By Stella Odueme
The Federal Government is seeking to attract an additional $19 billion in investments into Nigeria's electricity sector through alternative financing arrangements to bridge infrastructure gaps and improve power supply.
The Managing Director and Chief Executive Officer of FGN Power Company Limited, Mr Kenny Anuwe, disclosed this on Thursday at the sixth annual conference of the Power Correspondents Association of Nigeria (PCAN) in Abuja.
Speaking on the theme, "$1 Trillion Economy: Nigeria's Roadmap to Reliable and Affordable Power Supply," Anuwe said the government could no longer shoulder more than 95 per cent of new infrastructure investments in the power sector.
He described the existing funding structure as unsustainable, stressing the need to create an enabling environment for private investors and institutional financiers to participate more actively in electricity infrastructure development.
According to him, FGN Power Company is targeting a $2.3 billion project, with $1.3 billion expected from Europe and $1 billion from China.
He also disclosed plans to strengthen the company's capital base to at least $1 billion, adding that the Africa Finance Corporation (AFC) had indicated its readiness to match the amount.
Anuwe said the company was seeking to mobilise another $18 billion from other financiers for investments across the electricity sector.
He explained that the funds would not necessarily come directly to FGN Power Company but would be channelled into the sector through investment models capable of accelerating infrastructure development.
The FGN Power chief advocated a shift from the traditional reliance on government funding, sovereign guarantees and 15 per cent Federal Government counterpart contributions to viability gap financing and blended finance.
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He said such arrangements would encourage institutional investors and private capital to support electricity infrastructure projects.
On government interventions, Anuwe disclosed that more than N10 trillion had been invested in the electricity sector since privatisation, noting that the industry would have struggled to remain operational without government support.
He, however, maintained that the investment was still inadequate compared with the country's electricity needs.
On infrastructure development, he said the Presidential Power Initiative, implemented through FGN Power Company, was coordinating stakeholders, structuring commercial agreements, securing financing and delivering additional electricity capacity.
He disclosed that the Federal Government had invested approximately $237 million in transmission infrastructure under the current administration, covering 16 transmission lines spanning about 606 kilometres.
According to him, the projects are expected to deliver cumulative capacity improvements of slightly more than 7,000 megawatts.
Anuwe added that the company had also established structures to support investments in electricity distribution, although overlapping responsibilities with another government agency had posed implementation challenges.
He said FGN Power Company remained willing to support distribution companies prepared to participate in its investment programme.
He identified 5,540 megawatts of additional capacity by 2029 and at least 60 per cent improvement in electricity supply reliability compared with current grid performance as key targets.
Earlier, the Minister of Power, Chief Joseph Tegbe, who chaired the conference, said the Federal Government was addressing longstanding financial and infrastructure challenges in the electricity sector as part of efforts to achieve President Bola Tinubu's ambition of building a $1 trillion economy.
Tegbe said reliable, affordable and commercially sustainable electricity was fundamental to industrialisation, increased productivity and economic growth.
He noted that President Tinubu had approved a N3.3 trillion plan to settle verified legacy debts owed to electricity generation companies, adding that N1.23 trillion had so far been raised under the initiative.
According to him, the intervention is expected to ease financial pressures on generating companies and improve their capacity to pay for gas and maintain their power plants.
The minister said the administration recognised that electricity was not the only constraint to business growth but remained a critical factor that multiplied the impact of other economic challenges.
He stressed that Nigeria's ambition to become a one-trillion-dollar economy must be driven by production rather than consumption, with dependable electricity serving as a major foundation.
In his welcome address, the Chairman of PCAN, Mr Obas Esiedesa, said the annual conference had evolved since its establishment in November 2021 into an important platform for engagement among policymakers, regulators, operators, investors, industry experts and journalists.
Esiedesa said the conference was designed to examine challenges confronting the electricity industry and develop practical recommendations for reliable, affordable and sustainable power supply.
He identified the recurring seasonal decline in electricity generation between November and March as a major concern, attributing it to reduced water inflows into hydroelectric power stations and gas supply constraints affecting thermal plants.
He called for stronger collaboration among government agencies, regulators, generation companies and gas suppliers to ensure adequate gas feedstock for thermal power plants, particularly during periods of reduced hydropower generation.
The PCAN chairman also highlighted inadequate transmission and distribution infrastructure, liquidity constraints, investment gaps, regulatory uncertainties and operational inefficiencies as challenges requiring urgent attention.
On the decentralisation of the electricity market under the Electricity Act 2023, he said the reforms presented opportunities for increased investment and improved service delivery but required effective coordination, clear regulatory frameworks and adequate infrastructure.
He urged participants to move beyond identifying the industry's problems and develop practical recommendations capable of informing policies, attracting investments and improving electricity supply.
Esiedesa also commended the minister, FGN Power Company chief, sponsors, partners and members of the conference planning committee for their contributions to the success of the event.
He reaffirmed the responsibility of power journalists to provide accurate information, hold institutions accountable and promote constructive engagement towards the development of the electricity sector.
The sixth annual PCAN conference brought together key stakeholders in the Nigerian electricity supply industry to deliberate on financing, infrastructure development, market reforms and strategies for achieving reliable and affordable electricity supply.