Business unusual in power sector as new investors lead charge

The conclusion of the privatisation of most of the core assets of the now defunct Power Holding Company of Nigeria has been described as one of the success stories of 2013 and a major milestone of the Goodluck Jonathan-led administration.

The transfer of the successor generation and distribution companies to private investors is essentially expected to bring about the renovation, expansion and repositioning of the companies for the improvement of power supplies in the country.

Last weekend at the handover of Ikeja Electricity Distribution Company, Kola Adesina, chairman of the core investor group, New Electricity Distribution Company/KEPCO, buyer of the Disco, said they were committed to making significant investment to improve and upgrade the facilities in the company.

While noting the need to make the company healthy, viable and ultimately beneficial to Nigerians, he stressed that it would no longer be business as usual. “Our common goal is ‘Let there be light’… It is a new dawn for the industry. We are not going to continue business as usual,” he had said.

Adesina told BusinessDay in a phone chat that there would be an upturn in the way things are done in the entire value chain, adding that their focus is first and foremost to ensure availability and reliability of power supply to their customers. “Essentially, we are going to do those things that are value-added to ensure that epileptic power supply becomes a thing of the past.”

Not a few Nigerians have expressed optimism that the entry of the private sector into the nation’s electricity supply industry would put an end to the nation’s power woes and its attendant crippling of the economy.

“I think we will see considerable improvement in power supply because the investors want to make good profits. And the better they deliver, the more profits they can make,” Dimeji Belo, business development, manager, Prime Atlantic Group, said.

The nation’s power sector had operated for several decades as a state monopoly, with the Federal Government having the exclusive rights to own electricity generation, transmission and distribution facilities.

Pundits have said the entry of the new investors would bring about increased operational efficiency and better service delivery to the customers.

“With the taking over by the private sector of the formerly government owned electric power generation and distribution companies, efficiency should greatly increase as the tariff structure is such that it promotes efficiency and the more efficiently a company along the electricity value chain runs, the more profitable it is likely to be,” said Ayodele Oni, an energy law and policy expert and a senior associate in the law firm, Banwo & Ighodalo.

By: FEMI ASU