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Govt eyes private sector for $100b regular power supply fund

By on March 23, 2011

THE Federal Government may have opted to seek partnership with private sector operators, for the revival of the nation’s power sector, as it could not fully fund the $100 billion (N15 trillion) required for the scheme to achieve a desired level within one decade.

Government also affirmed in a media statement signed by the Chairman, Communications Committee, Presidential Task Force on Power, Dr. Abimbola Agboluaje, made available to The Guardian yesterday, that $10 billion would be needed yearly for power generation, rehabilitation, upgrading of transmission and distribution networks, as well as supply of power feedstock like natural gas.

The statement affirmed that power generation alone would require $3.5 billion (N524 billion) yearly.

Consequently, the government has commenced a reach-out agenda to the private sector, to participate very actively in electricity development in the country, with the administration stressing that the Electric Power Sector Reform Act of 2005 and the Road Map have made the private sector a key partner in electricity supply.

Government also expressed confidence that the private sector will provide the funds, skills and technology needed to modernise Nigeria’s power sector and make it one of the best globally.

The statement added: “It is a well known fact that until recently, the Federal Government did not pay as much attention to the development of transmission and distribution networks and fuel-to-power infrastructure as it did to power generation.

“The result is that the other segments of the electricity supply chain have been in a poor state.  Yet, without all segments functioning very well, electricity cannot be delivered well to our homes, offices and industries.

“In August, last year, power generation peaked at an all-time high of 3,800 MW, but it lasted for a few hours on account of system collapse, as the transmission infrastructure was too weak, old and dilapidated to wheel the quantum of electricity produced from both thermal and hydro stations to areas of need because.

“We are happy to state that all segments of the power supply chain are now receiving due attention. For instance, President Jonathan has, among other things, approved the installation of the super grid transmission facility in the country, a development, which will see Nigeria’s transmission infrastructure compete with the very best in the world”.

It disclosed that despite the global economic crisis, as many as 331 companies across the world have expressed interest in buying into the six generation Power Holding Company of Nigeria (PHCN) successor companies and into the eleven distribution PHCN successor firms.

According to the government, Esser of India has pledged to invest $2 billion in our power sector as a demonstration of faith in the ongoing reform.

“We are all the more pleased that investor confidence in the power sector is at an all-time high, even though a general election will be held only a month away. The great confidence shows enormous faith in Nigeria’s democracy and stability”, it stated.

Source : Guardian