The Federal Government has disclosed plans to bridge the $10 billion funding gap for the power sector through partnerships with the private sector aiming to secure reliable and constant electricity supply across Nigeria within the next five to 10 years.
This decision was announced during a meeting between Adebayo Adelabu, minister of power, and Jobson Oseodion Ewalefoh, director- general of the Infrastructure Concession Regulatory Commission (ICRC) in Abuja last week.
Ifeanyi Nwoko, acting head, Media and Publicity, in a statement on Sunday, noted that the duo agreed that in view of the funding and technical requirement needed to advance the power sector in Nigeria, it had become imperative to seek private sector input through public-private partnership (PPP) in co-financing and providing expertise that will ensure optimal performance of power infrastructure.
He said Ewalefoh noted that in view of the importance of power to the economic development of Nigeria, optimising performance of existing infrastructure as well as funding new ones was imperative.
He acknowledged the challenges in the sector are hydra-headed and go beyond funding alone, noting that with such inter-agency collaboration and partnership with the private sector, the limitations can be addressed.
He further said that through its regulatory processes, the ICRC can midwife private sector investment of $10bn in the power sector to provide regular electricity, attract more foreign direct investment to other sectors and ultimately grow the economy.
“Revamping the power sector requires planning, it involves investments and it takes time. So, we need to collaborate to solve the issues in this sector. The investment required in power is very huge and the government cannot fund it alone. So, we have to leverage on the financing capacity of the private sector. That is why the ICRC was set up to regulate this leverage.
“The Commission is poised to regulating the processes of attracting investment to the power sector.”
Ewalefoh also disclosed that in a bid to accelerate PPP investment as directed by President Bola Ahmed Tinubu, the commission has issued a six-point policy direction which has ultimately streamlined the process of PPP service delivery.
The DG stressed that whereas the processes have been streamlined to accelerate project delivery and encourage investors to adopt PPP, the commission is not relenting or compromising on its stringent regulatory function so as to forestall contingent liabilities or unnecessary delays by companies that lack the requisite capacity.
In view of the above the ICRC’s helmsman added that the commission is now insisting on inserting conditions precedent to all PPP agreements such that any preferred bidder that defaults will have their agreement automatically nullified by reason of their default.
On his part, the minister commended the DG for the initiative to visit the ministry with the proposal of advancing investment in power sector through PPPs.
“For us to achieve 24 hours power supply across Nigeria in the next 5 to 10 years, there is a minimum funding requirement of about 10 billion dollars in the next 10 years.
“The government cannot afford that, when there are other critical sectors in need of funding.
“Can government do it alone? No! which is why we have to look for or marshal private sector fund while still retaining government interest and ownership. That is where ICRC comes in. We need to do this in collaboration with the private sector and the best way is through concession.”
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