FG to source $10bn from private sector for electricity overhaul

The Federal Government of Nigeria, through the Ministry of Power, has disclosed plans to source $10 billion from the private sector to provide regular electricity across Nigeria within the next five to 10 years.

This formed the crux of the deliberation when Jobson Oseodion Ewalefoh, director-general of the Infrastructure Concession Regulatory Commission (ICRC) paid a courtesy visit to Adebayo A. Adelabu, minister of Power, on Tuesday in Abuja, a statement said.

The duo agreed that, given the funding and technical requirements needed to advance the power sector in Nigeria, it had become imperative to seek private sector input through Public-Private Partnerships (PPP) in co-financing and providing expertise to ensure optimal power infrastructure performance.

Speaking during the meeting, the DG of the PPP of the regulatory body acknowledged the challenges in the sector were hydra-headed and went beyond funding alone, noting that with such inter-agency collaboration and partnership with the private sector, the limitations could be addressed.

Reacting to a comment by the minister, the DG said that through its regulatory processes, the ICRC can midwife private sector investment of part of the $10 billion 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 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.”

In addition, Ewalefoh said that in a bid to accelerate PPP investment as directed by President Bola Tinubu, the Commission had issued a 6-point policy direction that streamlined the process of service delivery.

The DG stressed that whereas the processes had been streamlined to accelerate project delivery and encourage investors to adopt PPP, the Commission was not relenting or compromising on its stringent regulatory function to forestall contingent liabilities or unnecessary delays by companies lacking the requisite capacity.

In view of the above, the ICRC’s helmsman added that the Commission was 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.

In his response, the minister commended the DG for the initiative to visit the ministry with the proposal of advancing investment in the power sector through PPPs.

“For us to achieve 24-hour power supply across Nigeria in the next five to 10 years, there is a minimum funding requirement of about $10 billion in the next 10 years. The government cannot afford that when there are other critical sectors in need of funding.

“Can the government do it alone? No, which is why we have to look for or marshal private sector funds 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,” he added.