contractor with track records of performance having completed strategic power projects across the country.

'We have completed the mechanized trace maintenance work at Benin-Onitsha transmission line, construction of new Abeokuta-Igboora transmission line, Shagamu outdoor sub-station, construction of 132/33kv D/C bays extension in Ikorodu and Shagamu Lagos.'

Other construction works include 2×60 MVA, 132/33KV at Odogunyan, 2x60MVA, 132/33KV at Ayobo and Ikeja, among others.

According to Afolabi, LagaCe Power is engaged in engineering and technical services with vast experience in power, oil and gas. 'It is a Nigerian company with 90 percent local content,' she noted.

At a recent visit to Vice President Yemi Osinbajo, she restated that the company now fabricates and manages engineering works to develop local capacity in the power sector, especially when the industry is dominated by foreign engineers and electrical contractors.

The federal government has over the last seven years, given top priority to developing the power sector using a model of indigenous power contractors that include ChrisEjik and Lagace Power. The power sector anywhere in the world is a major driver of economic growth for high productivity in manufacturing, industrial, agricultural and technology components for national development. By driving the utilization of indigenous firms, more local jobs and capacity can be created to boost the growth of Gross Domestic Product (GDP).

Though the sector has so much to do to improve supply and stimulate growth in the economy, vandalism of electrical installations and equipment across the nation has affected and resulted in the inadequate and irregular supply of power to consumers.

Nigeria has 23 generating plants with the capacity to make 12,000MW to the national grid, and out of this amount, less than 7,000MW is generated, transmitted and distributed. However, the needed energy to provide steady and adequate supply is 40,000MW.

At major power sector conferences, the Managing Director of TCN, Engr. Sule Abdulaziz, has commended some of the local firms for delivering projects within the agreed timelines. Speaking about Lagace Power, Engr. Abdulaziz had said the company has provided employment and career progression in the engineering and power sector to drive needed growth.

Also speaking about this recently after the FEC approval for the transmission projects, the Minister of Power, Engr. Abubakar D. Aliyu, said: 'I presented three memos to the council today (Wednesday) and I got approval for the three memos.

'The first memo sought the council's approval for the procurement of transmission line materials for reconductoring works for TCN in favour of Messrs Legace Power in the sum of $6m; that's the offshore value. The component for the onshore is N145m inclusive of all the taxes and 12 months of completion.'

Giving further breakdown of the approvals, the minister said the second memo seeks the council's approval for the award of contract for the construction of a 15-kilometre turn-in, turn-out line of the existing Akure-Ado-Ekiti 132 single-circuit transmission line at Akure 330, 132, 33kV TCN substation to be delivered by Lagace Power for $2.5m and an onshore component of N988.5m.

'The sub-station in Akure, which was completed over two years ago, is a 330kV substation and we could not energise that substation due to lack of line, the line is supposed to come from Benin which is a new line under construction.

'The project has a problem of right of way which we are dealing with gradually and the line is supposed to energise the Akure sub-station which was completed over two years ago,' noted Aliyu.

Speaking on the impact the new 330kV Akure transmission substation will have on the national electricity grid, the minister said: 'By the time we are able to energise the Akure line, this project would have been completed so that the whole area will have no problem with electricity. This project will be completed in 12 months and was also approved by the council.'

On the third memo, the minister said that one has five projects on it that include installation of 132, 33kV substation and transmission lines across different locations in the country for TCN in favour of several local contractors for $53m; N15.6bn onshore sum.

'The projects are all similar - design, supply and install two by 60MVA 132, 33kV transmission sub-stations across the country,' he noted.

Giving more breakdown of the projects, Engr. Aliyu said there is a substation project in Misau in Bauchi State, another in Mashi in Katsina and one in Apir and North bank in Makurdi, Benue State. TCN is also executing a project of 60MVA transformer substation at the Ebonyi State University, and also one at Ebonyi airport. In Kano, TCN is delivering a 30km transmission line from Rimin Zakara to Kayin in Kano.

'So, these are the various projects that constitute the various amount - offshore of $53m and the onshore component of N15.6bn,' Engr. Aliyu clarified.