VENTURES AFRICA – Nigeria plans to introduce private investors into the transmission business of its power industry, according to prof Chinedu Nebo, the country’s Power Minister.
During a chat with reporters in Lagos at the on-going Investors Summit Nigeria, prof Nebo disclosed that the government is seeking private investment to develop transmission infrastructure, adding that Nigeria had secured significant funds to upgrade its transmission networks.
Before such investments could be welcomed or utilized however, an effective model that allows easy collection of revenue for the three branches of the power industry – Generation, Transmission and Distribution, Business Day reported.
“There has to be a model for this,” the Minister said. “If someone is going to invest in transmission infrastructure, he doesn’t generate or distribute. He is just the link between generation and distribution, and he has to get his money back. So proper wheeling charges have to be integrated, not the kind of wheeling charges that we have today, because there are a lot of losses encountered in the entire transmission network.”
Transmission is considered the bridge between Generation and Distribution, which have both been sold to independent operators following the successful privatization process late last year. Transmission still remains in the government’s control.
It is considered the most problematic segment with infrastructure acutely inadequate or outdated. Industry analysis reveal current infrastructure can only transmit 6,000MW of power at full capacity and would require over $3.5 billion to increase capacity to 20,000MW by 2016.
Nigeria raised an estimated $1.7 billion from the sale of power assets, most of which will be reinvested in the transmission sector.