Nigeria Launches Roadshows For Power Privatisation
Nigeria began a series of investor roadshows for the planned multi-billion dollar privatisation of its power sector on Tuesday, soliciting interest in electricity distribution companies and power stations.
The Bureau of Public Enterprises (BPE), the country's privatisation agency, met with investors in the commercial hub Lagos and will hold similar events in Dubai, London, New York and Johannesburg over the next three weeks.
Africa's most populous nation, plagued by blackouts, wants to privatise power generation and distribution. Government will continue to own the national grid but its management will be privatised.
The investor meetings come ahead of a Feb. 18 deadline for expressions of interest in 11 distribution companies, two thermal generating firms and two hydropower stations.
They also come ahead of presidential and parliamentary elections in April, which have meant the original timetable has fallen behind. Some investors have said they are reluctant to commit until the political uncertainty has cleared.
"The idea of this is that it enables investors to gain some confidence. Even if we don't complete it before the handover of government, no harm is done," BPE Director General Bolanle Onagoruwa said.
"From the response you have seen here, power is something that has attracted the interest of most people in Nigeria. I don't think any administration will come in and not take the issue of reforms in the power sector seriously."
ELECTION
President Goodluck Jonathan unveiled the privatisation plans last August. Nigeria estimates it will need $10 billion a year of investment over the next decade to meet its energy needs.
Power blackouts are a major brake on growth in sub-Saharan Africa's second-biggest economy and Jonathan has made ending them one of the cornerstones of his election campaign.
Some executives said while the elections may be delaying things on the Nigerian side, with minds focused on campaigning, they had little impact on long-term investment decisions.
"The election is not holding us up ... We will evaluate every opportunity and if it makes sense we will invest," said one Asian executive, asking not to be named.
He said his company felt "more comfortable" since Jonathan's victory in the ruling party primaries last week, which increased his chances of victory in April.
Investors have praised the blueprint for reform but say its implementation, and regulation of the sector, will be key.
The 11 distribution companies up for grabs are in the capital Abuja in central Nigeria, the cities of Benin, Enugu, Eko, Ibadan, Ikeja, and Port Harcourt in the south and those of Jos, Kaduna, Kano, and Yola in the north.
The thermal power stations are Ughelli Power Plc, in Delta state in the southern Niger Delta oil region, and Geregu Power Plc in Kogi state in north-central Nigeria.
The hydro power companies, for which concessionaires are sought, are Kainji Power Plc -- comprising power stations in Niger and Kwara states in north-central Nigeria -- and Shiroro Power Plc, also in Niger state.