Electricity Deficit: Ex-NDPHC Boss Urges PPP, Independent Transmission Project Model

The immediate past managing director of Niger Delta Power Holding Company (NDPHC) Chiedu Ugbo, has advocated the use of the Independent Transmission Project (ITP) model of public private partnership to solve the long standing electricity deficit.

Ugbo, a senior partner of Power Matters Consulting, who spoke at a power sector summit organised by the House of Representatives Committee on Privatisation and Commercialisation noted that public treasury alone lacked capacity to fund the rehabilitation and expansion of the country’s transmission grid to achieve a functional, reliable, and stable electricity supply.

Transmission has been identified as the weakest link in the electricity value chain.

The summit was convened to assess the progress of power sector reforms, address persistent challenges, and explore actionable strategies for improved sector performance.

In a presentation on the role of Public-Private Partnerships (PPPs) in revitalising Nigeria’s electricity sector, Ugbo highlighted that while the generation and distribution segments of the electricity value chain have been substantially privatised, the transmission segment remains wholly owned and operated by the government. He emphasized that transmission, alongside distribution, has been consistently identified as one of the weakest links in the electricity value chain, limiting the sector’s overall efficiency and performance.

According to Ugbo, this makes the transmission segment a prime candidate for PPP intervention, particularly through the Independent Transmission Project (ITP) model, which offers an opportunity to mobilise private sector investment and expertise to modernise and expand Nigeria’s transmission infrastructure.

“This model has been successfully applied in countries such as Brazil and India, where private capital has significantly expanded transmission infrastructure under clear regulatory frameworks.”

He explained that the Electricity Act of 2023 provides a robust starting point for such innovation, having established a clear licensing regime for Independent Transmission Providers. “Given the enormous cost of revamping Nigeria’s transmission infrastructure, it is evident that public resources alone are insufficient, and that private sector funding through ITPs is essential.”

The federal government has a target of 30,000 MW of electricity generation by 2030, which requires an estimated $262 billion investment. Transmission Company of Nigeria (TCN), which is  responsible for electricity transmission alone, requires about $2.2 billion to execute 149 projects aimed at improving transmission infrastructure.

The infrastructure regulation specialist further stressed that NDPHC has successfully completed several high-voltage transmission projects, demonstrating that it is indeed possible for the Transmission Company of Nigeria (TCN) to collaborate with third parties—particularly private sector partners—to deliver transmission infrastructure and services effectively.

He noted that for the ITP model to succeed, the key requirement is the establishment of commercially viable project structures with fair risk allocation. “These must be backed by a strong political will, coherent policy direction, and robust regulatory oversight to create a stable and attractive environment for private investment in transmission.”

He noted that the ITP model is essentially a transmission-focused counterpart to the Independent Power Producer (IPP) model. And that the improvements now seen in Nigeria’s generation capacity were catalyzed by early IPPs such as AES, Shell JV IPP, and Agip JV IPP, and more recently, the Azura-Edo IPP, which played a pioneering role in attracting private investment and building confidence in the sector.

These early IPPs paved the way for the successful privatisation of the PHCN successor generation companies, many of which have, to a large extent, increased installed capacity and improved performance in line with their contractual obligations.

In the same way, the ITP model provides a viable pathway for modernising Nigeria’s transmission infrastructure through private sector participation, by clear regulation and commercially bankable structures.

He emphasised that Generation Companies (GenCos) in Nigeria should be encouraged to act as first responders in championing the ITP model, given their vested interest in expanding evacuation capacity and improving overall system efficiency.