Nigeria Signs Power Deals, Starts Transfer of Assets to Buyers
Exxon Mobil Corp. (XOM)’s Nigerian unit concluded a deal with the government to provide natural gas to power companies while Nigeria also undertook a partial-risk guarantee, backed by the World Bank, to ensure stable gas supply to its biggest plant, the 1,320-megawatts Egbin station in the southwest. The West African nation also started the transfer of power assets to buyers by certifying part payments made by on 15 state-owned companies.
“The high-value projects signed today will impact positively on the rest of the power sector,” President Goodluck Jonathan said at the signing ceremony in Abuja, the capital. “This would also go a long way in boosting the growing market confidence in the power sector.”
Nigeria, Africa’s top oil producer, is selling majority stakes in power plants and letting private investors acquire as much as 60 percent holdings in six state-owned transmission and 11 power-distribution companies spun out of the former state- owned utility.
Blackouts are a daily occurrence in Nigeria, Africa’s most populous country with more than 160 million people. Electricity demand is almost double the supply of about 4,000 megawatts. The government is offering incentives to investors, including five- year tax breaks and permission to charge higher electricity tariffs, according to the Abuja-based Bureau of Public Enterprises.
Nigeria plans to boost electricity output to 10,000 megawatts by next year and double that by 2016, according to Power Minister Chinedu Nebo.
“A total of $3.4 billion is required up to 2016 to bring our transmission grid to evacuate all the generated power,” he said.
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