Utilities
From The Report: Nigeria 2016
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A shortage of electricity is among Nigeria’s greatest obstacles to growth. Chronic shortages affect all consumers, due to a legacy of underinvestment in maintenance and new facilities. The system typically functions at less than half of its installed capacity of around 12,000 MW. Successive administrations have made sector reform a priority, with partial privatisation of the national grid being a key pillar. After years of delays, there have recently been some key investments made, and Nigeria has emerged as a test case for how development finance institutions can help catalyse investment in power across the continent. Although meeting Nigeria’s massive and expanding electricity needs will require the development of its major offshore gas fields, in the short term the combination of reforms and local involvement continues to provide opportunities for investors willing to risk capital on the new, and as yet untested, systems now in place.

This chapter contains interviews with Babatunde Fashola, Minister of Power, Works and Housing; and Jay Ireland, CEO, GE Africa.

Articles from this Chapter

Overview

Pushing forward: The government’s privatisation scheme is breaking new ground
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A shortage of electricity is among Nigeria’s greatest obstacles to growth, with a situation bad enough that residents often referred to the former utility provider, the Power Holding Company of Nigeria (PHCN), as Please HoldCandle Now. Chronic shortages affect all consumers, due to a legacy of underinvestment in maintenance and new facilities. The system typically functions at less than half of its installed capacity of around 12,000 MW. Successive administrations have made sector reform…

Interview

Powering up: OBG talks to Babatunde Fashola, Minister of Power, Works and Housing
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Interview:Babatunde Fashola What effect has privatisation had on the sector? BABATUNDE FASHOLA: It is important to understand why reforms to the power sector were initially necessary in Nigeria. For many years, with the exception of a few gas-to-power initiatives with international energy companies, the federal government was the sole provider of electricity; it managed the generation, transmission and distribution of power. The people of Nigeria deemed that the government was not managing…

Interview

Next generation: OBG talks to Jay Ireland, CEO, GE Africa
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Interview:Jay Ireland How has the privatisation of the power sector impacted overall network reliability? JAY IRELAND: The privatisation of the power sector is under way and moving in the right direction, but in terms of its impact on the final consumers, there is still a lot of work to be done. Power generation is still quite low when you compare the deficit between what is generated with the total potential and real demand. Generation of power is now deregulated. We have seen some progress…

Analysis

Turning tide: Updated legislation has led to a pipeline of renewable projects
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Renewable energy has long been a core part of the electricity mix in Nigeria, with its three hydroelectric dams contributing around 20% of power supply. However, with the passing of a new national renewable energy policy, including targets and feed-in tariffs for various forms of renewables, the country hopes to take an even bigger step. The goal is to source 10% of renewable energy from sources other than large-scale hydro by 2020, an objective outlined in the National Energy Masterplan. That implies…

Analysis

Lead the way: A unique opportunity is blazing a new trail for future independent power producers
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Having now sold off most of its electricity assets, the Nigerian government is not expected to be the primary builder of power plants in the future, and may not even build any at all. The country instead views its role as creating a facilitative environment for independent power producers (IPPs). While Nigeria has existing IPPs, the 459-MW, nearly $900m Azura-Edo IPP is considered the first of its kind: an IPP that will produce for the grid and will be built using a project finance structure which…