Plans to realise one of Nigeria’s largest power projects – a 1,000 MW gas-fired plant in the Niger Delta – have been suspended by Transnational Corp with reference to gas shortages. “How do you make the investments when you are generating far below your current capacity due to gas problems,’’ CEO Emmanuel Nnorom told reporters.
Back in 2014, Transnational Corp had pledged to raise $1 billion to build the large gas-fired power plant; after having bought the Ughelli plant in the Niger Delta from a government-run entity and boosting its capacity to 700 MW.
Now, gas shortages have become more frequents as militant groups are stepping up attacks on pipelines. Moreover, debt capital is getting more expensive for project developers after the government in Abuja removed a currency peg with the US dollar.
New-build target in doubt
Fuel shortages have brought much of Nigeria’s gas-fired capacity to a standstill. Less than half of the installed capacity of 6,000 MW can be dispatched. Output at the Ughelli power plant has plunged to just 70 MW, before recovering to 300 MW – still less than half of its actual installed capacity, Mr Nnorom pointed out.
Lack of electricity transmission infrastructure is one of the stumbling blocks for Nigeria to reach its goal of tripling generating capacity from 3 GW last year to 105 GW by 2025.
Yet, Ecobank analysts doubt that these targets can be achieved as multiple end-users refuse to pay their energy bills in anger over frequent blackouts. Fuel shortages and lack of project financing are further issues that have proved hard to overcome.
In June, Nigeria – a nation with over 180 million people – generated an electricity output of just 2,464 MW, according to the energy ministry.