by Godwin Akanfe
Taiwo Okeowo, Deputy Managing Director and Head of Investment Banking Division, FBN Capital has said that continuous under-investment has plagued the Nigerian power sector for almost three decades now. He said this while addressing delegates at the 2014 Power Roundtable organised by BusinessDay Conference.
Okeowo explained that the average age of a PHCN employee before the privatisation was about 52 years. He said this was a clear evidence of the underinvestment in human capital. He also commended the government for making power generation and distribution purely market-driven but pointed out that gas supply was still a problem, adding that once the gas supply issue is sorted out in addition to the transmission issue, power sector financing would become lucrative and attractive.
Eyo Ekpo, Commissioner, Market Competition and Rates (NERC), also said at the event that about $360 billion is required to stabilise the power sector in the country. He said the four levers that will make the power sector work are a policy framework, a regulatory environment, the structure of the market, and human capital.
He, however, added that the recent review of gas price to $2.5 per standard cubic feet (scf) has brought about a new era in the gas sector and soon Nigeria would see a lot of traction in the gas processing sector.
Benjamin Dikki, DG of BPE, said, “The three factors that have impeded the privatisation of the Transmission Company of Nigeria (TCN) are the decayed infrastructure, the quantity of the investment required for the refurbishment of the transmission infrastructure, and the fact that at Nigeria’s capacity of 4,000MW, it is commercially unviable and unrealistic because revenue from that capacity cannot sustain the infrastructure.”
“Until we get to 100,000MW, privatising TCN will not make sense,” he said.