₦airaland Forum

Being the first state to attempt to break the monopoly of the defunct National Electric Power Authority (NEPA), with the initiation of the Enron Power Project on August 1, 1999, coupled with the recent inauguration of a transformer manufacturing factory, Lagos State has maintained its pioneering role in power projects in Nigeria, Ejiofor Alike, writes

Enron Experiment
At the peak of the abysmal performance of the defunct National Electric Power Authority (NEPA), now Power Holding Company of Nigeria(PHCN), Lagos State under the then Governor, Asiwaju Bola Ahmed Tinubu, became the first state to attempt to break the monopoly of the ailing power giant by initiating a giant Independent Power Project(IPP).
On August 1, 1999, the Tinubu-led administration, Yinka Folawiyo Power Limited and Enron Corporation of the United States signed an agreement for an IPP, with the Federal Government as the guarantor.
The barge-mounted electricity generating plant was to be located adjacent to the NEPA’s Egbin Power Station, Nigeria’s biggest power plant.

The generating facility was originally designed to consist of nine barge-mounted combustion turbines with a total net output of 290megawatts of electricity.
The total investment in the business was estimated at $225 million with Enron controlling the majority shares, while Yinka Folawiyo Power Limited, a Nigerian conglomerate, owns the remaining shares in the venture.
By the terms of the agreement as presented by Lagos State, Enron was to generate the power and feed it into the National Grid, with NEPA as the operator that was to receive, transmit and distribute the power, while the State would designate destinations for power supply and market it to consumers.

The state was also to generate bills and pay the accrued revenue into an escrow account from which Enron could draw; while the Federal Government would provide project support, being the guarantor.
However, in January 2001, the AES Corporation announced that its subsidiary had acquired from Enron, a majority interest in the barge-mounted IPP.
AES, a leading global power company has generation, distribution and transmission infrastructure in Georgia, Hungary, India, Kazakhstan, the Netherlands, Mexico, Pakistan, Panama, Sri Lanka, the United Kingdom, the United States and Venezuela, Argentina, Australia, Bangladesh, Brazil, Canada, Chile, China, Colombia, Dominican Republic and El Salvador,
At the time of acquisition by AES, the barges were still under construction and commencement of commercial operations of the power facility was expected in September 2001.

AES was both manager of construction and plant operator; while electricity from the plant was to be supplied to NEPA under a 13.25 year power purchase agreement.
However, since inception, the project was mired in controversy as the state, NEPA and the Federal Government clashed over the implementation of the agreement.
The controversy peaked when Lagos State took the PHCN to the then Dr. Ransom Owan-led board of the Nigerian Electricity Regulatory Commission (NERC), over allegation of breach of supply agreement and wrongful invoicing of the state.
Lagos State had said in the petition to NERC that it had agreed to contribute 21.15 per cent of the Barge Power Purchase Agreement (BPPA) monthly bills on the condition that the power being generated by AES/Enron would be supplied solely to Lagos State.

According to the state government, further to the Contribution Agreement, on 14th November, 2000, it instructed the Federal Ministry of Finance to effect a direct debit of its statutory allocations from the Federation Account for the amount due as its contribution, to the capacity payments.
The state however, said that the instruction was to serve only as further security for payment of its obligations, under the BPPA and could only be effected if it failed to pay a valid invoice.
“In June 2001, the IPP began commercial operations and NEPA began to purchase capacity and energy under the BPPA.
‘However, in clear breach of the BPPA and the spirit of the Contribution Agreement, NEPA failed and or refused to devote any or all of the electrical output of the IPP to customers in the areas designated in the BPPA submitted for its contribution by NEPA,” the state said.

Lagos State also stated that despite the breach of agreement, the Federal Ministry of Finance had continued to deduct its 21.15 per cent contribution from source.
All these show that there is no doubt about the viability and feasibility of the IPP project as envisaged by all the partners, including the Lagos State Government.
The project was viable, feasible and was delivered to meet not only specifications but also international standard.
Today, the AES project is supplying close to 230megawatts to the Egbin Thermal Station, from where the power is feed into the National Grid.

With this additional supply from AES, the total output from Egbin averages 800megawatts when gas is available.
The only issue under contentionwas that the power generated from AES was being transmitted to the National Grid for the use of the entire country, instead of only Lagos and this bordered on alleged failure by parties to honour contractual and business obligations.
Despite the controversy surrounding the Enron power project, the Federal Government still joined Lagos State to see the wisdom in breaking the monopoly of PHCN, hence the massive construction of power plants across the country and the planned privatisation of the ailing utility giant.

http://www.thisdaylive.com/articles/pioneering-role-of-lagos-in-power-projects/75222/

Liair lie muhammad.

He Tinubu performed during his time.

Who cares since GEJ is winning the election I care less.

wakacome:
My son you are not making sense...

Darkness can and will be banish within 2 years of a western region or an independent nation of the yorubas.
Only the uninformed will fail to appreciate the amount of damage the Nigerian state is doing to the SW.
For most part of the country, the darkness is an improvement over their state prior to independence.
For the SW, the state of affairs is simply retrogression.
We have never had it this bad after being held back.

slimfit1:
He Tinubu performed during his time.

tinubu is a world record holder in performance!
tinubu perform pass dbanj and ebenzer obey

lol

tit:
tinubu is a world record holder in performance!
tinubu perform pass dbanj and ebenzer obey

This should be a throwback topic. Very informative.

Attn: Mynd44, Seun.

Being the first state to attempt to break the monopoly of the defunct National Electric Power Authority (NEPA), with the initiation of the Enron Power Project on August 1, 1999, coupled with the recent inauguration of a transformer manufacturing factory, Lagos State has maintained its pioneering role in power projects in Nigeria, Ejiofor Alike, writes

Enron Experiment
At the peak of the abysmal performance of the defunct National Electric Power Authority (NEPA), now Power Holding Company of Nigeria(PHCN), Lagos State under the then Governor, Asiwaju Bola Ahmed Tinubu, became the first state to attempt to break the monopoly of the ailing power giant by initiating a giant Independent Power Project(IPP).
On August 1, 1999, the Tinubu-led administration, Yinka Folawiyo Power Limited and Enron Corporation of the United States signed an agreement for an IPP, with the Federal Government as the guarantor.
The barge-mounted electricity generating plant was to be located adjacent to the NEPA’s Egbin Power Station, Nigeria’s biggest power plant.

The generating facility was originally designed to consist of nine barge-mounted combustion turbines with a total net output of 290megawatts of electricity...


“...In June 2001, the IPP began commercial operations and NEPA began to purchase capacity and energy under the BPPA.
‘However, in clear breach of the BPPA and the spirit of the Contribution Agreement, NEPA failed and or refused to devote any or all of the electrical output of the IPP to customers in the areas designated in the BPPA submitted for its contribution by NEPA,” the state said.

Very impressed that this project began operations less than 2years from when it was initiated.

The current Power Minister employed by the same Bola Tinubu who achieved this as Governor, should employ this model all over the country.

The post is an insightful read.

It's not too late is it, if he really did care Lagos should have there power back now in the sense that tho

well

Throwback:
This should be a throwback topic. Very informative.

Attn: Mynd44, Seun.

Let's hope they do...but then...

Lagos State should be compensated for the power generated and supplied to the national grid over the years.

Great article! Lagos State will always lead in every developmental stride.
God bless Lagos State and the Federal Republic of Nigeria.