Signing Ceremony of A Memorandum of Understanding Between 3 (Three) Nigerian Power Distribution Companies, Organized By USAID Nigeria At Transcorp Hilton Abuja

May 23, 2016 - Ladies and Gentlemen,

About two weeks ago, I unveiled the roadmap to resolving our power challenge as a three-phase plan, comprising the provision of incremental power, from which we will move to attaining steady power and from there to the final phase of uninterrupted power.

Before that plan was made public, a lot of background preparation has taken place to ensure the completion of projects such as transmission stations and completion of ongoing power plants.

We have also focused on accelerating the deployment of solar power in order to diversify our energy mix and reduce our dependence on gas and the risk that over-dependence on gas poses to our plan of incremental, steady and ultimately uninterrupted power. I will speak a little about that later.

Of course we could not deliver on our plans without strengthening the DisCos (the distribution companies) who are the public face of the power chain.

They are the ones that consumers know, because they are the ones who collect money, but they are not the only ones who act to provide power, and the money they collect is not for them alone. They must pay the transmission company, the generation company and the gas supplier.

But in order for the power sector to deliver to consumers, they must be seen to do their part, improve service delivery, and have the finances to upgrade their equipment, provide meters, and resolve customer complaints.

We are doing a lot in our regulatory capacity from the Ministry and through the institutional regulator, the Nigerian Electricity Regulatory Commission (NERC) to ensure that all players including the DisCos play their part.

On Friday, 20 May 2016, 3 (THREE) days ago, I was in Lagos at the instance of the Central Bank of Nigeria to witness the disbursement of N55 Billion being a loan support of a 10-year tenor to Gas, Generation, Transmission and Distribution companies under the Nigerian Electricity Market Stabilisation Facility programme.

This programme helps to cushion the financial and liquidity issues which can hinder our progress to our goal of incremental power.

In addition, the programme commemorated the formal evolution of the power sector to a contract regime, where guarantees and performance obligations now have a full meaning.

This was a major milestone in the transition of Nigeria's power sector from public, government operated to a private run, government regulated regime.

Ladies and gentlemen, today we gather for another important milestone.

A partnership between the United States government, under the aegis of USAID and Power Africa initiative on one hand; and Nigeria's power distribution companies, the DisCos, on the other hand.

It is a partnership through which funds of $9 Million per year will be provided to improve performance of the DisCos through embedded advisors.

This is another big step towards achieving our roadmap's first phase of incremental power, by improving the performance of the DisCos.

And I must on behalf of all the DisCos and the expectant Nigerian electricity consumers thank Ambassador James F. Entwistle for the love and support he has manifestly demonstrated for Nigeria since he reported for duty here in 2013.

Before I conclude, let me return to the point I made about the risk of our dependence on gas.

Since Nigeria started producing oil, she has perhaps understandably built more gas fired power plants, some Hydro plants and largely stopped using coal.

My recent visit to Oji River coal power plant in Enugu, which used to supply most, if not all of Eastern Nigeria, shows that not only is the power plant no longer in use, most of its operating parts have been dismantled.

At a time when the world is in dire pursuit of clean energy to mitigate the impact of climate change and global warming, gas fired plants provide a useful source of quick, large capacity electricity plants which can take us faster to our roadmap of incremental power.

Regrettably, some of our people have attempted to turn a potential source of growth, development and shared prosperity into a source of risk, poverty and pollution.

Since the 2nd of February 2016, when we attained the highest ever level of electricity generation of 5074 MW, power supply has dwindled as a result of deliberate vandalization of oil production platforms and pipelines and gas supply lines.

For those who do not understand the risk and who perhaps can act, speak out and provide information that will help solve the problem, but who have not yet done so, let me use this opportunity to start what I call a conversation of stability and prosperity by highlighting the risks:

i. Every time a petroleum pipeline is damaged, the oil goes into the water and farmlands, and destroys any opportunity for fish farming and agriculture. Let those who are behind these ill-thought actions remember that it is their water and farm lands that will produce food to feed this and upcoming generations, not oil.

ii. In case these people are not aware, the President Buhari administration has just concluded plans to start a clean-up of the pollution in the Niger Delta. This is what I understand that Ken Saro-Wiwa agitated for. Do these people want to add to the pollution or to the clean up?

iii. Every time an oil pipeline is damaged, oil production stops, so does the sale of crude oil, and this means income that Nigeria will earn for Federal Government, state governments and local governments will reduce. Do these people think about the workers who have not received salaries because of dwindling revenue when they attack oil pipelines? Is this hurting the Nigerian government or ordinary working Nigerians?

iv. Let me remind these people that the world is looking for a life without oil, and gas provides an opportunity for prosperity and development that gas producing regions can benefit from. This will not happen with a continued mindset of destruction and vandalization. Investors have a capacity to move to other sectors like agriculture and mining.

I believe that my posers provide enough food for thought for all leaders in gas producing areas to act in an enlightened common and self-interest.

The immediate cessation of vandalization is a matter that goes beyond partisan political interests. It is a decision that fosters national development and a shared prosperity. I must therefore commend some Governors who have demonstrated leadership by rising to the occasion.

However, I must emphasize everybody who cares about our prosperity must get involved in this conversation and act positively to help to bring an end to the unpatriotic actions of those who attack our oil platforms and gas lines.

Whatever the case, our ministry is already acting to reduce this risk. We are working hard to stimulate the use of solar, and we are accelerating plans to complete Zungeru Hydro power plant, the kashimbilla hydro plant, the Gurara hydro plant and conclude the procurement plan to start the construction of the Mambilla hydro plant.

In addition, I am pleased to inform you that the ICRC has concluded business case reviews for the first phase of 8 (EIGHT) small hydro power plants

We will be taking further steps to complete the procurement process and start work on these dams to generate electricity with our water resources and gradually reduce our dependence on gas and the risk of a single power source.

We have been dependent on gas by choice and we will become independent by choice and diversification.

This will make a roadmap to incremental power achievable and sustainable.

Thank you very much for your attention.

Babatunde Raji Fashola, SAN
Honourable Minister of Power, Works and Housing