Government, Ministry of Power, Photo, TCN

TCN MD Clarifies $1.5B Foreign Loan to Expand National Grid

Posted: October 30, 2017 at 12:09 pm   /   by   /   comments (0)

The Managing Director/ CEO of TCN, Mr Usman Gur Mohammed has clarified the status and composition of the $1.5 billion multilateral donors loan which TCN plans to obtain from the World Bank, Islamic Development Bank, African Development Bank (AfDB) and three others for the National Grid network expansion.

He said that the National Assembly may have misunderstood the composition and process of getting the loan, adding that it was yet to get it and would not have done that without the approval of the Federal government through the ministry of finance.

According to Mohammed, “When we came in, we had to assess TCN and see what we can do to make it an organisation that can meet its objectives of wheeling power across the nation, and stabilise the grid with quality power. In doing that, we had to come up with a program – the Nigerian Transmission Rehabilitation and Expansion Programme. “
The program, the MD said, seeks to expand the capacity of the transmission to the ‘N minus 1’ reliability capacity which means that anywhere you have a unit, it should be times two, and if there is a failure, the people using that unit should not be affected.

“There are various ways the TCN can raise money, either through the wheeling charges, contractor financing, and multilateral donors, but the two first options are not there for the TCN because what we are getting from the market is less than 40 per cent of our invoice and barely enough to pay salaries and do operations. Even the contractor financing is not right because revenues have to be set aside to be able to meet your obligations when they crystallise,” he said.

Mohammed further explained: “So, the only option we had was to meet the government to support us in getting multilateral donor finance and we presented our program to the donors which is the cheapest money we could find. Every multilateral donor has a moratorium period you cannot get from anywhere, and they will always require you to put some things in place.

“One of the things they asked us was the issue of our failure to implement projects in the past and we have to address that. One of the reasons we have been failing in implementing projects in the past is our inability to recruit contractors that are qualified, and they came up to say we must recruit contractors that are qualified to weed out unqualified contractors and we agreed.

We plan to have $486 million from the World Bank, $210 million from Islamic Development Bank, we have $454 million from AFD, $200 million from JICA, and $200 from African Development Bank.

“And this is how it is, the agreement we have with them is that we can prepare the projects and implementation at the same time, and this sent a wrong signal to people that we have signed and taken the loan. For anybody to say the TCN has taken loan, it is because the person is ignorant of the law. By law, we cannot even take loan without the consent of the ministry of finance, and no multilateral donor will talk to you because they know it is illegal.

“We have provided a regime of transparency in the TCN, I am not afraid, anybody can come and probe me, we have come to make history in TCN. We have not come to do wrong things but to create history.”

The TCN MD, Usman Mohammed made the above clarification in the speech he presented during the commissioning of two transmission infrastructure – a 40 mega volts amp (MVA) 132/33 kV mobile substation in Zaria, and 60MVA 132/33 kV transformer in Funtua built by the TCN and inaugurated by the Minister of State 1, Power, Works and Housing, Mr. Mr Shehuri.

Comments (0)

write a comment

Comment
Name E-mail Website

comments ( 0 )