GE Signs $10 Billion Agreement for 10,000-Megawatt Power Build in Nigeria

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--At a time when more frequent power outages are being experienced in Nigeria's commercial capital Lagos and in other areas of the country, GE Energy (NYSE:GE) (Fairfield, Connecticut) has signed a $10 billion agreement with the Nigerian ministry of power for a program to build up a power capacity of 10,000 megawatts (MW). For related information, see February 22, 2012, article - GE's Immelt Leads Charge as U.S. Initiates Major Investments in Nigeria.

At the signing of a memorandum of understanding with GE in London on Sunday, Minister of Power Professor Barth Nnaji said that GE would now be an equity participant in the overall project.

"In the past, GE only supplied the equipment, but now they will be investing 10% to 15% in equity in every single project," Nnaji said. "The government will match them in such investment while the private sector will bring in the balance."

He said that the government would tap a small percentage of the national pension fund to finance the power projects, as the power plan was a more secure type of investment.

The News Agency of Nigeria (NAN) reported industrial, commercial and domestic electricity consumers had complained of more frequent outages in the past three weeks, with residents in the Lagos metropolis reporting a daily supply source of less than three hours at the Egbin power station in Lagos. Lagos accounts for 40% of the national power demand.

A source at the Egbin power station at Ikorodu in Lagos told NAN that generation at the plant had dropped from 900 MW to 500 MW, due to rehabilitation work at the Kanji Dam in Niger. The CEO of the power station refuted this information, saying that generation stood at 1,080 MW and that five of the six units were working at full capacity.

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