Myriad Problems May Stall IPPs -Dr. Ransome Owan

Dr. Ransome Owan

By Joseph Inokotong

Insufficient gas supply, inadequate finances and turbine equipment are posing serious challenges to the success of the Independent Power Projects scattered across the country.
The Chairman, Nigerian Electricity Regulatory Commission (NERC), Dr. Ransome Owan who disclosed this, explained that although about 29 licenses have been issued to private power providers to generate electricity, till date, many of the IPPs have not been able to go far in their various projects because of shortage of gas, turbine equipment and insufficient funds.
He attributed the paucity of funds to the high interest rates charged by banks to finance the projects in the country.
Dr. Owan said this at the Quarterly meeting organized by NERC for the IPPs on project status, which took place in Abuja, recently.
The NERC chairman said, “we have so far issued a total number of 29 IPP Licenses to private companies to generate power which will add additional 10,271mw to the grid when all the IPPs become fully operational, but it has been discovered that the IPPs are currently facing the above mentioned problems hence we are holding this stakeholders meeting”.
He pointed out that the commission is also aware that the licensees have been constrained in the fulfillment of certain milestones which require interventions through proper guidelines and directives, and urged them to feel free to brainstorm on the issues at the forum so that solutions can be proffered for the investors to forge ahead.
“Today, we want to know some of your constraints and challenges apart from the ones we already know in the quest of recommending to government the needed step to be taken so as to make the projects work”, the NERC chairman emphasized.
He pointed out that NERC is aware of the progress made by most of the licensed IPPs to attain the given milestones in spite of some of the difficulties and challenges arising from the nature of power projects, and reminded the people that power projects are not only capital intensive, but also have long gestation period for the desired result to be realized.
He called on participants and all stakeholders in the power sector to deliberate exhaustively and come-up with recommendations on how the problems will be solved.
In his message at the occasion, the permanent secretary in the Ministry of Power (Energy), Dr. Abdulahi Aliyu said that the 50 per cent supplementary budget for the NIPP projects have recently been passed by the National Assembly, adding that in the next few weeks, the projects which started in 2006 would be completed nationwide.
The chairman of the Independent Power Providers Association, Professor Bert Inagi said the major problem facing its members is that of financing their various projects as interest rates charged by banks were outrageous.
“We need all stakeholders to be on ground to help the IPPs in this regard. The issue of tariff, equipment like turbine, etc, which are not manufactured here all add to our constraints” said Professor Inagi.
He also pointed out that at present there are no active coal generation in Nigeria, while issues like settling the chiefs or local village heads should not be over looked as they complicate matters for the IPPs.