President Goodluck Jonathan has informed investors at the Nigeria Power Investors Conference in Abuja that a total investment of $900 billion (about N144 trillion) is needed over a period of 30 years to develop Nigeria's energy sector.
The conference with the theme "Private sector financing/support for electric power and infrastructure development in Nigeria" had in attendance over 1,000 people with about 310 delegates from 29 countries, including a 60-man delegation from the United States led by the deputy assistant secretary of state for energy transformation, Dr Robert Ichord.
Speaking at the event at the Banquet Hall, Presidential Villa, Abuja, Jonathan disclosed that under the National Integrated National Infrastructure Master Plan, the country needs a total of $2.9 trillion for infrastructure developmental efforts in the next 30 years, which is between 2014 and 2045.
But the energy sector alone needs an infusion of about $900 billion during the period, and a significant percentage is expected to come from the private sector, the president, who was represented by Vice President Namadi Sambo, said.
According to Jonathan, the sector needs about $10 billion for capital expenditure of generation and distribution companies in the next few years to enable the nation add additional 5,000mw.
The president also said the transmission grid requires an annual investment of about $1.5 billion for the next five years to ensure its reliability and stability.
He said: "Under our National Integrated National Infrastructure Master Plan, we need a total of US$2.9 trillion for our infrastructure developmental efforts in the next 30 years, i.e., 2014 - 2045. The energy sector alone needs an infusion of about US$900 billion during the period. Of this, a significant percentage is expected to come from the private sector.
"The power sector alone needs about US$10billion for CAPEX of generation and distribution companies in the next few years in enabling us add additional 5,000mw. Similarly, our transmission grid requires an annual investment of about US$1.5billion for the next five years to ensure its reliability and stability."
The president, who admitted that government alone cannot fund the infrastructural deficit in Nigeria, said the conference is intended to showcase the opportunities in Nigeria which has become a destination of priority for foreign direct investment (FDI).
"To enable industry players have access to cheap long-term funds, government is hereby setting up a 'Power Sector Intervention Fund'. The financial resources for this special fund will be pooled from the Federal Government, Development Financial Institutions (DFIs) as well as local and global and financial partners.
"On its part the federal government will make initial deposit of N300billion and I call on all participants to join hands towards the success of this endeavour. That is why it is expected that today's event will come up with practical funding strategies and help to facilitate the unlocking of the much-needed capital for our infrastructural development," Jonathan stated.
He also called on the new operators of the sector to redouble efforts in ensuring the stabilisation of power supply in the months ahead. "While expecting that this requires time for both planning and sourcing of the needed resources, you must realise that Nigerians are looking unto you to go the extra miles in ensuring that visible and appreciable results are beginning to be seen by the end of June this year," the president said.
In his remarks, the vice president of the African Development Bank (AfDB), Mark Chavelo, revealed that the bank has provided $380 million to support private sector participation in the Nigerian power sector, adding that the bank was also releasing another $3 million to support private sector capacity development.
Also speaking, the representative of Nigerian bankers, managing director of Diamond Bank Plc Alex Otti disclosed that by December 2013 the total investment portfolio of Nigerian banks in the power sector stood at about N750 billion, while assuring that the banks were ready to lend more "as the business makes sense".
For his part, the US deputy assistant secretary for energy commended Jonathan's administration for the success of the power sector privatisation. He reiterated that Nigeria is a very strategic partner of the US and pledged America's continued support for the power sector.
He urged investors to seize the opportunity to invest now, noting that the future markets in power are in the emerging countries of which Africa is going to be one of the leaders. He said about 80 per cent of the electricity market in the future will come from the continent.
"These opportunities are enormous. When President Obama launched the Power Africa Initiative last year, he recognised this fact... We are putting together a strong team in Nigeria to work and to try to focus on encouraging and promoting investment in the country," Ichord said.
He observed, however, that necessary frameworks like the Bulk Trader and the regulator were critical to the success of the process, even as he pointed out that improvement in distribution comes from efficient collection of revenue as well as availability of gas to power.