Nigeria’s power generation and distribution industry is to be handled exclusively by the private sector as part of key reforms announced by President Goodluck Jonathan to improve electricity supply in the country.
The government, Jonathan said, would however retain the transmission business, which is often considered too sensitive to be left solely in the hands of the private sector.

“Government will disengage from generation and distribution of electricity in the country and will encourage private sector participation in these areas,” the President said while unveiling his “Roadmap for Power Sector Reforms” in Lagos on Thursday.

“The private sector will be responsible for the generation and distribution of electricity, but government will still own transmission but with private sector management,” headed. Accordingly, the President said, government would hands-off the various unbundled transmission and distribution firms currently being supervise or managed by the Power Holding Company of Nigeria (PHCN) to the private sector.

The announcement ended years of speculation on the possible privatisation of PHCN and Jonathan assured citizens that the reforms was the best solution to Nigeria’s epileptic power generation and supply crisis.
“The new private-sector driven electricity industry is the panacea for progress and growth of the sector and the nation,” he said.

The President, who did not hide the possibility of job losses by PHCN workers under the new reform structure said government through a supplementary budget had earmarked N57 billion to settle outstanding monitisation arrears owned PHCN staff. He said while the bulk of staff of the new privatised firms would obviously come from PHCN workers, those likely to be affected by any form of retrenchment need not fear as funds had also been provided to address their needs.

“We are providing funds from the supplementary budget to address the workers severance, pension and gratuity payments from the privatised firms,” he said. “It should be obvious that the electricity industry can only expand like the telecoms industry after the introduction of a liberalisation policy,” he added. Plans to effect the reform of the industry kick started by former President Olusegun Obasanjo had been stalled by President Yar’Adua on assumption of office.

Nigeria’s power generation remains abysmal at about 3,500 average generation capacity throwing up most part of the country into darkness with industries and commerce badly affected due to high cost of production associated with running business on diesel and petrol powered generators.

The recent reforms provides a climate that allows changes in tariffs, a key demand of private sector investors who want to ensure timely cost recovery and Jonathan acknowledged this in his speech when he said “in drawaing up the roadmap we identified tariff as critical factor in resolving the entire value chain of the supply of electricity and the idea is to achieve a tariff structure that is attractive to investors.”

He said more independent power producers and even International Oil Companies (IOCs) are expected to take advantage of the reforms and invest in additional generation capacity of 5,000megawatts in the next four years.




http://www.sunnewsonline.com/webpages/news/national/2010/aug/27/national-27-08-2010-014.htm

••• As Fashola makes case for Lagos


Lagos State Governor, Mr. Babatunde Fashola has tasked the Federal Government to vigorously pursue the implementation of critical power projects in other to achieve the greatest impact, even as President Goodluck Jonathan assures Nigerian of adequate power supply.

The governor who spoke at Eko Hotels, Victoria Island venue of the launch of a Roadmap for Power Sector by President Goodluck Jonathan on Thursday added that investment decisions must be made on the basis of economic and developmental common sense rather than emotional cronyism.

On the need to give priority attention to Lagos on power projects, he said, “This is Nigeria’s largest consumer market, this is Nigeria’s financial power house, this is the country’s largest consumer of electricity, and this must be the prime destination for the investment of Nigeria’s prime resource if we truly desire to achieve the greatest impact with the minimum of effort and resources.”

He remarked that the year 2010 will make it 21 years since the capital of the Federal Republic of Nigeria moved from Lagos to Abuja, “a decision which has left Lagos with the role of commercial capital of Nigeria and the West Africa sub-region which she continues to discharge admirably in spite of the odds.”
“This visit, coming 21 years after that historic movement, is capable of many interpretations, but I do sincerely expect that after we have listened to Your Excellency, the most important interpretation will be the one you will leave us with.”

He expressed the belief that the interpretation will hopefully be the acknowledgment of the critical role of Lagos in the Nigerian State and a commitment to do what is just and right to assist the State’s development in the interest of all Nigerians.

Fashola said global and international impressions of countries are formed by impressions of first entries to their commercial or administrative capitals or both, adding that cities like Paris, New York, London, Accra are the places from which global impression of France, USA, England and Ghana are formed even though fewer people hardly ever visit their other famous cities like Lyon in France, Chicago in America, Portsmouth in England and Kumasi.

“The impression of Nigeria is formed from Lagos by the millions who use her sea and airports. If we must therefore improve on that impression, Lagos is like the sitting room of the Nigerian household that must be maintained in a pristine condition, and must get Federal funding support for electricity, roads, water supply and critical infrastructure,” the Lagos State Governor emphasized.

President Goodluck Jonathan in his address commended Governor Babatunde Fashola for the warm reception he received, adding that the warm applause, which the Governor also got at the Eko Hotels gathering must be a reflection of the fact that he is doing well in Lagos. He said his government is committed to putting in place reforms in the power sector that will ensure uninterrupted power supply for all Nigerians by privatizing electricity generation and distribution.


http://www.sunnewsonline.com/webpages/news/national/2010/aug/27/national-27-08-2010-015.htm

FG to sell 51% stake in electricity companies !

The Federal Government plans to sell 51 per cent of its stakes in the 17 out of the 18 successor companies of Power Holding Company of Nigeria.



Eleven of the companies are into distribution and they will be sold in 2011. Six are in the generation business.



According to the roadmap to power sector unveiled on Thursday by President Goodluck Jonathan, the government will not sell the Transmission Company of Nigeria.



But the transmission company, which is in charge of the National Grid, will be managed by the private sector.



