Nigeria moves toward power privatization

22 November 2002 – Nigeria’s plans to privatize the state run National Power Authority (Nepa) are to be preceded by the unbundling of activities next year and a doubling of generating capacity within three years, President Olusegun Obasanjo said Wednesday.

Nepa will be divided into autonomous generation, transmission and distribution units, Obsanjo told the National Assembly in his budget presentation.

The country also plans to have 10 000 MW of generation capacity by 2005, compared with its present 4500 MW. It intends to build new power plants and upgrade existing ones.

Prior poor performance by Nepa was blamed on obsolete equipment and poor maintenance. As a result of inefficiency in service product delivery, it is conservatively estimated that the nation may have lost about $800m due to very unreliable power supply by NEPA, and another $440m through inadequate and inefficient fuel distribution. The introduction of private finance into the electricity sector is designed to give a boost to the country’s economy and is an important part of the government’s strategy.

Nigeria plans to reach the 10,000 MW target by building new power plants and improving performance at existing facilities.

Obasanjo’s budget speech coincided with the Federal Executive Council awarding contracts for three gas turbines worth 141bn naira ($1.1bn) that will generate an additional 350 MW.

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