The Nigerian Power Sector Industry Review July 2014.

The Nigerian Power sector is arguably the most popular source of attention from the Nigerian population, as it has recieved quite a lot of attention in recent times, especially since the recent move on privatisation of the sector. The current reform has seen the privatization of underperfoming assets in the sector, purchased by Major players in the Nigerian and Global Business scene.

The privatised companies are in 4 major categories.

Off-Grid generation Companies (these companies generally generate under 15MW)
Grid-Connected Companies
Distribution Companies
Embedded grid Companies

The power sector reform has led to the licensing of 22 companies all within the above 4 categories. The Nigerian government expectsto add 6,100MW from these Independent contractors.major Players among these contractors are

Knox J&L Solutions. (Grid-connected)
The firm entered a joint venture agreement in 2011 with PGI Energy, a foreign firm to develop a 1000MW power plant in Ajaokuta, funded by a US-based investment bank Pythagoras group.

Azura Power Holdings. (Grid-connected)
Otherwise known as Azura-Edo IPP, the company is working on developing a 500MW power plant in the outskirts of Benin City Edo State.

Bresson AS Nigeria. (Grid-connected)
The company and its power plant situated in Magboro, Ogun state is set to generate 90MW at its launch ion 2015.

Surely, since most of these companies are situated in Ogun State, it is evident that there are major plans to capture the LAgos market/demand for electricity. if this is done we are set to see some lower prices in the prices of some service commodities, or otherwise we can expect growth in these service companies, which would use the extra profit to expand market territory keeping their prices stable, there are short-comings though to keeping prices stable; since operating costs are lower entrants may take adavntage of these lower operating costs to set lower prices.

Another effect of the Lagos-centered approach to business, is that electricty is still not being spread among the rural population, which comsist of about 49%(86 mn) of the current Nigerian population with only 10% (8.2mn) of that population having access to electricity, this might depress rural population and lead to even more rural-urban migration. Watch out Lagos, population is set to increase!

Given the current realities and population growth rate (urban and rural) as well as rising demand for power, can the National Grid system sustain demand for electricity? Can it sustain Nigeria for devlopment?

Share on Google Plus

About Unknown

This is a short description in the author block about the author. You edit it by entering text in the "Biographical Info" field in the user admin panel.