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‘The Major Challenge In The Power Sector Is Pricing’




Kola Adesina, Chairman Sahara Power Company, Lagos spoke to DEBO OLADIMEJI on the challenges in the power sector and the way forward.

WHAT actually would you consider as the major challenge in the power sector? The major challenge in the power sector is pricing.

Price comes first, gas follows, and every other infrastructure that people are clamouring for will be easy to come by. Because once the gas infrastructure is readily available, it becomes easier to do other things.

This is because power generation relies on gas. Egbin Power Station for instance generates 1320 megawatts. Egbin is generating as of today about 400 megawatts because of non-availability of gas. If the gas is available then you can have the power that you required.

How soon would that be possible? If these things I mentioned are fixed. If the price is right today, it will set the ball rolling for every other thing to happen.

I know that if I set up a telecom company today because the price is right, I can predict to you that in the next one or to two years there will be availability of service and there will be profit for me to make.

Why is it that the price has not been right? Because of the fact that people see electricity as a social and a political product. They don’t see it as an economic product yet.

The moment they begin to see it as an economic product they are going to price it well. What then is to be done to ensure right pricing of electricity? The simple thing to do is to have an economic model whereby the critical assumption, the constituent part of any pricing is factored in. You must ask the question of how much is gas today?

How much is gas to other users? If gas to other users will attract higher prices, I will rather sell to other users of gas not to the power sector. If those that are desirous of change in the electricity sector can pay the price then they will get the change they desire.

What about employment generation? When we took over the power sector, the first thing we did was to employ 107 engineers. The aging population of staff needs to be replenished and replenished with the necessary skills set that will drive the sector.

We are planning to recruit additional 300 people but please note that without getting the pricing right every other expectation cannot be met. Any message for the incoming administration? Make power a front burner.

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