BPE: Nigeria Needs $20bn for Stable Electricity

The Director-General of Bureau of Public Enterprises (BPE), Ms. Bolanle Onagoruwa, has said the country would require power sector investment worth between $15 billion and $20 billion in the next three years in order to have stable electricity.

She said the figure would help to acquire and rehabilitate six generation and 11 distribution successor companies, acquire 10 National Independent Power Plant (NIPP) generation plants (4,770 MW of new capacity), procure related NIPP transmission and gas distribution network assets, as well as related expanded distribution asset being built at a cost of $8 billion by the three tiers of government from oil revenues.

Speaking in Lagos at a breakfast session of the American Business Council on “Investment Opportunities and Current Status of Privatisation in the Power Sector”, Onagoruwa said lack of power or inefficient power supply cost Nigeria three per cent GDP growth per annum, stressing that the country could not allow power outages to stifle economic growth.

The BPE boss, in a statement signed by the bureau’s spokesman, Chukwuma Nwokoh, urged the country to choose “technologies that are proven, reliable and that will be cost-effective,” adding that “while acquisition costs for the Power Holding Company of Nigeria (PHCN) successor companies may be equity-based, investors will require access to long term financing in order to refinance to raise funds for further investments; invest in major rehabilitation; and capital for the Greenfield IPPs (Independent Power Plants).”

Onagoruwa said developing countries including Nigeria cannot continue to depend on global multi-national and bilateral institutions to finance their power infrastructure, stating that replacement generation capacity would need to be financed by both domestic and international financial markets.

Commenting on the core investor sale method adopted for the privatisation of the distribution companies, she said the bidding parameters would be based primarily on “the use of quality of service/efficiency parameters considered against investment proposals made by bidders aimed at reducing Aggregate Technical, Commercial and Collection (ATC&C) losses over an agreed time frame.”