FG to Invest $150 Million Into Rural Electrification Projects

By November 17, 2016 Investment News

Minster of Power, Works and Housing, Babtunde Fashola, has said that the federal government is ready to invest up to $150 million in rural electrification projects.

He was speaking in Abuja at a business forum on ‘’Financing Opportunities in the Nigerian Power Sector’’

Fashola disclosed that government plans to use 44 tertiary institutions and small hydro dams in the rural areas as anchors for the electrification Programme.

He explained that the money would be deployed towards providing Independent Power Plants, IPPs, to supply electricity to tertiary institutions and rural communities.

The minister also said that 37 out of the 44 tertiary institutions to be used for the project were universities, while the other seven were teaching hospitals.

According to him, government would deploy 37 IPPs consisting of nine gas plants and 28 solar plants with a combined generation capacity of 120 Megawatts to power the institutions.

The IPPs will replace more than 1,000 generating sets that have been serving the institutions, generating 210 Megawatts of inefficient and unclean energy.

Fashola said that the $150 million would cover capital expenditure, operations and maintenance cost of the IPPs.

The former Lagos State governor also stressed the need for financing and liquidity stability in the power sector.

He said that electricity Distribution Companies, DisCos, “need a lot of operating capital to buy meters, to change transformers that are old, to extend access to their customers, to replace transformers and so on and so forth.”

“They need operational capital and they need it in the mix of foreign exchange because some of the things they want to buy are not made in Nigeria and there are some made in Nigeria,” the minister said

For the Generating Companies, GenCos, Fashola said adequate liquidity was need for the procurement of turbines, parts and accessories which were largely imported.

He added however that investment in the GenCos was profitable, as the returns would be marvelous by the time the market is settles and stabilises.

“There exists a list of endless possibilities and opportunities for investment in the nation’s power sector,” he said.

Fashola also stated that the Nigeria Buck Electricity Trader, NBET, a government-owned company, was planning to raise a bond for investors to buy into it.

Source: <ICIR Nigeria>