Power Sector Intervention: AK PHCN Distribution May Be Acquired By AKSG
17 Oct 2010
An appeal has gone to the Federal Government to treat the sum of eighty million dollars given to the Akwa Ibom State Government to fund Ibom Power Company (IPC) as a grant to support the efforts of the state in the development of the power sector. The said amount was to be treated as a debenture and refunded to the Federal Government, but unfortunately this has not happened because the project was not completed on time.
The State Governor Chief Godswill Obot Akpabio made the appeal when President Goodluck Jonathan officially switched on the generating plants of Ibom Power Plant during his working tour of the state few months ago. Governor Akpabio also urged the Federal Government to collaborate with Akwa Ibom State Government in the execution of phase 2 of the plant, which would lead to a power generation capacity of a further 550MW to give the plant a total capacity of 685MW.
Earlier, Chief Akpabio traced the genesis of Ibom Power Plant. He said the project was conceived and started by the past administration. According to him, at the inception of his administration, IPC was about 65% completed, though it was said to have been inspected and commissioned by former President Olusegun Obasanjo. "The various technical reviews we inherited showed that enormous investment was still required to bring it to a level of generating power," he said.
The Governor told the president that IPC is being completed in phases, the first being the provision of the 190MW required for the anticipated needs of the state for the next five years. "Phase two," he went on, "with a capacity of 550MW, will commence in due course." The State’s Chief Executive said apart from powering the social and economic development of the state, Ibom Power would also contribute significantly to meeting the nation's great demand for power. He disclosed that with the state's current power requirement at about 70MW, the plant is positioned to contribute 120MW to the national grid under phase one and an additional 550MW at the completion of phase two.
Governor Akpabio informed the president that since December 14, 2009, Ibom Power Plant has been generating and transmitting power and this has been absorbed by the Power Holding Company of Nigeria (PHCN) into the national grid, pointing out, however, that there had been significant challenges which required the President's intervention. Such challenges, Chief Akpabio said, included, first, the issue of the evacuation of generated power. While phase one has the capacity to generate 190MW of electricity, only 80MW can be evacuated beyond Eket, due to inadequate transmission infrastructure between Eket, Uyo and Itu.
Second, the governor stressed, there was an urgent need to restructure the distribution system which, according to the state's chief executive, is in a very sorry state across the country. He said although the Federal Government was considering the privatization of the distribution system to address this, the belief was that the best fit would lie with the take-over of power distribution by state government working with private partners.
Governor Akpabio further stated that since power is both an economic and social need, state governments with their closeness to the people, are best positioned to address these needs. In line with this therefore, he opined, Akwa Ibom State was prepared to work with private partners to acquire and upgrade all PHCN distribution infrastructure in the state, appealing to the President to direct that PHCN and all relevant authorities immediately commence negotiation with Akwa Ibom State Government with the ultimate aim of transferring to it all power distribution infrastructure in the state.
Governor Akpabio also appealed to the president to direct PHCN and its associated companies, as a matter of urgency, to conclude and sign off the re-negotiated Power Purchase Agreement (PPA) with Ibom Power Company under conditions beneficial to the industry. He said this is one of the two issues necessary for the success credentials of a power project, the second being the Gas Risk Issue which addresses the availability and reliability of feed-stock needed to fire the plant.
The Governor lamented that, in the past few months, Ibom Power Plant had been regularly shut down due to gas supply issues. And in efforts to address this, he said, the state government, through its investment arm, Akwa Ibom State Investment and Industrial Promotion Council (AKIIPOC) opened discussion with Seventh Energy Group on how to collect and process gas from the state to feed the power plant. The discussion, Chief Akpabio added, has produced the first public private sector driven initiative aimed at utilizing the abundant natural gas reserves in the state to generate power.