Teddy Oscar, Abuja
In a bid to sustain the achievements made by the Federal Government in the nation’s power sector, government on Monday set up the Power Sector Intervention Fund (PSIF), and made an initial deposit of N300 billion.
This, according to President Goodluck Jonathan, would allow industry players have access to cheap, long term funds, and help reposition the power sector.
Declaring open the Nigeria Power Sector Financing Conference, with the theme ‘private sector financing/support for electric power and infrastructure’ on Monday at the Banquet Hall, Presidential Villa in Abuja on behalf of Jonathan, Vice President Namadi Mohammed Sambo disclosed that about $10 billion would be needed to add additional 5,000 megawatts of electricity to the national grid.
Nigeria currently generates 4,000 megawatts of electricity for about 170 million Nigerians, something that is by far too poor when compared to South Africa that generates 40,000 megawatts for about 50 million of its citizens.
In his declaration speech, Sambo further hinted that the nation’s energy sector needs an infusion of $900 billion for the next 30 years.
“Under our National Integrated National Infrastructure Master Plan (NINIMP), we need a total of $2.9 trillion for our infrastructure developmental efforts in the next 30 years, that is 2014 to 2045. The energy sector alone needs an infusion of about $900 billion during the period. Of this, a significant percentage is expected to come from the private sector. The power sector alone needs about $10 billion for CAPEX of generation and distribution companies in the next few years to enable us add additional 5,000 megawatts (of electricity) to the national grid.
“Similarly, our transmission network continues to attract serious attention. The transmission grid requires an annual investment of about $1.5 billion for the next five (5) years to ensure its reliability and stability. The Transmission Company of Nigeria (TCN) has commenced the aggressive implementation of the expansion blueprint funded by a mix of appropriation and funds from financial and multilateral institutions,” Sambo said.
Meanwhile, Dr. (Mrs.) Ngozi Okonjo-Iweala, coordinating minister of economy and minister of finance, expressed fear that the nation’s current economic performance may not reach its full potential due to the significant gaps in its infrastructure.
In her speech, she hinted that government needs over $14 billion to address the infrastructure gap in the country.
While noting that the gaps are very significant with the power and transport industries, Okonjo-Iweala disclosed that government currently spends about $5.9 billion on infrastructure.
“Regardless of our current economic performance, our economy would not reach its full potential, if we do not address the significant gaps in our infrastructure, particularly in power and transportation industries. According to a joint World Bank and African Development Bank (ADB) study, we are losing about 2 percentage points of GDP growth each year as a result of our infrastructure deficit, and we need about $14.2 billion per year to breach the infrastructure gap, with about $10.5 billion needed for federal infrastructure alone, whereas current spending is about $5.9 billion.
“This is why the government developed the 20-year Nigerian Integrated Development Infrastructure Master Plan (NIDIMP) to accelerate infrastructure development in the country, with the aim of raising a succour for infrastructure,” she added.
The minister, who compared Nigeria with the likes of South Africa, Egypt and Ghana further pointed out that: “You can see that our consumption is abysmally low, and, therefore, there is tremendous need for improvement. But I choose to look at it as the opportunities rather than the challenges. And the implication is that, if there is more to invest, and the investments would yield fruits.”
In his opening remark, Chinedu Ositadimma Nebo, minister of power, who reassured government’s commitment to reposition the power sector, expressed optimism that the conference would its expectations.
“Market liquidity would be the major incentive to attract the required capital requirement,” he added.
