A Review of the Nigerian Energy Industry

$10bn investment is needed to double power generation in Nigeria – Nebo

Prof Chinedu Nebo29 April 2014, Abuja –  The Minister of Power, Prof. Chinedu Nebo, said close to 10 billion dollars about N1.6 trillion investment was needed to double the power generation capacity of the country.

Nebo disclosed this when he made a presentation to the National Conference Committee on Energy in Abuja on Tuesday.

He also noted that Nigeria needed over 300 billion dollars investment in the power sector for it to meet the power generation of South Africa.

The minister said that South Africa which was a little more than one-quarter of the population of Nigeria was generating 10 times power than Nigeria.

“The implication is that South Africa is generating per capita, 40 times what Nigeria is generating.

“If Nigeria were to be at par with South Africa we should be generating 160,000 megawatts, no doubt about that.

“We must note that if that were to happen in Nigeria, the minimum that government will need to put in place would be over US$300 billion and no government on earth can do that.“Even to double our capacity, in generation alone, the minimum investment needed to double our capacity as at today is close to $10 billion.

“On transmission infrastructure and the distribution infrastructure, Nigeria has to devote about 100 per cent of its annual budget to power alone and yet not meet the target,’’ Nebo said.

He said that the current administration under its transformation agenda had embarked on several efforts, including the privatisation of PHCN, to transform the standards of living of Nigerians.

He said that was the reason government invited private investors to invest in the sector.

Nebo said that the installed capacity as at now was 9, 920 megawatts, available capacity was 6,000MW while the average energy delivered was 80,500 MWH.

“For transmission capacity, we have nominal capacity of 6,870MW with a real capacity of closer to 4,500 MW, while the technical losses we experience is in the rage of 12 per cent.

“For distribution capacity, we have a nominal distribution capacity of 7, 325 MW,” Nebo said.

The minister said hopefully by the end of year 2014 Nigeria would have significant improvement in the power sector.

By the end of 2015 we are hoping for even better improvement. “But that is the only beginning to get close to what we need to re-energise Nigeria’s economy,” he said.

He said that government was over hauling the major hydropower supply source in the country.

He added that in regards to solar and wind, government was moving toward development of renewable energy.

The minister, however, identified vandalism of power and gas infrastructure as major challenges in the power supply in the country.

Other challenges facing the sector, according to him, are huge request for compensation by communities along transmission right of way.Nebo stressed the need for more of electro-mechanical engineers, technologists, technicians and artisans in the power sector.

He also called for enactment of new laws or review of old laws on how much a community might receive as compensation whenever a transmission line passed through their land.The minister said that such laws should also ensure the effective performance of the electricity market, particularly revenue collection and vandalism of electricity infrastructure.

“The law should also support development of gas infrastructure for power supply, including penalties for dealing with vandalism of gas infrastructure,” he added.

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