Privatisation of the Nigerian power industry is a “little past the midpoint and is going well”, according to Peter Kieren, President & CEO of CPCS. The process was launched about six years ago when the application for private investment was launched. The utility has been broken up in to 18 companies-11 are distribution, six are generating companies and there is one transmission system which will be controlled under a management contract.
The successful bidders have just been announced and have six months to reach financial closure. They will then be transferred to the private sector. There has been a lot of local involvement but the lack of local capacity in terms of technical operations of plants, have limited involvement on a larger scale. Bidding groups have been asked to employ substantial corporate experience. Companies can bring this in via their equity partners or otherwise enter in to a long term technical agreement with another utility.
This creates a good opportunity investment for the locals. Mr Kieren says the biggest challenge will be in distribution where a great deal of fraud exists.