The roadmap reads, “With regard to the medium to long term horizon, the government intends that full responsibility for the operational effectiveness of the distribution companies should shift from the Federal Government to the private sector no later than 2011.



“Nevertheless, the actions and decisions of the Federal Government will continue to exert a significant impact on their commercial effectiveness.



“All the distribution companies are expected to be privatised based on a core investor sale of a minimum of 51 per cent of the government‘s equity in the companies.



“The PHCN successor, thermal generating plants, will be privatised via the sale of a minimum of 51 per cent equity to core investors that clearly demonstrate the technical and financial ability to operate and expand each plant.”



The roadmap can be sighted on www.nigeria. powerreform.org.



Jonathan had at the unveiling of the roadmap in Lagos, said that the Federal Government was preparing to leave the power sector in the hands of private operators.



He explained that the government would retain the transmission grid and regulate the operators of the generating and transmission companies.



The President also assured that power would become stable in 2012, the year that independent power producers would have added 5,000 Mega Watts.



He said, “By 2012, Nigerians will not only celebrate one day of stable power supply but one week and one month of uninterrupted power supply.



“We have stated on a number of occasions that on the attainment of stability in the sector, government will disengage from generation and distribution of electricity in the country.



“Government will encourage private sector participation in this area. Therefore, as articulated in the Electricity Power Sector Reform Act, the private sector will be responsible for generation and distribution, while government will still hold the transmission grid but with private sector management.”



The President said at the event attended by 13 state governors and deputy governors , including Mr. Babatunde Fashola (Lagos) and Otunba Gbenga Daniel (Ogun), that independent power plants built by private operators would soon be inaugurated.



He said, “We are in the process of inaugurating independent power producers, international oil companies and companies that have captive production of electricity to produce at least 5,000MW of new capacity.



“These plants will begin production in 2012 and 2013.



“Government will provide incentives that will encourage them to invest in the construction of the power plants.”



Jonathan pointed out that the success recorded in the telecoms sector had shown that only a private-sector led reform could revive the power sector.



“It is obvious that the electricity sector can only expand, like the telecoms sector did, after privatisation,” he added.



The President added that government had decided to implement the power sector reform Act by privatising the 11 electricity distribution companies to bring efficiency into distribution management.



“The distribution infrastructure is dilapidated. The Federal Government has decided to follow through on the Power Sector Reform Act by privatising distribution companies to bring about effectiveness,” Jonathan said.



He also said that government had taken steps to reconstitute the board of the Nigerian Electricity Regulatory Commission, which was dissolved by the late President Umaru Yar’Adua.



He said, “The list of the members will be sent to the National Assembly on Monday, next week. I will also send a chairman that will have credential like the INEC chairman (Prof. Attahiru Jega). I decided to do so because we need a revolution in the power sector.



“We expect that those who will be in that commission will drive the power sector reform initiative.”



Jonathan said that Nigeria’s electricity tariff was the lowest in the West African sub-region, stressing that government was adjusting it for it to be “cost reflective.”



He, however, added that the interest of the ordinary customer would be protected in the tariff adjustment.



The President also said that government had made available, the sum N57bn for the payment of monetisation arrears of Power Holding Company of Nigeria workers.



Jonathan added that government had set aside funds to pay severance packages to the PHCN workers that might be affected by the sale of the 11 distribution companies.



Also, the Minister of State for Power, Mr. Nuhu Wya, said the power sector could only be rescued from total collapse through sustainable policies anchored on reforming it along commercial imperatives.



At the event, Fashola called on the Federal Government to start the implementation of critical power projects from Lagos State in order to enable the nation achieve the greatest impact with minimum effort and resources.



A statement by his Special Assistant on Media, Mr. Hakeem Bello, quoted the governor as also saying that investment decisions should be made in Lagos on the basis of economic and developmental common sense rather than emotional “cronyism.”



He said ”This(Lagos) is Nigeria‘s largest consumer market, this is Nigeria‘s financial power house, this is the country‘s largest consumer of electricity, and this must be the prime destination for the investment of Nigeria‘s prime resource if we truly desire to achieve the greatest impact with the minimum of effort and resources.”



Fashola noted that year 2010 was the 21st year since Nigeria’s capital moved from Lagos to Abuja.



”This(Jonathan’s) visit, coming 21 years after that historic movement, is capable of many interpretations; but I do sincerely expect that after we have listened to Your Excellency(Jonathan), the most important interpretation will be the one you will leave us with,” he said.



He pointed out that cities like Paris, New York, London, Accra were the places from which global impression of France, United States, United Kingdom and Ghana were formed.



The governor said, ”The impression of Nigeria is formed from Lagos by the millions who use her sea and airports. If we must therefore improve on that impression, Lagos is like the sitting room of the Nigerian household that must be maintained in a pristine condition; and must get federal funding support for electricity, roads, water supply and critical infrastructure.”



Jonathan, in his address, commended Fashola for the warm reception he received.



The other governors that were present included Adebayo Alao-Akala (Oyo), Patrick Yakowa (Kaduna), Liyel Imoke (Cross River), Aliyu Doma (Nassarawa), and Saidu Dakingari (Kebbi).


http://www.punchng.com/Articl.aspx?theartic=Art20100827605798

I thought there is a Berth Nnaji’s name associated with power reforms. Who is Nnaji? Power is so important to toll with, please appoint those who buy into your vision and not betrayal of trust.

Looks like the poeple at the highest authority in the land are beginning to see common sense.

Fahola statement to me is very profound and I hope the FG will follow through on all these pronouncement, and not to some 2011 election propanganda.

Another fear is a new government coming in in 2011 and jettisioning this whole road map.

Good! While he is at it he should nt forget to also sell the police force .