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Canadian company to reorganise Transmission Company of Nigeria

3 August 2012 – Manitoba Hydro International (MHI) has signed a US$23 million management accord that will see it reorganise the Transmission Company of Nigeria (TCN), with the aim of eventually privatising part of it.

"MHI expects to turn TCN into a technically and financially efficient, stable, and sustainable company that will be market-driven and capable of utilising its maximum generation capacity and then distributing the energy throughout Nigeria 24 hours a day, 365 days a year," MHI says.

This is a significant step in the country’s power sector reform programme. Bola Onagoruwa, bureau of public enterprises director general, who signed the contract on behalf of the federal government of Nigeria, says MHI to which government had made an advance payment of US$2.5 million will begin work immediately. “The management contract will provide efficient management of government investments and ensure adequate and equitable generation dispatch, according to fair merit order and sound regulatory principles. It will also ensure fair market settlements between electricity traders and provide for skills and expertise transfer to the Nigerian counterparts who will serve as deputies and in other positions among the management staff of the management contractor,” she says.
Pillars of Nigeria’s power reform roadmap already in place include the establishment of an independent regulator for the sector; the Nigerian Electricity Regulatory Commission (Nerc), setting up of the commercial framework for the sector (via cost reflective electricity tariffs) and the bulk trader.
The remaining pillars for the sector still to be implemented include the privatisation of Power Holding Company of Nigeria’s (PHCN) six successor generation companies, privatisation of the eleven PHCN successor distribution companies, and the continued strengthening of the fuel-to-power segment.
Nigeria with a population of 160 million people is estimated to need about 40,000 MW of electricity over the next decade, but currently has less than 6,000 MW of available capacity, leading to costly blackouts that have kept the country’s economy from growing at its full potential for decades.