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Nigeria’s unfolding power reform programme

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Nigeria’s unfolding power reform programme

 The NIPP project

A key element of Nigeria’s Power Roadmap is the establishment of the National Integrated Power Project (NIPP). Realising that the lack of investment in the power sector value chain of generation, transmission and distribution has been the main reason for Nigeria’s inadequate and unreliable power supply, the government commenced with significant investments in the power sector’s infrastructure with the construction of several power generating plants across the country.

Among this infrastructure was 10 gas-fired power plants, managed by the Niger Delta Power Holding Company (NDPHC) with equity investment from the federal, state, and local governments. The aim is to tap into Nigeria’s abundant gas resources, and this determined their locations.

The government plans to tap into Nigeria’s vast gas reserves for power generation. Though this is the goal for the immediate term, the long-term goal is essentially much broader. It is aimed at delivering a wider economic agenda of boosting power supplies to stimulate industrialisation. This aspiration is supported by a set of enabling policy interventions that are already being implemented. These policies include bankable commercial framework reforms in pricing and revenue securitisation to enable sustainable investment in gas supply, as well as a blueprint for gas pipelines and processing infrastructure that will enable flexibility in supply delivery.

The 10 power generating plants under the NIPP scheme, with a turnkey generation capacity of about 5222MW, are at different stages of completion. President Jonathan continues to emphasise his government’s commitment to meet the country’s electricity needs. The NIPP is part of the efforts to achieve this goal.

At the recent inauguration of the Geregu-II power plant, President Jonathan said: “Today’s event goes beyond the symbolic inauguration of the power plant but shows our strong commitment and systematic practical implementation and integrated vision in the power sector.” The president’s speech clearly expresses the government’s goals.

Seven of the NIPP plants were very recently privatised through public bidding organised by the Bureau of Public Enterprise (BPE) acting on behalf of government. The winning firms, which all acquired 80% equity in the plants, have been announced. The delay experienced in the privatisation of the remaining plants is created by litigants, legal processes, and issues concerning transactions.

Nigeria’s power sector initiatives reinforce the country’s potential to provide the necessary incentives that will drive the desired future economic growth. To date, the achievements recorded in the Power Sector Reform point to a well-articulated policy framework that has been efficiently implemented.

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