Nigeria has offered to sell a major power station to the Chinese engineering firm that has upgraded the plant, the privatisation agency said, as it aims to end power shortages that are the biggest brake on economic growth.
Africa’s most populous nation is privatising the bulk of its power sector to help increase electricity output
Africa’s most populous nation is privatising the bulk of its power sector to help increase electricity output by 10 times by 2020, although President Good-luck Jonathan’s plan laid out three years ago is running behind schedule.
State-owned China Machinery Engineering Corporation (CMEC) completed the second phase of the Omotosho power plant in southwest Nigeria last month, taking total output from 375 megawatts (MW) to 500 MW.
This represents more than 10 per cent of the West African country’s total capacity.
Nigeria wants to sell the plant to CMEC for $217.5 million (€170 million), although $104 million (€81 million) would be offset against debts the Government owes CMEC and a further $30 million (€23 million) would be kept for further work to be done by the Chinese firm, the Bureau of Public Enterprises said in a statement yesterday.
China has made a number of loans in recent years to Nigeria to fund projects including a railway, aviation works, roads and power plants such as Omotosho, cementing its relationship with the energy-rich African country and also subsidising its construc-tion industry.
Nigeria is now offering to sell the plant partly to pay back the loan. Industry experts also say power assets will be better managed and produce more electricity in company hands.
The Nigerian Government is breaking up the dysfunctional state electricity provider into 15 firms handling generation or distribution in different parts of the country.
All of the preferred bidders for the firms that Nigeria is privatising met a deadline last week to pay a quarter of their bids, a landmark step in the energy updating process .
Although Nigeria holds the world’s ninth largest gas reserves, its total power out-put is around 4,000 megawatts.
South Africa, by comparison, produces about 10 times the power for a population equal to about a third of Nigeria’s.