POWER THROUGH

Nigeria 2016 | ENERGY | INTERVIEW

TBY talks to Oladele Amoda, Managing Director & CEO of Eko Electricity Distribution Company, on the state of the distribution sector and future prospects.

 Oladele Amoda
BIOGRAPHY
Oladele Amoda obtained a Bachelor’s degree in Electrical Engineering from Memphis State University in the State of Tennessee, an MBA from the University of Science & Technology, Enugu, and an MSc in Electrical/Electronic Engineering from the University of Lagos, Akoka in 2002. He joined the PHCN, the National Electric Power Authority, and was later posted to Akure District as Planning Engineer. He was promoted to the position of Assistant and later Head General Manager, Technical Services, a position he held up till August 2011, when he was appointed as CEO of Eko Distribution Company.

Eko was privatized along with the rest of the distribution sector in 2013. What has changed since the company was privatized?

When we took over in 2013, the network was dilapidated due to inadequate investment. Up to that point, the sector was under government control, and had not seen the investment it required for over 30 years. When we took over, we had to evaluate the network and assets that we purchased as prior to privatization, investors had lacked this opportunity. Our evaluation was in essence like a black box, revealing the poor condition of existing infrastructure. We quickly raised $250 million to ramp up the existing network to such that we could distribute electricity to our customers. When we looked at the total customer outlay, it turned out that 50% lacked meters, and among the other 50%, meters were obsolete, or not in working order. We are now investing in meters with a clear focus on the customer, who does not favor estimated billing. This year, Eko is spending over NGN20 billion on meters alone to replace the entire system for its 400,000 customers. We also have high-consuming industrial and commercial customers, numbering around 6,000-7,000. Those entities consume over 40% of our energy and, paying more, are the current focus of our metering efforts. We want to make sure that no one is cheating the other, and that everyone has a functional meter that they are comfortable with. This way, whatever bill we give our customers, they will be satisfied with.

How has gas supply affected your distribution efforts?

We are not getting enough power from the grid because of an inadequate gas supply to the generators, brought about because of vandalism to the gas pipeline, which has reduced the level of generation throughout the country. Also, the cost of gas for power generation is low compared with gas sold to the rest of the market. Gas suppliers naturally favor higher price bracket customers. The government has moved on this, having increased the cost of gas per unit. It is ready to supply gas if the pipelines are renovated. And as far as the grid is concerned, there is a sharing formula where everybody gets a percentage of what is generated. For instance, at Eko, we have 11% of whatever is generated on to the grid. What we require today is a minimum of 700MW. But we only receive on average 300MW, or even below 200MW. For a number of months we have received a daily allocation in the morning of not above 300MW. Our supply tends to dwindle in the afternoon, as there is insufficient gas for the generators. We allocate based on what is available to us, but Eko cannot continue to operate like this, and is seeking a complimentary source of power for its network. Now, we are encouraging private companies to set up generation plants, the output of which would be sold to us for addition to what is available on the existing grid. Such embedded power is not subject to grid intervention. We have been working on this for almost nine months now. A total of 43 companies have indicated a willingness to set up plants of various capacities and in assorted locations. These companies should provide an additional 400MW, though it will be gradual process as equipment needs to be received and installed. Currently, Eko has almost completed a bilateral power agreement with existing power plants that are not tied to direct agreements. We have almost concluded an agreement for an additional 100MW, which will probably materialize before June. Secondly, a further three companies have 40MW ready for supply once all MoUs are signed. In total this year we are looking at an extra 170MW.