Private sector
entry into Nigeria’s electricity supply industry, would bring about
significant increase in revenue of over N1.5 trillion yearly,
BusinessDay findings have shown.
The
findings further show that the increased revenues expected to be
generated in the transitional electricity market by the new investors
would be driven by improved output and efficient service
Analysts
say the envisaged electricity revenues have the potential to dwarf
revenues and profitability of the earlier deregulated telecommunications
industry, making the power sector a goldmine for investors.
Eyo
Ekpo, commissioner for marketing, competition and rates, Nigerian
Electricity Regulatory Commission (NERC), said the country’s electricity
market at the moment is doing N500 billion per annum, which translates
to about N40 billion to N45 billion monthly.
The nation’s
electricity market would grow from its current value of N620 billion to
over N1 trillion in 2016, NERC had recently stated.
“What the
electricity distribution companies are doing is to reduce loss level
from 50 percent to about 10 to
15 percent in the next five years. As
more energy comes on stream, they will continue to reduce the losses.
Now, none of the Discos is efficiently collecting money to pay the
people generating power.
“The potential of the emerging power
sector is limitless. Nobody can tell you what the potential earning
power of the market will be. Now, we are supplying about 4,000 megawatts
(MW) in a market that needs 20 times that. That’s clearly below global
benchmark,” Ekpo said.
The country is currently finalising the
privatisation of its state-owned power assets, which comprise 11
distribution companies (Discos), six generating companies (Gencos), and a
transmission company.
Nigeria, Africa’s second largest economy,
with a population of 170 million, is estimated to require about 40,000
MW of electricity over the next decade, but currently has less than
5,000 MW of available capacity.
