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Growth & Development Asset Management Limited (GDL), Mr. Kola Ayeye, has emphasized the need for the Central Bank of Nigeria (CBN) and commercial banks to collaborate with the Nigerian Electricity Regulatory Commission (NERC) to reposition the power sector for a quantum leap in performance.
He said it is time to admit the failure of the last power privatisation exercise, and recommended a new program where NERC, CBN and banks should, on a competitive basis, invite a global player in the caliber of GE (General Electric) or such similar player to commit to generate, transmit and distribute a minimum of 20,000 mw daily within five years, increasing same to 30,000mw daily by the 10th year.
Ayeye, speaking at an interactive forum in Lagos said: “We will be contracting to pay for power successfully delivered to the consumer rather than contracting for the execution of power projects. Execution of power projects has produced very poor results after huge investments in excess of $16billion. The nation has invested massively in power projects with poor results. So we should change the model. Rather than contracting to execute power projects, let’s contract best-in-class players to deliver power. It is not our business how they generate, transmit or distribute the power. They are to deliver the power. They will only get paid for the power they deliver to the consumers. Such big players exist and the size of the Nigerian power market is sufficient to attract them.”
He advocated that the contract with the new concessionaire will be backed with a 10-year payment guarantee for power delivered to the consumer , which will be provided either by AfDB, World Bank or first class international banks.
Ayeye added: “Let us find a partner who will take over available power assets across the entire value chain. But our commitment will be to pay for power delivered to the consumers. This contract will be between $8-12 billion, and is definitely of a sufficient scale to attract a global best-in-class operator.”
