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» 22.04.2010 - Nigeria pins budget performance on oil truce
» 23.02.2010 - Nigeria appeals for power back-up
» 08.02.2010 - Nigeria approves hydro power plant
» 13.01.2010 - Giant Shell workers abducted in Niger Delta
» 15.12.2009 - Local NGO denounces deregulation law
» 08.12.2009 - Union strike could leave fuel stations empty
» 19.10.2009 - Nigeria plans to offer stake to Delta residents
» 14.10.2009 - Senate endorses oil deregulation policy

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Economy - Development

Nigerian electricity utility "needs US$ 3.4 billion"

afrol News, 8 June - Nigeria's Minister of Power and Steel, Liyel Imoke, has said that the National Electric Power Authority (NEPA) will require a sum of naira 450 billion (euro 2.8 billion) in the next 5 years "in order to meet the nations demand and sustainability." NEPA is currently being prepared for privatisation, but faces difficulties finding investors without large state investments.

Minister Imoke, during a presentation Abuja, gave a breakdown of NEPA's needs, where transmission alone would account for naira 245 billion (euro 1.51 billion), generation was expected to gulp naira 115 billion (euro 713 million) and distribution, naira 90 billion (euro 558 million) during the next five years.

The presentation on NEPA's Multi Year Tariff Order (MYTO) was presided over by Nigerian President Olusegun Obasanjo, while Vice President Atiku Abubakar and the new Minister appointed to assist in the Ministry of Power and Steel, Professor Babalola Borishade, among others, were in attendance, according to a press release from the Nigerian government.

During interventions at the presentation, President Obasanjo had "expressed concern at the high losses being incurred by NEPA due to unpaid bills and non-billing of some of NEPA's consumers," the government release said.

Assessing the performance of NEPA, the Nigerian President pointed out that non-technical and bill collection losses of over 40 percent was "too high and unacceptable," and thus challenged the Minister of Power and Steel to improve the situation adding, that "government could no longer continue to subsidise the power sector."

He noted that there had to be a complete change of attitude and orientation amongst NEPA staff for the parastatals to meet the needs of Nigeria. President Obasanjo added that it was imperative for NEPA staff to imbibe the ethics of service delivery and customer friendly actions such as the notification of load-shedding, before carrying out such exercises.

The Nigerian government several years ago singled out the national electricity utility for privatisation. The entire process of privatising Nigeria's parastatals has however been slow and NEPA is one of the companies that have been most troublesome to prepare for private ownership.

As the giant parastatal is operating with great losses, Nigerian authorities find it difficult to achieve a private takeover of NEPA. Large government investments and a commercialisation of NEPA's business conduct will have to be made before private investors become interested. This includes introducing higher electricity rates, cutting supply to non-payers and cracking down on illegal electricity tapping - as has been done by equal state companies in most of Africa.

While Power and Steel Minister Imoke now has presented the costs of such a restoration of NEPA to his colleagues in government, he however also rushed to attract new foreign investors to the energy sector. As a result of shortfall in electricity generation, the government has decided to increase production significantly by 2007 and is looking for private investors to meet this goal.

Minister Imoke this week met with the Pakistani ambassador to Nigeria, telling him that the energy sector here had a lot of investment opportunities. The Minister said he expected Pakistani investors to be part of the efforts to meet the 2007 energy production target.

Already, NEPA is working out an arrangement for a Pakistani firm to build a 1000 Megawatts thermal plant in Anambra State in south-eastern Nigeria in two phases. Although gas is available in Anambra State it is yet to be processed.

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