Nigeria appeals for private power funding

• 12 years ago (2011-08-18)
• Junior Isles

Africa 303 Middle East 310

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Nigeria will require a regular capital investment of NGN520 billion ($3.4 billion) to increase its electricity generating capacity from the current level of 4.2GW to 13GW by 2013, according to Nigerian Minister of Power, Prof Bart Nnaji.

He said investment on this scale could not be left to the government alone, given its size and the competing investment needs across the country.

He added that although Nigeria is the third-largest power producer in Africa, after South Africa and Egypt, with 5.96 GW of power generation, much work remains to be done.

Nnaji confirmed that the continuing effort to privatise the sector hinged on the need to foster a structure that enabled the power sector to perpetuate its own continued growth. Currently, the private sector accounts for a 30 per cent share in national power generation.

The ministry’'s plans for improvement include: installation of off-grid generation for remote communities, establishing a transmission network development fund and proposed power allocations to major cities and industrial cities.

Nnaji said the private sector would need to invest in these projects. “Over 80 per cent of the ministry’s operational cost goes into payment of staff salaries and welfare for Power Holding Company of Nigeria (PHCN)., there is therefore the new drive to attract investment in the sector, have a cost reflective tariff, and privatise because the capital needed is enormous and government cannot fund even a fraction of necessary investments. The sector requires a complex series of inter-locking reform interventions,”, he said.