Enhancing Nigeria’s Power Supply Through Enhanced Public Private Partnership Program

Muhammed Santuraki C.Eng. (IMMM)

Key Facts: Nigeria is a constitutional Republic. Located in West Africa, and shares

land borders with Benin in the West, Niger in the north, and Cameroun and Chad in the East. With a Population of 170 million, Nigeria is the largest country in Africa, and the seventh largest in the world. The country is made up of 36 States

and the federal capital territory, Abuja. Land Area: 923,768 KM2 (32nd) Currency: Naira (1USD = 200

Naira). International Dialing code: +234. Time: (UTC +1). GDP :$448.495 billion (30th). GDP per capita: $ 2,722 .

Nigeria- A Country Overview

Nigeria

Nigeria accounts for almost half the population of West Africa and more than 15% of the Population of the African continent.

Nigeria’s Population is expected to reach 230 million in the next 20 years.

GDP growth rate averaged 7% since 2007, which makes Nigeria one of the fastest growing economies in the world.

Nigeria’s economy is currently the largest in Africa. With a population of 170 million, Nigeria generates only

5,000 megawatts of electricity, compared to South Africa with a population of 50 million which generates 40, 000 megawatts.

In a nutshell Nigeria is a big and power hungry country.

Country Overview Cont’d

With generation is around 5,000 MW , Only 40% of the population currently have access to electricity supply.

Immediate power requirement is estimated at 15,000 MW

It is estimated that around 40,000 MW will be required by 2020.

It is estimated that annual investment of USD 3.5 billion is required over the next 10 years.

With falling oil revenues, government cannot provide the capital investment required.

Current Status of Power Supply

Nigeria’s Power generation in relation to other countries.

Government Expenditure Vs Actual Requirement

To achieve the immediate power requirement of 15,000 MW, annual investment of USD 3.5 billion is required over the next 10 years.

Obviously, government alone can not provide the huge capital required to achieve the power sector targets.

Hence, private capital is required through PPP.

Based on the current scenario, renewable energies through PPP’s offer the best solution due to rapid deployment and cost competitiveness.

Nigeria has abundant potential for renewable energy such as solar, wind and hydro.

Solar is particularly more attractive due to its cost decrease (60%) over the last few years.

Nigeria’s solar potentials is one of the highest in the world.

Suggested Way Forward

Nigeria’s Renewable energy Potentials

Map showing solar potentials in Nigeria

Nigeria is blessed with abundant solar irradiation.

Solar provides clean renewable energy that can be deployed quickly.

Solar energy can provide life line for businesses especially in rural areas.

Solar can create employment opportunities, curb crime

reduce rural – urban migration.

Nigeria’s Solar Potentials Cont’d

Comparison of Nigeria's solar potentials with selected countries.

Cost of Solar Vs Conventional Grid

The federal government of Nigeria needs to leverage on the private sector to provide much needed capital and expertise to achieve its power sector targets. This can be achieved through the following:-

Re-organising and re-training the Infrastructure Concession Regulatory Commission (ICRC).

Creating a comprehensive and prioritized power infrastructure investment plan.

Identifying power projects that are well suited for PPP. Developing a sound business plan with clear commercial incentives

to attract private capital. Putting in place a sound regulatory scheme and comprehensive PPP

framework.

Leveraging on PPP to Achieve Power Sector

Targets

Selecting the right private sector partners through open, transparent and competitive bidding process.

Tracking performance of PPP projects through continuous monitoring and evaluation.

Cultivating an enabling environment for PPP’s through comprehensive legal, institutional framework.

Establishing a rigorous program management by involving stake holders, standardized communication and reporting system.

Leveraging on PPP to Achieve Power Sector Targets Cont’d

Utility Scale Solar PV Farm

Solar Home System Arrangement

Nigeria has already made a lot of positive initiatives in the power sector through the power sector reform act 2005. The key improvements are :-

Privatisation of government owned power plants.Development of competitive market price for

energy.Establishment of a wholesale buyer called the bulk

electricity trading company.Providing partial risk guarantee for power producers

through world bank assistance.

Power Sector Reforms Cont’d

Power Sector Reforms

Based on the acute power shortage and immediate need to improve the sector, private sector capital and expertise is required.

This can be achieved through pursuing an effective PPP program that incentivises investment in the power sector.

Based on resource availability, competitive cost, environmental friendliness and quick deployment renewable energy especially solar can provide accelerated improvement in the power sector in Nigeria.

Once government set the ball rolling with a few successful projects, it will encourage huge private sector funding, foreign investment and international donor assistance.

Conclusion

Thank You