To cut down on the volume of generated electricity in the Benin City franchise area the operarors are unable to feed into the national grid, the Niger Delta Power Holding Company (NDPHC) has signed an operational framework agreement with the Benin Electricity Distribution Company (BEDC) to deliver additional 250 mega watts (MW) to consumers from the stranded power within the area.
Stranded power is electricity generated by the operators, but cannot be evacuated into the National grid due to the inadequate capacity of the power transmission system to accommodate it.
The Managing Director of NDPHC, Chiedu Ugbo, said at the signing ceremony in Lagos that the agreement would take off immediately.
Some of the initial project areas include Benin Bypass (industrial cluster near NDPHC’s power plant at Ihovbor, Benin-City, Edo State; Asaba, Delta State, Ondo South Senatorial District, Ondo State and interventions in Ekiti State.
Ugbo said the two companies had in 2020 commenced exploring options to collaborate to deliver safe and reliable power to customers of the BEDC’s franchise area.
He expressed satisfaction that both organizations have finally been able sign a framework agreement for the collaboration.
“For NDPHC, the project will enable us to deliver more 250MWs of electricity to customers of BEDC’s franchise areas in Edo, Delta, Ondo, and neighbouring states.
“For BEDC, the project will help BEDC to satisfy its customers with reliable power and achieve an enhancement of its network and infrastructure”, the MD said.
Also, he said for BEDC’s customers, their homes and industries can now enjoy 24 hours power supply.
Ugbo said for BEDC’s investors and NDPHC shareholders who are the trustees of the Nigerian people, this project would deliver significant value to the system.
He noted that the NDPHC has been concerned about the “insufficient dispatch of its power generation capacity as well as liquidity challenges, considering that only a small proportion of the power dispatched gets paid for by the consumers, even as many consumers remain unserved or underserved.
Earlier, Ugbo said the long road to the agreement began with the initiation of the National Integrated Power Project (NIPP) by the Federal Government of Nigeria in 2004 as a government-funded project to stabilize the country’s power sector. With the agreement, he said the government incorporated the NDPHC as a limited liability company to serve as a legal vehicle to hold the NIPP for its states and local governments.
Since then, Ugbo said the Nigeria electricity supply industry (NESI) has evolved significantly from the construction of NDPHC’s 10 power plants with combined capacity of over 5,000MW.
Out of volume, more than 4,000MW has been completed due to the privatization transactions from which BEDC emerged as one of the 11 distribution companies in Nigeria.
The evolution, he noted, has presented the industry players, including NDPHC and BEDC, with unique challenges to contend with.
For the electricity distribution firms, he said the significant capital investments required to upgrade their respective networks has been difficult to raise due to industry challenges.
The Chief Executive Officer of BEDC, Funke Osibodu, said her company aims at delivering incremental power from the underutilized or stranded capacity by the NDPHC to several industrial and commercial hubs through multiple solutions across certain locations in Delta, Edo, Ondo and Ekiti for electricity value chain. Osibodu said under the agreement, BEDC and NDPHC would provide end-to-end power solutions across the value chain to deliver minimum of 250MW of additional power to consumers in the franchise area.
Osibodu said the collaboration would see the BEDC partner with NDPHC and others to identify and prioritize critical projects to help increase power supply while improving on the technical and commercial environment.
She said the focus would be power supply to certain areas as well as upgrading of all critical distribution infrastructure in the area.
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