The Federal Government of Nigeria has revealed plans to collaborate with the private sector to raise a portion of the $10bn required to ensure a consistent and reliable electricity supply across the country.
This initiative is part of the government’s broader strategy to address the nation’s chronic power supply challenges and is expected to take five to ten years.
This was the focus of discussions when the Director-General of the Infrastructure Concession Regulatory Commission, Dr. Jobson Oseodion Ewalefoh, paid a courtesy visit to the Minister of Power, Adebayo Adelabu, in Abuja.
A statement by the Acting Head of Media and Publicity, Ifeanyi Nwoko, on Wednesday, revealed that the two officials agreed that given the funding and technical requirements necessary to advance Nigeria’s power sector, it had become imperative to seek private sector involvement through Public-Private Partnerships for co-financing and expertise to ensure optimal performance of power infrastructure.
Last week, the power minister ordered the immediate replacement of aging equipment as part of recommendations to prevent the frequent collapse of the national grid.
He added that additional funding would be required from the 2024 Supplementary Budget and the 2025 Appropriation Bill to resolve the financial implications of strategies needed to curb the ongoing grid collapse.
During the meeting, the minister revealed that Nigeria requires at least $10bn 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.”
Reacting to the minister’s statement, the Director-General said that through its regulatory processes, the ICRC could facilitate private sector investment in part of the $10bn required to improve the power sector, attract more foreign direct investment into other sectors, and ultimately stimulate economic growth.
The ICRC DG acknowledged that while funding is crucial, the challenges facing the power sector are complex and extend beyond finances.
However, with inter-agency collaboration and private-sector involvement, these limitations can be addressed.
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.”
The Commission is committed to regulating the processes of attracting investment into the power sector.
He commended the minister for his extensive knowledge of the sector and stated that President Bola Tinubu’s choice of him was commendable.
Ewalefoh said that to accelerate PPP investment as directed by President Tinubu, the Commission had issued a six-point policy direction, which has streamlined the PPP process for service delivery.
The DG stressed that although the processes have been streamlined to accelerate project delivery and encourage investors to adopt PPP models, the Commission remains vigilant in its regulatory function to prevent contingent liabilities or unnecessary delays by companies lacking the necessary capacity.
Ewalefoh also noted that the Commission now insists on incorporating conditions precedent into all PPP agreements, stipulating that any preferred bidder who defaults on the terms of the agreement will have their contract automatically nullified.