FG Hands Off Power Sector Next Year

President Goodluck Jonathan said yesterday, in Abuja that the Federal Government would terminate investment in power generation and distribution as from 2011.

The President who made this known at the Presidential Retreat for power investors, said government also planned to concession the management of the Transmission Company of Nigeria.

He assured that the processes for the initiated hydro power projects would be completed before then.

The President said the decision was informed by government’s resolve to fully involve and attract the private sector in the business of power.

“With a population of more than 140 million people and the seventh largest deposits of natural gas, and a major fuel for power in the world, we are ready for business,” the President declared.

He noted that the ever-increasing budget on power would better be used to improve education and healthcare

The President said government was determined to attract high quality and world class investors with proven record to the evolving power supply industry.

“We need firms that can grow quickly. Our national interest dictates that we encourage investors who are willing to stand with us for the long term, not those without the requisite pedigree in the sector,” he said.

He assured the gathering that Nigeria “is a country with tens of millions of potential new power consumers.

“An opinion poll sponsored by the World Bank has confirmed that Nigerians are willing to pay for cost reflective tariffs for electricity.

“This is due to the fact that even some of the poorest Nigerians including artisans and small business people spend considerable amounts on petro-powered generators,” he said.

Jonathan noted that the situation where Nigeria “spends about $13billion every year, providing power from diesel generators, is unacceptable.

“Generating power from generators adds more than 40 percent to the cost of goods and services in Nigeria and this we can ill-afford.

“This administration is determined to implement the reform of Nigeria’s power sector in a way that Nigerians shall be proud of,” he said.

Minister of State for Power, Nuhu Wya who also spoke at the event noted that Nigeria required about $10 billion yearly in investment over the next few years to develop the generation, distribution and transmission capacities.

In his presentation, the Special Adviser on Power, Prof Barth Nnaji, said the Central Bank of Nigeria (CBN) had established a N300 billion fund that could be assessed by prospective investors in the power sector.

The Special Adviser said with the unbundling of PHCN, establishment of NERC and the launch of the roadmap to power sector reform, the coast was clear for private sector involvement.

He told prospective investors that fully cost-reflective tariffs would be introduced.