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FG to Open Power Sector to New Investors

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  • FG to Open Power Sector to New Investors

The Vice President, Prof. Yemi Osinbajo, on Thursday, said the government is working on a plan to open of up Nigeria’s electricity market to new investors following the inability of the current investors to deliver on their promises.

Osinbajo, who was at the inauguration of a 2x60MVA, 132/33kV substation built by Niger Delta Power Holding Company Limited at Abeokuta, Ogun State, said the present structure of the sector could not deliver power for domestic and industrial use. He, therefore, said “A substantial change of strategy is being pursued.”

According to the Vice-President, Nigeria’s installed capacity stood at 13,427MW and has an available capacity of 8,342MW but the inability of the current distribution companies to distribute power efficiently has incapacitated the sector.

He said, “Today we have 13,427MW of installed capacity, and an available capacity of 8,342MW. The national grid has the capacity to transmit about 7,000M, an increase from less than about 5,000MW in 2015.

“But distribution capacity in the 11 Discos are significantly low, hovering at around 4,000MW on average with a peak of about 5,400MW. So despite the availability of about 8,000MW of generation and about 7,000MW of transmission capacity, lack of Disco infrastructure to absorb and deliver grid power to end users has largely restricted generation to an average of about 4,000MW.”

However, with the Federal Government newly signed 25,000MW power project with a Germany-based company Siemens, the 4,000MW distribution capacity is not going to work. Hence, the reason the government is looking to open up the sector for new investors with the required capacity to deliver adequate power to consumers.

“Second is the opening up of the market to new investors in generation, transmission and distribution infrastructure, transacting directly with each other to serve willing customers including deploying off-grid power and using micro-grids, especially for deployment of solar power,” Osinbajo added.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.