Not less than $40 billion (about N9 trillion) is required to guarantee a 20,000 mega watt (MW) electricity supply in parts of Nigeria, operators in the country’s power sector disclosed on Tuesday.
They said the sum was to boost sectoral investment and strengthen the networks across the three-level value chain of generation, transmission and distribution in the medium term.
Speaking under the aegis of Association of Nigerian Electricity Distributors (ANED), the operators are seeking a Federal Government sovereign guarantee to enable them approach global lenders to secure the facility.
ANED’s Executive Director, Sunday Oduntan, while addressing reporters yesterday in Abuja, stressed that despite the new electricity tariff, the operators were still running at a loss largely due to the high dollar exchange rate, which he noted, had increased the cost of procuring operational facilities.
Meanwhile, the debt owed the distribution companies (Discos) by Ministries, Departments and Agencies (MDAs) of government, including the military and paramilitary organisations has hit N60 billion.
Oduntan, who accused the military of harassing employees of the power firms, however, called on President Muhammadu Buhari to intervene by asking the debtor agencies to pay up and stop forthwith the alleged intimidation of distribution officials.
He noted that $7.5 billion of the sought grant would go as credit support for fuel purchases.
The ANED chief was particularly miffed by the alleged mismanagement of the returned Abacha loot, noting that a portion of the money should have been used to stablise the electricity sector.
He stressed that Nigeria would need 160,000MW of electricity in the long term to ensure a 24-hour electricity supply.
Oduntan stated: “$40 billion represents about N9 trillion or 3 times the Foreign Direct Investment (FDI) ever raised in one year by Nigeria.
“It would be a challenging amount to raise, but Nigeria now represents the largest potential energy growth market in the world.”
He stressed that a bulk of global sovereign as well as private equity and hedge funds were being dedicated to generation and energy infrastructure projects.
To access the facility, Oduntan said Nigeria must be able to convince investors that she had changed and were certain of their investments.
On how to convince investors to part with the huge grant, he observed: “We must take two steps to address this issue. We must demonstrate integrity and transparency in the way we manage the funds and their deployment. We must hire Big 4 Audit Firm to audit and protect all funds from leakage.”