Thailand's Rainbow Power Consortium Proposes $2 Billion Investment in Response to Nigeria's Power Collapse

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Researched by Industrial Info Resources (Sugar Land, Texas)--At a time when Nigeria's power generation capacity has collapsed to 1,000 megawatts (MW) from an already paltry 3,000 MW, there appears to be an increase in interest from international firms to begin power projects in the country, at the same time gaining access to Nigeria's abundant energy resources. For related information, see July 22, 2008, article - China and India to Build Refinery in Nigeria.

Rainbow Power Limited (Bangkok, Thailand), a consortium made of companies Rainbow Energy Limited, PTT Public Company Limited (BAK:PTT) (Bangkok) and Transglobal Energy Funds (Singapore) has proposed a $2 billion investment, depending on federal government approval, into the power, gas, petrochemical and agriculture sectors of the country's economy.

The timing could be good as the government is planning major investment initiatives to meet the emergency in the power sector. Once again, the Nigerian power system and economy needs rescuing from chronic collapse and debilitating corruption. For related information, see February 25, 2008, article - Nigerian President Orders Committee to Deliver 6,000 MW.

The consortium has planned the construction of three new power stations with a total generation capacity of 1,000 MW. If approvals are given that allow construction to start immediately, the group has promised to deliver the projects within two years and thus fill 10% of government's targeted 10,000 MW of new operational capacity. The power plants are planned for Ajaokuta (500 MW), Abuja and Kano (250 MW each).

Rainbow Power Limited would benefit by being able to acquire 20% of Nigeria National Petroleum Corporation's (NNPC) (Abuja) shares in Brass LNG (Lagos), the Nigerian liquefied natural gas producer and supplier, as well as a minimum of 20% of Brass LNG's production to help provide for Thailand's gas needs. Currently NNPC holds 49% of Brass LNG, while ConocoPhillips (NYSE:COP) (Houston, Texas), ENI (NYSE:E) (Milan, Italy) and Total (NYSE:TOT) (Paris, France) hold 17% each.

Beyond the gas trade deal, Rainbow would invest in Nigeria's petrochemical sector and would construct a petrochemical plant using natural gas feedstock from Brass LNG. The captive power plant would supply power to the local community. Rainbow aims to generate revenue for the federal government, assist in energy transfer and create jobs.

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