INTERVIEW ! Power sector needs cost reflective tariff to survive- Barth Nnaji

In this exclusive interview with OLUWAGBENGA BANKOLE, the former Minister of Power and the Managing Director of Geometric Power speaks on the need for Nigerians to accept the new tariff, how Nigeria can increase it generation capacity to 10, 000 by 2019, what Federal Government should do to TCN and some other typical issues in the power industry. Excerpt!

On the 1^st of February, 2015 the new electricity tariff which is believed to be cost reflective took effect. What is your opinion about the implementation of the tariff despite the fact that it was rejected by Nigerians?

There must be cost reflective tariff for the industry to work. Nigerians may think that any kind of tariff increase is not worthwhile because they don’t have adequate electricity. We can’t continue to waddle in darkness because we cannot pay producers of electricity. The Nigerian Electricity Regulatory Commission (NERC), Federal Ministry of Power and the electricity companies are all in line with the implementation of this cost reflective tariff.

Did you believe is one of the solutions to the problem of epileptic power supply in Nigeria?

It is definitely a component of it.

Recently, the Acting Chairman of NERC said that the court of law and the Senate does not have the power to stop the implementation of the new tariff. As someone who has seen it all in the industry, how true is this?

Going to court of law to stop the implementation of the tariff will delay the progress of the power sector in Nigeria. There are various ways of ensuring that the correct thing is done. When people fail to channel their complains through the right path it becomes a problem. Of course the court will entertain any case brought to him, but we should not continue to waste time and resources on such things.

Since the privatisation of the power sector in Nigeria, there have been calls by some notable Nigerians and stakeholders for the review of the privatisation. As an expert in the industry, what is your assessment of the privatisation? Do you think it should be reviewed?

I think that we can say there was perfect arrangement and it is worthwhile for it to be looked into not in terms of overturning it because it would ruin Nigeria’s image. Foreign investors would not understand us because it would be one step forward and two steps backward.  But there are sections of the privatisation that might not have been implemented correctly. The original plan was correct but it may not have been implemented completely well. So it could be looked into.

What do you think could be done by this present administration concerning the privatisation?

The present administration led by President Muhammadu Buhari should support the privatisation and the power reform, but that does not mean they should not look at how the entire transactions of the privatisation was done.

Some people have been calling for the privatisation of Transmission Company of Nigeria (TCN). What is your opinion about that?

Privatisation can take many forms. Privatisation may not be outright sell. It could be concession because the government needs to have a certain level of control because of open access issues. We should not have a private company resisting access to the network just by its own will. So government provides that, but at the same time government does not have enough money to build up the network to the capacity that we need. It needs private money. Government should play its own role and private sector should play it own role.  If it is concession it can work to the benefits of Nigerian government and Nigerians and provide the resources to do it.

As a former minister of power and one of the key stakeholders in the country, what are those things President Muhammadu Buhari can do to ensure that our generation capacity hit 10,000 megawatt by 2019?

To generate 10,000 megawatt by 2019 is totally doable. He needs to address the issue of transmission, the issue of adequate gas supply to our power plants, we need to have a very good control of vandalism for both the gas and power transmission network and also compel distribution companies to do what they are suppose to do from when they bought the companies. The generation companies are already moving along. What the government needs to do for them (generation companies) is to continue to provide support in terms of giving them incentives. The cost reflective is also needed to achieve this goal.

What is the latest concerning the plan of Geometric Power to build 1,800 megawatt power plants?

 The project has moved on quite far. We are in partnership with General Electric for the success of this project. We are building the power plants in phases. The first phase is 500mw. We will add 250mw in the second phase and from there it will go to 1,800mw. The development of a power project is the most difficult part because you have to develop all the components to be bankable. And we have pretty much visually reached that point where we will begin to go to international institutions for financing of the project. We expect that this year we should reach the financial close of the project.

As a former minister of power, what is your advice to the current minister of power, Mr. Babatunde Fashola?

The minister does not need too much advice because he is a very clear minded individual and very strong. I believe that he will do very well. I will just encourage him to continue to maintain the pace of the reform.