No cash for Nigerian power without plan

Nigeria will not pour more cash into power, having spent $10-billion in the last seven years with little to show for it, until it has a clear idea of how to revamp the sector, President Umaru Yar’Adua said on Monday.

Yar’Adua took power on May 29 with a pledge to declare a “national emergency” on power and energy, but he has yet to formally take the step, which he has said would focus more human and financial resources on the shambolic industry.

“The $10-billion invested in the sector between 2000 and 2007 has not translated into power generation, transmission and distribution,” Yar’Adua said in a statement. “So we are exercising caution to ensure that any further funds to the sector would translate into production and delivery of energy to the ordinary Nigerian,” he added.

The president set up a panel of experts in August to develop a new policy road map which is due to be unveiled next month. Yar’Adua said his government aimed to lift power generation to 6 000 megawatts (MW) by 2009 from less than 3 000 now.

Former president Olusegun Obasanjo spent billions of Nigeria’s windfall oil earnings to build seven new gas-fired plants, but failed to attain his target of 10 000MW by the end of last year.
In fact, generation actually declined in the last two years of his administration.

Lack of gas supply to new turbines and poor transmission infrastructure were behind the failure of those attempts.

“More dollars will not provide light, unless we find a project management solution,” Yar’Adua said at a meeting with World Bank vice-president for Africa, Obiageli Ezekwesili, who was a Cabinet minister under Obasanjo.

Yar’Adua said he has not earmarked any money for the power sector in this year’s budget, but will present a supplementary budget in about a month’s time.

Shortage of power is often cited as one of the biggest obstacles to development in Africa’s top oil producer, whose large reserves of crude and gas are mostly exported to Western markets, leaving much of the vast country in darkness.

Nigeria, the world’s eighth biggest oil exporter, passed an electricity liberalisation law in 2005 which set up a sector regulator, stripped the power utility of its monopoly and unbundled it into a national grid, six generation companies and 11 distribution firms.

However, there is still no fiscal framework for the main power feedstock, natural gas, and the unbundling has stalled.

India’s state-run Power Grid won a three-year contract in September to manage the transmission network but there is no date for selling the generating and distribution firms.

Some foreign investors have built power plants but they complain that they lose money on every megawatt they sell to the grid. - Reuters

Client Media Releases

Sanral receives high honour
Conference validates contribution of traditional birth attendants
What makes IIE Rosebank College cool?