Experts have cautioned the federal government against proliferation of agencies in the power sector, which they said won’t solve the perennial issue in the sector if existing ones are not strengthened to carry out their statutory functions.

The warning is on the heels of the creation of the Grid Asset Management Company (GAMCO) with the aim to “fast track a quick-fix solution to the endemic problems of stranded power, grid management and transmission in the country’s electricity sector,” according to a statement by Special Adviser to the President (Information and Strategy), Bayo Onanuga.

The statement which said the government had constituted an 11-member committee to ensure the smooth sailing of the company will assess the legal status, ownership structure, and contractual obligations of the Niger Delta Power Holding Company (NDPHC) and National Integrated Power Project (NIPP) assets, including the Omotosho, Olorunsogo, and Ihovbor plants, which GAMCO plans to use for its pilot phase.

It added that the committee will be headed by the Chief of Staff to the President, with the Attorney–General of the Federation and Minister of Justice, and the Ministers of Power, Works, and Finance as members.

“Others include the Ministers of Communication and Digital Economy, Science, Technology and Innovation, Aviation and Aerospace Development, the Minister of State (Petroleum), the Chairman of the Nigeria Revenue Service, and energy expert Professor Yemi Oke. The Permanent Secretary of the Cabinet Affairs Office, Dr John Chidiebere Ezeamama, is the committee’s secretary.”

It added that the company will modernise transmission evacuation, starting from the most critical axis within Nigeria’s power system.

“The Benin-Lagos transmission corridor evacuates bulk power supply to Ogun and Lagos states, Nigeria’s largest industrial and commercial centres. The pilot phase will focus on optimising power output from the Omotosho, Olorunsogo and Ihovbor National Integrated Power Plants (NIPP plants). Omotoso’s installed capacity is 513MW, Olorunsogo’s 754 MW, and Ihovbor’s 508 MW.”

It said the project seeks to recover at least 1,600 MW within 18-24 months, alongside the development of a new high-capacity 330V+ double-circuit transmission line along the same corridor.

To achieve this, it said the Niger Delta Power Holding Company will grant GAMCO the concession and lease arrangements for the three plants and TCN will grant GAMCO the right to develop, finance, and operate a greenfield 330KV+ double-circuit independent power transmission line along the identified corridor.

“The ultimate aim of the initiative is to enhance industrial productivity, safeguard jobs, improve investor confidence, and boost welfare outcomes for Nigerian households, aligning with the Renewed Hope Agenda of the Tinubu administration.”

GAMCO will create conflict, more policy instability – Expert

But Speaking with Daily Trust, Prof. Dayo Ayoade, Energy Law expert at the University of Lagos, said the inability of the transmission sector to will power to discos is a well-known bottleneck.

According to him, the creation of a commercial grid asset management company means there will be a situation where the government will own the grid but it will be run as a commercial venture.

It said this concept makes sense on the face of it as it is a means to attract private investment capital and ensure the country can recover stranded generation capacity.

“But we should think a bit more deeply about this because the success of power sector reform depends on good governance and we have no example.

“This amounts to a proliferation of institutions in the power sector. We have too many conflicting, overlapping institutions and they will create more policy instability. My own view, respectfully to the government, is that these ad-hoc reforms are where a problem happens and then you go and try to tackle that small problem by creating another problem elsewhere.”

He said the power sector requires a stronger hand.

“It requires more of a large picture reform, a holistic top to bottom review which I thought they would use the opportunity to do.

“That will allow us to streamline current institutions, collapse those that we don’t need or duplicate functions and ensure that we reduce the overall cost of managing these institutions. And more importantly, we need total transparency of information and data. We need publicly available data so that independent experts can help the government by reviewing that independent data and letting us know the true state of the power sector,” he added.

On his part, the Executive Director of PowerUp Nigeria, a consumer advocacy group, Adetayo Adegbemle, said the creation of the agency creates more questions than answers in resolving the situation in the country.

“What’s happening with the Presidential Power Initiative/ FGNPowerCo? Isn’t there an overlap of functions with GAMCO? What’s the end idea of this GAMCO? How does GAMCO interface with other stakeholders? If GAMCO is headed by the Chief of Staff, is it a board-like role and there will be a working office? How does GAMCO interface with the Ministry of Power? What Powers exactly does this Constituted committee hold? Is it advisory or Executive? Where does the Nigeria Integrated Energy Plan by EA2023 come in all of these?”

He added that these questions are important as the sub-agencies continue to proliferate in the sector while Nigerians are yet to see solutions they are bringing to resolve the power sector’s conundrum.

However, CEO at Sage Consulting & Communications, Barr. Bode Fadipe is of the view that the new move is the last hope for the emergence of a power sector that can deliver on its mandate at least in terms of the creation of the right environment, which starts with the political will and the right piece of legislation that will support the decision.

“Starting with the members of the committee, you will see that there are eight ministers with the CoS as the Chairman. The position of the CoS is extremely and strategically important in this matter. Not that alone, the committee has three SANs, the AGF, Festus Keyamo and Prof. Yemi Oke who is a globally acclaimed expert in electricity law with cross border knowledge and experience,” he said.

Fadipe stated that composition should send a signal to analysts and one of the signals it will send is that the enabling law needs to be clinically examined.

“Government has also in its wisdom added the Chairman of the Nigeria Revenue Service suggesting that the government is aware that the power sector is a cash cow or goldmine from which it can make a lot of money if the right thing is done. The placement of men with certain expertise is not for fun. It is always because the government wants to achieve certain aims and objectives,” he added.

‘…Addressing liquidity challenge, way to go’

Also, an energy expert Othman Quchi, said the power sector seems to be working backwards or things are being done in reverse cycles.

He noted that FEC approved the company first while a committee was established to figure out the details later.

“You would think they had defined the objectives before setting it up,” he said, adding that GAMCO might just be a Band-Aid solution if it doesn’t address the root causes of Nigeria’s power sector woes.

“Fixing existing structures and tackling governance and liquidity issues head-on is the way to go. I am concerned that GAMCO might be sidestepping the real issues. Instead of throwing another company into the mix, maybe we should fix the existing structures. Governance and liquidity challenges aren’t going anywhere with more bureaucracy.”

“GAMCO, TCN, NDPHC, FGN POWER CO, they all deal with aspects of transmission infrastructure. There’s need for streamlining to ensure a holistic and harmonised approach to transmission issues, including alignment with NISO on resolving dispatch bottlenecks.

Is there anything new GAMCO is bringing to the table that can’t be achieved under the present disposition?

Is it established that TCN in its current state can’t perform these tasks that they are saddled with under the EA? If this is so, why won’t it be more expedient to reorganize TCN/TSP to be better focused?” (Daily Trust)

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