FG invests $3.5bn annually in power sector

The Federal Government has over the past 10 years invested about $3.5 billion annually in the power sector, Chinedu Nebo, minister of power, has disclosed.

He is also advocating the listing of distribution (Discos) and generation (Gencos) companies on the Nigerian Stock Exchange (NSE) after the ongoing privatisation exercise for steady flow of liquidity to maintain their facilities.

He said that before now, Nigeria’s power sector was characterised by total neglect and lack of investment by both the public and private sector which consequently resulted to poor electricity generation and distribution.

Nebo, who spoke in Lagos at the CEO utilities sector dinner, organised by the Nigerian Stock Exchange, noted that investment in power sector is highly capital intensive and cannot be borne by the government alone.

“With the level of capital requirement in the power sector, the Federal Government alone cannot afford the huge cost. We intend to inject private resources in the transmission companies. We are planning on ensuring that the transmission components are built on the tariff so that private investors would be able to recoup their resources,” the power minister told participants at the dinner with the theme ‘Financing the Utilities Sector through the Nigerian Capital Market’.

According to Nebo, NIPP projects would be sold out and their proceeds reinvested into the power sector.

“Interest level on these projects are very high. The role of the Nigerian Stock Exchange is not inevitable but necessary to help manage the investments in the existing power facilities. At the end of the privatisation exercise, everybody will believe that the government was right in its decisions. Investors, within and outside Nigeria, have shown various degrees of interest. It is critical that these new companies are listed on the Nigerian Stock Exchange for steady flow of liquidity to maintain their facilities and help in government’s agenda of job creation,” Nebo stated.

He noted that one of the things about the power sector is that it is the mother of national development.

“Every individual is somehow connected to power. I am ashamed to say that we generate about 4,000 megawatts of electricity. 40,000 megawatts of electricity would not even be enough for Nigeria,” Nebo said at the dinner.

Oscar Onyema, chief executive officer, Nigerian Stock Exchange, said, “The NSE is fully equipped to support the privatisation of the utilities sector, as it acts as source of deep pool of capital and currency for expansion. There is huge capacity to raise capital because the quality of a company depicted by its financial performance would attract funds from all financial markets (local and foreign),” he added.