Instability of exchange rates, vandalism of gas pipelines and several other factors has been blamed for the stunted development in Nigeria’s power sector.
Pioneer Managing Director of Niger Delta Power Holding Company (NDPHC), James Olotu, disclosed this recently in an interview.
He revealed further that the development is delaying the gain of over 2.7bn profit that would have accrued to the three tiers of government from the sale of the plants under the National Integrated Power Projects (NIPPs).
It would be recalled that the NIPPs are owned by the federal, state and local governments and the power plants are managed by the Niger Delta Power Holding Company.
He disclosed that “The 10 NIPPs, among which six are currently producing and supplying power to the grid, were worth $7.1bn, even though some private investors had offered to pay $5.7bn for 80 per cent of the facilities, but this had yet to happen due to the three challenges confronting the process”.
He said whereas about $4.4bn was invested in constructing the 10 power plants, over $2bn would have been made by the three tiers of government if the assets had been sold to investors after all.
“Interested investors had complained of foreign exchange fluctuations, vandalism and violence in parts of the country, adding that these concerns had stalled the privatisation process for the plants.
“The entire investment of the NDPHC was $8.4bn. The investments we had in generation, out of that $8.4bn was $4.4bn. The investments we had in transmission network infrastructure development was about $2bn; distribution was $1.5bn; and gas was $500m. The rest was for administration, taking care of compensation, salaries, rents, etc.
“We put 80 per cent of the shares of the 10 power generation plants in the market, which include the finished and unfinished plants. We went to many parts of the world for roadshows. We were in Lagos, Hong Kong, New York and London – the real market places for international business. And at the end of the transaction, we were able to rake in $5.7bn for 80 per cent shares in the 10 plants.”