Nigeria's Power Targets Slip While Waiting for Plant Privatization to Start

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--The last target that Nigeria's Power Ministry set for itself was to have a supply of 5,000 megawatts (MW) available to the national grid by the end of this year. This is a very modest target for a country of 150 million people, as it was revised downward from 6,000 MW. The medium- to long-term plan is to provide 40,000 MW.

The 600 MW scheduled to come on to the grid from the Shiroro hydropower project by the end of December will at least bring the total power available to nearly 5,000 MW, when other target periods have seen totals go into reverse or end up obscured by grandiose promises. The extra 600 MW will be the result of the overhaul of a previously abandoned unit.

But a plan to move forward on the privatization of state-owned Power Holding Company of Nigeria (PHCN) is experiencing schedule slippage. The plan was covered in the 2005 Electric Power Sector Reform Act.

In June this year, officials from the ministry said that four thermal power stations and two hydropower plants would be sold by the first quarter of 2012, but this schedule stalled again. There also were 11 power distribution companies to be offered and sold by the first quarter of 2012.

President Goodluck Jonathan said in 2010 that the power stations and distribution companies would be sold off this year and interested parties, local and international, started to jockey for position to acquire these assets. But disputes in parliament over the abolition of fuel subsidies to allow for commercial pricing and viable projects have delayed decisions and budgets. For related information, see August 31, 2010, article - Nigeria Considers Broad Privatization to Solve Power Supply Crisis, and November 8, 2011, article - Companies from Canada, U.S. and France Target Reforming Nigerian Power Industry.

Bartholomew Nnaji, the power minister, has said that the process of transferring the government equity in 17 out of the proposed 18 PHCN successor companies to core investors, PHCN workers and state governments would be completed in early 2012.

There has been movement in proposals for new power plants and project development alliances in 2012. No major and sustained new project thrust will be possible to execute until the privatization process is effectively under way.

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