Nigerian President Announces Plan to End State Monopoly in Power Industry

Nigerian President Goodluck Jonathan announced a plan to dissolve the state power monopoly and expand electricity generation through private investment.

The government will sell 11 distribution companies created out of Power Holding Co. of Nigeria, the state-owned utility, and allow private companies to set up power plants using natural gas, hydro-electric dams and coal-powered stations, Jonathan said in a speech in Lagos, the commercial capital, broadcast on state television today.

“The industry can only grow with liberalization,” he said.

Blackouts are a daily occurrence in Nigeria, where demand for electricity is almost double the current supply of 3,000 megawatts. The West African nation is the continent’s most populous, with 140 million people. The government wants to boost generation to 14,019 megawatts by 2013, Barth Nnaji, the president’s adviser on power, said on Aug. 17.

The new plan comes after the government failed to meet a December 2009 target to boost generation to 6,000 megawatts. The renewed drive to expand Nigeria’s power generation will rely heavily on the country’s natural gas reserves, Petroleum Minister Diezani Alison-Madueke said.

“The power sector growth that is envisaged will translate in the minimum to a gas demand of about 3 billion cubic feet per day by 2015 from the current level of about 800 million cubic feet per day,” she said.

Nigeria, Africa’s biggest oil producer, has the continent’s largest proven gas reserves of 187 trillion cubic feet, according to the Petroleum Ministry. Poor infrastructure has hampered efforts to distribute gas domestically.

To contact the reporter on this story: Dulue Mbachu in Lagos via Johannesburg at solukoya2@bloomberg.net; Sam Olukoya in Lagos via Johannesburg on solukoya2@bloomberg.net.

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