Utilities
From The Report: Nigeria 2013
View in Online Reader

Electricity is regularly cited as Nigeria’s chief obstacle to economic growth, but 2013 may mark a turning point for what is often referred to as the country’s Achilles heel. For more than a decade, the lack of reliable power has cut into profit margins and increased operating overheads. Under-investment and mismanagement are generally accepted as being among several primary causes of the power problem. The leadership hopes a privatisation process – now under way for power generation and distribution companies – will remove these obstacles. Despite some last-minute hiccups in the privatisation schedule and challenges still to come, Nigeria’s business community is convinced that a tipping point has been reached in the sector’s reform process, and that the privatisation effort will pay off.

This chapter contains interviews with Chinedu Nebo, Minister of Power; and Ute Menikheim, CEO for Africa, Siemens Energy.

Articles from this Chapter

Overview

Improvement works: Privatisation is under way to enhance services to residents
OBG
plus

Electricity is regularly cited as Nigeria’s chief obstacle to economic growth, but 2013 may mark a turning point for what is often referred to as the country’s Achilles heel. Nigeria has a population of some 168.8m but produces less grid-connected electricity than a major British city. For more than a decade, the lack of reliable power has cut into profit margins and increased operating overheads. The leadership hopes a privatisation process – now under way for power generation and distribution…

Analysis

Reducing risk: Guarantees are sought in the privatisation of state utilities
OBG
plus

As privatisation of Nigeria’s power sector evolves, one of the most pressing concerns will be that of risk guarantees. Given the stuttered progress in attracting investment to the sector prior to 2013, finding ways to reduce the risk profile of projects is considered important. The privatisation process has been designed with a reliance on guarantees to support bidders for successor companies created by the unbundling of Power Holding Company of Nigeria (PHCN). MECHANISMS: As of mid-2013,…

Interview

OBG talks to Chinedu Nebo, Minister of Power
OBG
plus

Interview:Chinedu Nebo What is the greatest challenge to increasing private involvement in the electricity sector? CHINEDU NEBO: The problem of power in Nigeria has grown with time. We have a situation where there has been an exponential growth in population without a concomitant improvement in power infrastructure. Nigeria is now ripe for a revolution in the power sector. It is a globally accepted principle that the private sector manages commercial ventures much better than the government.…

Interview

OBG talks to Ute Menikheim, CEO for Africa, Siemens Energy
OBG
plus

Interview:Ute Menikheim What challenges does urbanisation pose for electricity generation, transmission and distribution? In what ways can these problems be resolved? UTE MENIKHEIM: Reliable electricity generation, transmission and distribution form the foundation of every megacity. With economies in Africa booming, cities such as Lagos, Johannesburg and Cairo require more sustainable electricity to complement the build-up of manufacturing as well as the steadily increasing number of people…

Analysis

Settling in: The partial completion of the privatisation process brings a new set of issues to the table
OBG
plus

Following the handover of the Power Holding Company of Nigeria’s (PHCN) assets, talks will now move from the bidding process of the PHCN’s successor companies to the next set of challenges: what the possible roadblocks could be going forward, and what kinds of strategic decisions are the new owners likely to make? The finance and other types of foreign investment secured by the new owners will be important details for equipment vendors in tailoring their strategies to approach these new partners.…