FG seeks new investors for power sector, set to divest from privatized firms

The Federal Government says  the privatised power sector  will open up for new investment process to enable  new investors invest  further  in the development of the sector.

The Minister of State for National Planning, Mrs Zainab Ahmed, said this in Abuja on Friday, adding that the plan by government became necessary given the challenges in the sector.

“The power sector has been privatised, but I am sure that every Nigerian will testify that the privatisation has not worked out well. What we set to achieve in terms of the development of the power sector has not yet happened.

“We have now come to a point where government, which is a shareholder in power sector, and the investors must come together and decide  to cede some of their holdings  to the fresh investors .

“The ceding of the holding to the fresh investors will enable them to inject new funds and new expertise to enable us to grow the power sector the way that will serve Nigerians.

She said the process would involve government negotiating with the existing owners  and  deciding  the right  level of holding that would go for another round of sale.

She said that the opening of the power sector would also entail  the review of  tariff “to the extent that we said that the power sector will be opened up to a new investments process.

“It is very clear that no new investor will be  coming without  having a satisfaction of the level of tariff that will  be attained in the industry.

“That will be a discussion that will be heard with the new investors; it is very clear to us that the level of tariff that we have now is not sustainable.

“ But where the tariff  will go will be a subject of negotiation between government, existing investors, the new investors and the consumers; so we try to attain  an optimal  level, but there will be an impact on  the tariff.“

She, however, said that  the starting point for the review of the entire process would be  the Distribution Companies (DISCOs), adding that distribution of electricity was most pressing.

On government borrowing, she said that government did not go and borrow at 21 or 22 per cent.

According to her, the market actually  determines  the  point  of  government borrowing .

“The point we are making is that because the government is borrowing heavily, the financial sector is now concentrating on borrowing to government,  and the private sector gets little or no attention.

“So government must reduce its level of domestic borrowing  to free the space so that the financial sector is able to borrow to the  private   sector.“

 

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