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15 Indian companies including TataPower, GMR Group and Adani Powereye Nigerian power projectsRachita Prasad, ET Bureau Jan 25, 2012, 04.10AM IST

MUMBAI: Around 15 Indian companies, including Tata Power, GMR Group and Adani Power, are amongcandidates shortlisted by the Nigerian government to participate in the privatisation of power projects ofstate­owned National Electric Power Authority (NEPA), sources close to the development told ET.

Struggling on home ground with multiple issues which have delayed capacity addition, Indian powercompanies are exploring participation in power generation and distribution projects in Nigeria to fuel theirgrowth despite the civil unrest in the country.Nigeria is in the process of selling a 51% stake in four thermal and two hydro power generation units and 11transmission projects since NEPA's poor operational and financial performance has deterred capacityaddition in the country.

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"Nigeria is a part of our geographical expansion plan. It has gas reserves and the energy requirement of apopulation of 15 crore people is a big incentive," said Arun Sen, CEO of Lanco International, an arm ofLanco Infratech.

"They have a need and we have the technical, commercial and operational capability," he said. Nigeria isAfrica's largest crude oil exporter and has the world's seventh largest gas reserves. But the most populousnation of Africa generates only around 4,000 MW that is enough to power only 40 lakh households. Reportssuggest that despite several delays, the country aims to complete the process of privatisation by the secondquarter of 2012.

Indian companies are considering Nigeria as a "natural hedge against local slowdown", but the entry into thecountry would not be easy, given its political and social condition. Some of these Indian companies arealready jittery about going ahead in the bidding process as Nigeria struggles with widespread religiousviolence, labour unrest, crumbling infrastructure and high incidence of corruption.

"The country risk for Nigeria is not encouraging," said A Subba Rao, CFO, GMR Group. "As a strategy, wewill not be bidding for projects overseas, except for airport projects. We participated in the process in Nigeriawith a perspective to learn more about the international market, but we don't plan to go ahead with bidding,"he said.

Sector experts said that Indian companies which have a presence in Africa, particularly in Nigeria, would bewell placed to participate in the bids for these projects. Also, the energy security that the country canprovide may lure companies to bid actively for these projects.

"We have an offshore oil and gas block in Nigeria. We would like to leverage on our presence in the countryand take up power projects there," a spokesperson from Essar Energy said.

Skipper Electricals (India), which is among shortlisted candidates for the privatisation project, believes thatthe unrest may be short­lived. "These disturbances don't deter our plans. The problems would be over. So,we don't feel the need to give up on the opportunity," said Skipper's chief executive officer Rakesh Sardana.

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