Nigeria's power privatisation delayed to Q2 2012

Nigeria's power privatisation delayed to Q2 2012



Tuesday November 29, 2011 3:21pm

Nigeria's power sector privatisation will be completed by the second quarter of next year, the presidential task force said on Tuesday, later than previously promised as another key reform for Africa's most populous nation is delayed.

Nigeria holds the world's seventh largest gas reserves and is Africa's largest crude oil exporter but only produces enough electricity to power a medium-sized European city.

President Goodluck Jonathan unveiled power privatisation plans 15 months ago and it was pledged that state power generation and distribution assets would be sold off this year.

Jonathan has set out a 'transformation agenda' for Nigeria but plans to end fuel subsidies and reforms to the mainstay energy sector are locked in parliamentary dispute, while a sovereign wealth fund and next year's budget are delayed.

Power ministry officials said in June that four thermal and two hydro power plants and 11 electricity distribution firms would be sold by the first quarter of next year but this has been shifted back again.

"Nigeria expects to complete privatization of power sector by Q2 2012," Azu Obiaya, head of the regulation and transactions in the presidential task force on power, said at an industry conference in the commercial-hub Lagos.

He said Nigeria was hoping to produce 6,000 megawatts of power by the end of next year, up from the current 4,000 but still only scratching the surface of the 40,000 megawatts needed for a nation of around 150 million people.

Decades of Nigerian administrations have cashed-in on crude exports rather than investing in plants to refine fuel or developing gas for domestic consumption, which means diesel has to be imported at a huge cost for private generators.

Nigeria estimates it will need $10 billion a year of investment over the next decade to meet its energy needs.



Source: Reuters (Reporting by Chijioke Ohuocha)


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