Foreign investors have rejected the invitation of the Federal Government to invest in the power sector because of its low prospects.
This happening as the country is seeking ways to invest $20billion yearly in the sector over the next five years to generate 20,000 megawatts (Mw) of electricity to boost power supply.
It was gathered that the investors, mainly from United States, China, Korea, United Kingdom, Germany and other countries from Europe, are seeing Nigeria as an investment risk nation. As a result of this, they not ready to invest in the country.
A source, who pleaded anonymity, said many investors, who attended the recent World Bank conference in Washington, United States, discussed the possibilities of investing in the sector and concluded that it was not safe.
The source, a management staff of one of the eleven power distribution companies (DisCos) and participant at the conference, said foreign investors saw the country’s electricity industry as lacking prospects.
The source said: “The prospects of recouping money spent on investment in the power industry is increasingly dimmed by factors such as pipeline vandalism, inability of the power generation companies (GenCos) to access gas for production, poor supply and collections rates.’’
Chief Executive Officer, Mojec International Limited, Ms Chantelle Abdul, said foreign investors would have loved to invest in the power industry were it not its lack of investible prospects.
She said: “The sector is one of the most attractive aspects of the economy. I just came back from Washington, and investors there said the sector lacked investible propositions. The investors, like many others, considered parameters such as patronage, yielding point, profit margin and others, and concluded they may not be able to recover their investments as at when due. For millions of dollars invested at the top of the chain, there were no commensurate collections at the bottom chain.’’
She said investors were aware of the potential in the sector, but are not ready to invest, until the industry overcame its many fundamental problems.
Nigeria, Africa’s largest economy, hardly generates 5000Mw of electricity. Peak generation hovers around 2000Mw and 4000Mw.
This development has led to the near extinction of the manufacturing sector as companies that could not cope with the crushing cost of generating power to run their plants have either closed shops or relocated to neighbouring West African states.
Source: The Nation