Nigeria’s power system masterplan would require a massive investment of over $20 billion for power generation over the next 20 years, it was gathered at the weekend.
According to a report released by French development agency, Agence Francaise De Development (AFD), Nigeria was already attracting growing interest in power generation.
Titled: “Finance in the Energy Industry”, it noted that country’s power system master plan defined a generation forecast scenario of 10 gigawatts (GW) in 2020, 23GW in 2030 and 28GW in 2035.
The report said some of the levers to achieve this feat include attracting investments through favourable policies, as well as Public-Private Partnerships (PPPs).
According to the report, this will make the procurement and installation of power transmission infrastructure and technology more affordable, help deploy global best practices and capabilities within the country.
The report, however, noted that the sector has continued to see a shift from the traditional electricity supply value chain. It added that the country was well positioned to exploit untapped potential in solar power, biomass, wind power, hydro and geothermal resources and energy efficiency.
It further noted that in order to gain investments in the sector, Nigeria was moving towards intensifying its efforts towards creating robust and functional financial service solutions.
“Venture capital investments are being encouraged as well as the improvement of the legal and regulatory environment, making Nigeria an attractive candidate for international investment,” the report said.
It observed that through numerous reforms, the energy sector has presented itself as one with considerable potential to return high yields on investment and has become a regional energy investment hub.
“The reforms have demonstrated public and private sector commitment to improving the power eco-system through investment, increased competitiveness and deregulation,” it said.
It noted that as Africa’s third-largest economy with growing energy needs that the national grid cannot meet thoroughly or reliably, the power sector requires immediate direct investment.
“Cheap and abundant availability of power is a pre-requisite for economic development, with the potential to have a multiplier effect on growth. The power sector facilitates high capital spending, which promotes investment and builds economic competitiveness,” AFD said.
The agency is, however, optimistic that overcoming the constraints to financing renewable energy projects will go a long way in enhancing electricity supply and creating jobs for generations to come.
Authored By: Chikodi Okereocha
SOURCE: THE NATION