Nigeria Targets $20 Billion Over Three Years for Power Sector Reforms

---

Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--Bolanie Onagoruwa, Nigeria's director general of the bureau of public enterprises, has said that in order to maintain the progress of Nigeria's reform of the power sector, between $15 billion and $20 billion is required over the next three years to acquire and develop electricity assets.

The development program will include the acquisition and rehabilitation of six generation and 11 distribution companies following the planned privatization of state-owned Power Holding Company of Nigeria (PHCN). The plan will also involve the acquisition of 10 national independent power producer (IPP) plants with a total generating capacity of 4,770 megawatts (MW).

Related national independent transmission and gas distribution network assets will be acquired, in addition to related expanded distribution assets now being built with an investment of $8 billion by the three tiers of government from oil revenues.

The director general said that the lack of power and the country's inefficient power supply cost Nigeria 3% GDP growth per year. She was emphatic that the country could not allow power outages to stifle economic growth, saying that developing countries, including Nigeria, could not continue to depend on global multi-national and bilateral institutions to finance their power infrastructure. Replacement generation capacity would need to be financed by both domestic and international financial markets.

The core investor sale method adopted for the privatization of the distribution companies would see the bidding parameters based primarily on the use of quality of service efficiency parameters, considered against investment proposals made by bidders aimed at reducing aggregate technical, commercial and collection (ATC&C) losses over an agreed timeframe , Onagoruwa said.

Nigeria's Ministry of Power says it is confident that the privatization process will be completed by October of this year. This follows President Goodluck Jonathan's announcement of plans to sell off PHCN in 2010.

IIR Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities

For related information see March 13, 2012, article - Nigeria's Power Regulator Opens the Door for Independent Power Generation and Distribution and May 10, 2012, article - Nigeria Has 135,000-Megawatt Dream as Government Aligns Ministries.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.