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FG gets $20bn offer for power transmission assets

By BusinessNews Staff on September 17, 2014

The Federal Government is considering offers of more than $20bn for the assets of the Transmission Company of Nigeria as the provision of adequate power continues to pose a challenge.

The sale of the TCN may start “in a few years,” the Minister of Power, Prof. Chinedu Nebo, was quoted as saying in an interview with Bloomberg Television Africa in Abuja.

The government will also focus on developing renewable energy projects to diversify its supply of electricity, he said.

“The interest now for transmission is over $20bn,” he said, adding, “People are coming from everywhere.”

Transmission is the only segment of the power industry that the government still controls as it seeks to curb regular blackouts in the country. Nigeria generates about a tenth of the power that South Africa does even though its population of about 170 million is more than three times larger.

The government is spending $3.5bn to boost the transmission capacity by 50 per cent. Fifteen state-owned generation and distribution companies were sold last year to raise funds.

The current transmission capacity of the TCN is 5,500 megawatts compared with an installed generation capacity of 8,000MW, Nebo said.

This means that if generation companies were operating at full capacity, the grid would be unable to transmit all of the power to homes. The government wants the transmission capacity to exceed 6,000MW by 2016, Nebo said.

Power generation is significantly lower than capacity, partially due to problems of transporting gas to power plants. Many companies and individuals are compelled to use diesel-powered generators to ensure adequate electricity.

“Gas supply has been a limiting factor,” said Nebo, who is working with Minister of Petroleum Resources, Diezani Alison-Madueke, to make enough gas available to the generation companies to match the transmission capacity by the end of next year.

“Nigeria is moving in the direction of trying to have a robust energy mix,” Nebo said.

Coal is another resource that could generate 3,000MW to 5,000MW of power “in the next several years” after government reclaims unused coal blocks, the minister added.

“We are working on making sure those coal blocks are taken away from those who have refused to develop them over the decades and are given to those who can actually develop them,” he said.

[Punch]

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