ABUJA – The African Development Bank (AfDB) has described Nigeria power sector reform as the most ambitious ever undertaken in the history of the country.
This is contained in the bank’s 2013 Economic Report on Nigeria released by its country office in Abuja on Wednesday.
According to the report, power generation in the country is targeted to reach 13,000 megawatt by 2015 and 40,000 megawatt by 2020.
It stated that the institutionalisation of the reform through the 2005 Electric Power Sector Reform Acts was a positive step taken to actualise the successful power sector reform.
The report stated that the country developed the roadmap that contained specific short, medium and long-term targets for meeting the challenges in fuel to power generation, transmission and distribution in 2010.
It stated that one of the features of the roadmap was the articulation of the strategy for removing obstacles to private sector investment in the sector.
“Other strategies outlined in the roadmap are; creating an efficient and motivated workforce, operationalising the Nigerian Electricity Liability Management Company.
“The strategies also include contracting out of the management of Transmission Company of Nigeria, clarifying and strengthening the licensing regime and ending the trend of inconsistent policy implementation,’’ it said.
The report noted that significant progress made in implementing the reform included the unbundling and privatising the long-standing government owned monopoly firm in the sector.
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It said the successful handover of generation and distribution assets to a private investor in November 2013, development of cost reflective tariff and establishment of market players were commendable.
The report stated that the improvements in gas-to-power infrastructure and improvement in generation from 2,000 mw in mid-2013 to 4,248mw in February 2014 were the important achievements of the reform.
It added that power reform had attracted significant investment into the sector with the signing of memorandum of understanding with energy giants like General Electric, Siemens, power China and Elecrobas.
The report said the Federal Government‘s 30 million dollars, AfDB’s 100 million dollars and Chinese EXIM Bank’s 500 million dollars intervention funds to the Transmission Company of Nigeria contributed to the success of the reform.
“These reforms could contribute significantly toward unlocking the country’s economic potential and could in turn contribute to consolidating other structural reforms that would promote inclusive growth,’’ it said.
It, however, identified some challenges confronting the reform, which include raising long-term finance for the emerging private sector-owned generation and distribution companies estimated at 10 billion dollars by 2020.
“It has been estimated that this reform will cost more than 40 billion dollars in the next seven years,” it added.
It stated that the funding challenge could be tackled by creating private sector financial intermediaries and instruments for deploying the country’s pension fund totalling about 23.2 billion dollars as at December 2013. (NAN)[eap_ad_3]
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