A Review of the Nigerian Energy Industry

Power: FG shifts focus to impact of reform on Nigerians

Professor Chinedu Nebo

Oscarline Onwuemenyi 19 March 2014, Sweetcrude, Abuja – After successfully handing over most parts of the power sector to private investors, the Federal Government says its focus has now shifted to ensuring that Nigerians feel the impact of the sector’s reform.

Minister of Power, Chinedu Nebo who disclosed this at the opening of Nigeria Power Conference in Abuja said the reform of the sector was meant to act as catalyst for economic growth.

According to Nebo, the major aim of the reform of the power sector is to “move the country towards industrialization, create more jobs, result in higher GDP, increase household income and improve standard of living and improve youth development and social security. These are some of the intended benefits of the power sector reform.”

He added that, “The privatization of the PHCN legacy assets is over and that of the NIPP assets is at an advance stage. The main task now is to ensure that the impact of the privatization is felt in homes and businesses all across the country. 

“Clearly, we have moved aggressively to fully implement the roadmap on power. The early signs of improvement have been acknowledged but are not yet evenly felt.”

Also speaking at the conference, Direct General, Bureau for Public Enterprises (BPE), Benjamin Dikki explained that government retained the ownership of the Transmission Company Nigeria (TCN) to reduce the cost of transmission charge on the electricity tariff.

Dikki however stressed that ultimately government would concession TCN when power generation has drastically improved.

Dikki noted that due to the huge investment required for the transmission sub-sector and the long payback period it does not make economic sense to privatise transmission.

He added that the transmission challenge is also compounded by the problem of right of way, pointing out that it is easier for government to acquire right of way transmission lines.

He noted that the wheeling tariff that would cover the transmission cost would raise the cost of electricity tariff and not be economical now.

“The World Bank is supporting and the African Development Bank is also financing, and a lot of these initiatives are being taken in order to provide the requisite financing to upgrade the standard of transmission facilities TCN has.

“The ultimate objective is that when we increased power supply, maybe 40,000mw, then it will make economic sense to grant a concession for TCN, to concession out TCN, knowing that the wheeling charge on the tariff will be able to sustain it and able to financing for re-investment.

“In the short term TCN will remain in government hands but ultimately it will go into private hands,” he added.


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