Nigeria Content Online

Investors in the
transmission grid of the power sector may receive support from a bond
to be issued by the federal government to guarantee their investment.

Bart Nnaji, special adviser to the president on power and chairman of
the presidential task force on power (PTFP) who said this at the power
investors’ conference organised by the Bureau for Public Enterprises
(BPE) in Lagos said the fund would take care of any apprehension by
investors.

“For transmission,
there will be a decline in investment but that decline will not be as
significant as you may think. Federal government still has to continue
to make investment but there will be largely private public sector.
There should be a fund established to deal with this. A kind of PPP
Fund and there will be an investment company to handle it.”

He said government
is leaving no one in doubt about its determination to attract private
sector investment in the power sector. “Government has decided it wants
to solve the problem in one go by looking at the entire value chain
from fuel supply, generation, transmission and distribution.”

He explained that
the idea is to enhance efficiency across all segment of the power
sector. “Our goal is to cut out corruption areas because distribution
is the headquarters of corruption.”

Abimbola Agboluaje,
head media and communications of the task force, said government will
opt for the concessioning of the transmission grid instead of outright
privatisation. This is to ensure that investments in other sectors of
the power chain are complemented.

“If transmission
grid is not strong enough to evacuate all the power that will be
generated, it may just be a waste of money. So the transmission fund is
to ensure enough fund is available for investment in the transmission
aspect of the sector.” He said such an arrangement may be funded
through a bond issuance.

Bolanle Onagoruwa,
director general of the BPE said privatisation and liberalisation of
the power sector is a key component of the power sector reforms. She
said the Nigeria Electricity Liability Management Company has been set
up to manage stranded liabilities, pension liabilities and other
liabilities of the Power Holding Company (PHCN) “The BPE has also
incorporated the Nigerian Bulk electricity Trading Company which is
saddled with the responsibility of bulk procurement and sale of power
in the sector and thus alleviate the fears of prospective power
investors.”

She said government
is seeking investors in 11 distribution companies, four thermal
stations, and two hydro stations. “The privatisation of the power
utilities is unique and different from previous privatisation
programmes in the country in that it is driven by the need for
efficiency and investment rather than optimization of proceeds to
government.”

The 11 distribution
companies are located in Abuja, Benin, Enugu, Eko, Ibadan, Ikeja, and
Port Harcourt, Jos, Kaduna, Kano, and Yola. The thermal power stations
are Ughelli Power Plc and Sapele Power Plc both in Delta State, Afam
Power Plc, in Rivers state and Geregu Power Plc in Kogi State, while
the hydro power companies, for which concessionaires are sought, are
Kainji Power Plc comprising power stations in Niger and Kwara States
and Shiroro Power Plc, also in Niger State.