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Only Lagos and 4 Others Can Fund Electricity Transmission Line

0 68
power sector

CEM REPORT, ENERGY | According to a recent report by the Energy Market and Rates Consultants (EMRC) only Lagos, Rivers, Ogun, Delta and Federal Capital Territory (FCT), Abuja can fund transmission lines of 100 km for electricity transmission and distribution.

Hence EMRC in its report advised states to collaborate with the Transmission Company of Nigeria (TCN) on electricity transmission-related matters within their states or consider public-private partnerships for financing transmission within the state.

This is riding on the back of the recently signed 2023 Electricity Act by President Bola Ahmed Tinubu which empowers states to generate, distribute and transmit their electricity.

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The report explained that only the above-listed states generated an internally generated revenue (IGR) of $1.58 billion (N750 to a dollar), which was 63% of the entire IGR by states in 2021.

According to a document by Grid North Partners, which was quoted in the EMRC study, the price to establish an overhead electricity transmission line ranges from $1.5 million to $2 million per mile, or $931,677 (using $1.5 million) per kilometre.

A part of the EMRC report stated:

“This means that using the average price against a total overhead transmission line of 17,740 km, the estimated cost of the Nigerian transmission infrastructure in today’s value is $16.5 billion for the network lines alone. This estimated cost of $16.5 billion does not include the cost of substations, circuits, control centres, work centres, or financing costs.

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“If all the states in Nigeria spend their total revenue generated on building transmission lines alone, they will only be able to build 2,748 km of transmission lines, which is 15% of the current length of transmission lines in Nigeria.

“Also, it is important to note that states cannot spend their total IGR on just one sector as multiple factors contribute to the welfare of states like health care, education, etc.”

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