$10bn investment needed for reliable power supply — Minister

The Federal Government has outlined plans to partner with the private sector to raise a portion of the $10 billion required to provide consistent and reliable electricity across the country. This initiative is part of the government’s broader strategy to tackle Nigeria’s long-standing power supply issues, with an expected timeline of five to ten years.

The issue was discussed during a courtesy visit by the Director-General of the Infrastructure Concession Regulatory Commission (ICRC), Dr. Jobson Oseodion Ewalefoh, to the Minister of Power, Adebayo Adelabu, in Abuja.

According to a statement from the Acting Head of Media and Publicity, Ifeanyi Nwoko, both officials agreed on the need for private sector participation through Public-Private Partnerships (PPPs) to raise the necessary funds and bring in expertise to optimise the country’s power infrastructure.

Last week, Adelabu ordered the immediate replacement of ageing power equipment as part of a plan to prevent the frequent collapse of Nigeria’s national grid. He noted that additional funding would be needed from the 2024 Supplementary Budget and the 2025 Appropriation Bill to address the financial implications of the strategies needed to stabilize the grid.

During the meeting, Adelabu stated that Nigeria needs at least $10 billion over the next ten years to achieve a 24-hour power supply across the country.

He said, “To achieve a 24-hour power supply across Nigeria within the next five to ten years, a minimum funding of $10bn is required. The government cannot shoulder this alone, given the pressing financial needs of other critical sectors.

“Can the government do it alone? No! This is why we need to marshal private sector funds while still retaining government interest and ownership. This is where ICRC comes in. We need to collaborate with the private sector, and the best way to do this is through concessions.”

In response, Dr. Ewalefoh said that the ICRC, through its regulatory processes, could facilitate private sector investment to help meet the $10 billion target for the power sector.

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He acknowledged the complexities facing the sector, which go beyond just financial challenges, but noted that these could be addressed with inter-agency collaboration and private-sector involvement.

He said, “Revamping the power sector requires planning, investment, and time. We need to collaborate to resolve the issues in this sector. The investment required is vast, and the government cannot fund it alone, so we must leverage the private sector’s financial capacity. That is why the ICRC was established—to regulate this leverage.”

Ewalefoh also praised the minister for his extensive knowledge of the power sector, noting that President Bola Tinubu’s choice of Adelabu for the role was a commendable one.

He added that to accelerate PPP investment as directed by President Tinubu, the ICRC had issued a six-point policy direction to streamline the PPP process for service delivery.

The ICRC DG stressed that although the processes have been streamlined to accelerate project delivery and attract investors, the Commission remains vigilant in its regulatory function to prevent potential liabilities or delays from companies lacking the necessary capacity.

He also stressed that all PPP agreements would now include conditions precedent, ensuring that any preferred bidder who fails to meet the terms of the agreement will have their contract automatically nullified.