28 January 2013 – The Transmission Company of Nigeria (TCN) said on Friday 25th of January that electricity generation in Nigeria during that week reached 4,286 MW.

Its highest level was just over 4,500 MW achieved in December 2012. Meanwhile This Day reports that the on-going privatisation of power assets in the country will attract significant non-oil foreign direct investment (FDI) into the Nigerian economy in the short-to-medium term.

Renaissance Capital has described Nigeria’s power sector reforms as, “the most progressive reforms being undertaken in the country. On the back of this power reform, we expect the sector to become a significant recipient of FDI in the medium term. Separate developments in the sector, including the linking of gas pipelines to gas-fired power stations, has helped push up power supply from 3,500 MW in 2012 to 4,200 MW.

“This increase in power supply from the grid has reduced the amount households and businesses spend on running diesel-powered generators, which has significantly lowered their electricity costs.

“We believe new investments in the sector will boost Nigeria’s generation capacity and rehabilitate existing assets. As the country’s power supply increases and becomes more reliable over the medium to long term, we expect businesses’ cost of production to drop, which will leave them with more capital to reinvest. We believe households’ discretionary income will also increase, on the back of more affordable power supply, which is positive for retailers,” the firm says.

 However, Renaissance Capital argues that any attempt to delay the exercise into 2015, when the next general elections would be held, might result in further complications in the system. “Nigeria’s substantial gas reserves imply that gas-fired power plants are a natural option. They have the added appeal of taking a shorter time to build than coal-fired stations. However, the government has yet to secure a reliable supply of natural gas to realise this goal.

“Despite the guarantees for gas payments offered by the World Bank, oil majors would rather export the gas than sell it locally. Third, the transmission network requires a large investment. In order to achieve the goal of 10,000 MW the transmission network needs huge investment of US$10 billion.”