The Federal Government has announced plans to partner with the private sector to raise part of the $10 billion required to provide consistent and reliable electricity across the country.
This initiative is a key component of the government’s broader strategy to tackle the nation’s ongoing power supply issues, with a projected timeline of five to ten years.
The discussion took place during a courtesy visit by the Director-General of the Infrastructure Concession Regulatory Commission, Dr. Jobson Ewalefoh, to the Minister of Power, Adebayo Adelabu, in Abuja.
The collaboration aims to harness private sector funding and expertise to help address the country’s power challenges.
A statement released by the acting Head of Media and Publicity at ICRC, Ifeanyi Nwoko, on Wednesday, revealed that during the meeting, the duo agreed on the need for private sector involvement in advancing Nigeria’s power sector.
They acknowledged that due to the substantial funding and technical expertise required to advance the sector, it has become crucial to engage private sector participation through Public-Private Partnerships.
Last week, the Minister of Power ordered the immediate replacement of aged equipment as part of efforts to address the frequent collapses of Nigeria’s national grid. He further indicated that additional funding would be required from the 2024 Supplementary Budget and the 2025 Appropriation Bill to meet the financial needs of strategies aimed at preventing grid failures.
During a recent meeting, the minister also revealed that Nigeria requires at least $10 billion in funding over the next 10 years to achieve the goal of providing a 24-hour power supply nationwide.
He said, “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 $10bn in the next 10 years.
“The government cannot afford that when there are funds critical sectors in need of funding. Can the government do it alone? No! This 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 concessions.”
In response to the minister’s comments, the DG of the ICRC highlighted that through its regulatory processes, the Commission could facilitate private sector investment in part of the $10 billion required for the power sector.
The DG emphasized that such investment would not only help provide regular electricity but also attract more foreign direct investment to other sectors of the economy, ultimately fostering broader economic growth in Nigeria.
The Director General said that in view of the importance of power to the economic development of Nigeria, optimising the performance of existing infrastructure as well as funding new ones was imperative.
The DG recognized that the challenges in the power sector were multifaceted and extended beyond just funding.
However, he believed that with effective collaboration between agencies and partnerships with the private sector, these challenges could be overcome.
“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 regulate the processes of attracting investment to the power sector.”
