Federal Government has said that Nigerian electricity companies need an estimated N2 trillion or about $2.5 billion in capital to improve power supply in Nigeria.
Bloomberg reported that the power sector would require new investors to revive it, adding that the sector can barely supply power to its 200 million population.
Special Adviser to President Bola Tinubu on Energy, Olu Verheijen, said the companies were over-leveraged and under-capitalised, which has limited their capacity to invest in distributing electricity to households.
Industry sources noted that inadequate pricing, patchy revenue collection and a dilapidated national grid had left most residents in Africa’s most populated nation to produce their own power using noisy generators.
Bloomberg disclosed that in Lagos, Nigeria’s commercial capital, for instance, the grid delivered only 1,000 megawatts to the city of 25 million people.
It added that by contrast, Shanghai, with roughly the same population, supplies more than 30,000 megawatts at peak demand. It also stated that only 4,000 megawatts of Nigeria’s 13,000 megawatts of installed capacity for electricity generation were distributed to homes and businesses.
It added that in contrast, South Africa — with a population that’s a third the size of Nigeria’s and whose economy was crippled by almost-daily power cuts last year — had about 52,000 megawatts of capacity, three quarters of which comes from a debt-riddled state-owned utility running aged plants.
Verheijen said: “We need to set policies that facilitate reorganisation and recapitalisation and bring in new partners with new capital.”