Nigeria Aims For $1trn GDP With Increased Power Generation, TCN Restructuring

The Federal Government announced ambitious plans to restructure the Transmission Company of Nigeria (TCN) and significantly increase power generation in pursuit of a $1 trillion Gross Domestic Product (GDP) by 2030.

During a Ministerial Retreat on the Integrated National Electricity Policy and Strategic Implementation Plan, themed “Navigating and Aligning on the Path to Enhanced Electricity Reliability,” Power Minister Adebayo Adelabu outlined the government’s strategy.

Highlighting the need for restructuring, Adelabu stated, “It is time to restructure the TCN into two entities: the Independent System Operator (ISO) and the Transmission Service Provider (TSP).” This move aims to align with the Electricity Act 2023 and evolving industry demands.

To achieve the ambitious GDP goal set by President Bola Tinubu, Adelabu emphasised the importance of massive investments in electricity. He stressed the need for collaboration between the federal, state, and local governments to improve electricity coverage and distribution nationwide.

Addressing the challenges within the sector, Adelabu pointed to poor contracting practices, inadequate capitalisation, and the volatile pricing of gas utilised by Generation Companies (GenCos). He proposed transitioning to trading gas in Naira to mitigate foreign currency fluctuations and incentivize domestic gas production for electricity generation.

The minister also underscored the need for a sustainable capital investment program focused on gas processing and transportation infrastructure as a key deliverable of the policy-making process.

He said, “A preferable option was to ensure that gas utilised by the GenCos is traded in naira so as to manage the foreign currency-related inflationary trends that challenge the application of the Multi-Year Tariff Order (MYTO) methodology.

“ We must find ways and means to pursue domestic gas policies and incentivise stakeholders for the supply of gas for inland use in electricity supply.

“Other industrial activities and conversion to Compressed natural gas (CNG) and Liquefied Petroleum Gas (LPG) for transportation and domestic uses respectively.”

Wale Edun, Minister of Finance and Coordinating Minister of Economy, stressed the government’s commitment to improving the power sector. He acknowledged the disappointing results of the privatisation exercise conducted ten years ago and highlighted the need for stakeholder engagement in finding solutions.

“Ten years ago there was a privatisation exercise, but it has underwhelmed and underperformed and the results have been disappointing so it is important that those stakeholders are part of the conversation and solutions.

“In addition to all other options that we have for providing electricity, we now have an array of options with renewable energy, green energy.

“What we want to see is a solution of providing power and growing the economy rapidly and inclusively,“ he said.

Earlier, Permanent Secretary, Ministry of Power, Mr.Temitope Fashedemi, said that the retreat was for stakeholders to sit together and chart a way forward to achieve the mandate of kps given to the minister.

Fashedemi said that participants at the retreat were drawn across the value chain of the power sector as well as other sectors of the economy that align with the sector.

“It is, therefore, expected that the outcome of the retreat will form the basis of the development of the new integrated national electricity policy and its strategic implementation plan which will guide other reforms the minister has for the sector“, he said. (NAN)