The Transmission Company of Nigeria (TCN) has signed an agreement with a consortium of Chinese companies to secure financing required for projects that will enhance the national grid, the TCN head, Sule Abdul-Aziz, said.
During a panel session at the Middle-East Energy Conference in Dubai on Tuesday, Abdul-Aziz said securing funding to complete over 100 ongoing transmission projects, including building transmission lines and sub-stations, has been difficult.
“But now there are companies coming to us with PPA, we signed MOUs and agreements with some of them so that they can do some of these projects”, he stated, adding that, “They will be earning from it until they have recovered all their money, then the assets belong to the TCN”.
The TCN boss said the three funding sources – budgetary expenditure, donor funding from multi-lateral organisations including the World Bank and the African Development Bank, and through the TCN’s own internally generated revenue – were insufficient to meet the financing required to fund ongoing transmission projects.
Abdul-Aziz told newsmen he was unable to disclose the specific details of the deals after his presentation but a search in foreign business press showed that TCN selected a handful of Chinese firms with recent ones being bids for $155 million network extension last April.
The Chinese consortium, made up of Xian Electric Engineering Co. Ltd/Sumec Complete Equipment & Engineering and North China Power Engineering Ltd., was awarded the contract for the construction of high-voltage (330 kV) transmission lines for the Nigeria Transmission Expansion Project 1.
China, Nigeria’s biggest bi-lateral creditor, is reported to be scaling-back lending in Africa amid its worsening growth challenges.
Nigeria’s external debt owed to China accounts for 83.57% of its total bilateral debt as of June 30, 2022, totalling $3.9 billion, a 12.7% increase from $3.5 billion in the same period last year, according to data from the Debt Management Office, (DMO).
