A Review of the Nigerian Energy Industry

Nigeria’s power privatisation to end in third quarter

Clara Nwachukwu

23 February 2012, Sweetcrude, ABUJA — The ongoing privatisation of Nigeria’s power sector, which has been on the table of the Bureau of Public Entreprises (BPE) for more than a decade, will be completed by the end of the third quarter, Minister of Power, Prof. Bart Nnaji, has said.

Nnaji, who spoke on the state of the nation’s power sector at the Nigeria Oil and Gas (NOG) international conference and exhibitions in Abuja, said on Wednesday that the sale of Federal Government’s assets in the sector might be delayed for another two months due to outstanding issues.

He said: “The privatisation programme is going on very well, we are experiencing a few delays … so we will have two months or so delay in the process, which we expect to be completed by the end of the third quarter, or at the latest, the beginning of the fourth quarter.”

The minister, responding on the row with labour over some outstanding issues, which have contributed in delaying the process, noted that while the existing workers would not be fired immediately, “because every power facility needs experienced hands,” they will, however, be placed under temporary employments for the period of the transition.

He said: “The workers will be paid off and given temporary employment for a period of six to nine months during the transition period, so that the new owners will have the liberty to appoint their own workers. So, those who prove themselves will be given permanent employment by the new investors.”

With regard to criticisms that the power sector has not grown as appreciably as expected in view of the enormous money pumped into it since the return of democracy in Nigeria, Nnaji said under the current administration, much has been done to grow it.

According to him, “it is on record that generation capacity has not grown up to 4000 mega watts since the history of Nigeria, and we have achieved it.

“However, gas has remained a major impediment because we are told that it takes time to gather gas and develop the necessary infrastructure, so we need serious investments in gas.”

He anticipates that most of the issues surrounding availability of gas will be resolved by March, or April at the most, as issues with transmission and gas supply are being pursued at the executive level vigorously.

He said the sector has received a lot of expressions of interest even from unexpected quarters because of the ongoing reforms in the industry, adding that the submission of bids is expected to end by July.

Admitting to the gas issues, Executive Director, Gas Development, Nigerian National Petroleum Corporation (NNPC), Dr. David Ige, said year 2012 will be the toughest for the power industry in terms of gas supply. “2012 will be one of the toughest periods in the power sector in terms of gas to power.”

Ige, who spoke on the gas development in Nigeria, in reference to the Gas Master Plan, and the gas-to-power policy, said the Federal Government has adopted a short, medium and long term approaches to deal with the gas supply issues over the next four years, ending by 2015.

He said that part of the plan is to reinforce excessive gas supply from the Eastern network, and taken to the western region that is in short supply to close up shortages to the power plants.

He estimated that about 1,500MW of power is stranded on account of gas suppy shortages, adding that in the short term, government planned to stabilize supply from the existing facilities within the next four weeks.

In the medium term, he said government planned to expedite actions on the East west gas pipeline, which he hoped would be completed by 2013. While in the long term, by 2015 and beyond, as more gas fields come on stream, government would have “created a platform for a market-led unhindered power growth,” given that many gas infrastructure contracts have been awarded to facilitate set objectives.

In view of the scepticism over the workability of the Gas Master Plan, Ige asserted, “We have a credible and implementable plan, which will become obvious over time.”

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  • Jones

    Privatising the power sector to me is a good idea. But the next question is those that will handle it are they really competent? because Nigeria is a large country that have demand for light before thinking of other things. PMS AND POWER IS WHAT NIGERIANS NEED MOST AND AS A GOOD GOVERNANCE YOU MUST MAKE SURE YOU SACTIFER THE PEOPLE DEMAND. Also government should be ready to creat another medium of employment for the workers because out of 100 they meant take 60 and the rest 40 will be unemploy.