June 13, 2008 / 10:01 AM / 11 years ago

UPDATE 2-Nigeria president to call emergency on electricity

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By Estelle Shirbon

PARIS, June 13 (Reuters) - Nigerian President Umaru Yar’Adua said on Friday he would declare a national emergency next month over his country’s decrepit power infrastructure, one of the main brakes on growth in Africa’s most populous nation.

Yar’Adua promised when he took office just over a year ago to declare such an emergency but has since said he was waiting for two committees, set up to investigate mismanagement by his predecessor, to report back first.

Nigeria’s power crisis has become so severe that much of the country has been without mains electricity for weeks, plunging neighbourhoods without private generators into darkness every night and heightening frustration among its 140 million people.

“Next month I am going to declare a national emergency in the power sector,” Yar’Adua told a gathering of French businessmen during a trip to promote investment in his country.

He said that the Nigerian federal and state governments would together invest $5 billion over three years in generation, transmission and distribution of power but the government was also looking to raise private funding for the industry.

“We will seek financing from international consortiums and financial institutions that can come and partner with us to finance the rehabilitation and expansion of this infrastructure,” he said.

Under Yar’Adua’s predecessor Olusegun Obasanjo, Nigeria unbundled its state electricity company into a grid, six generation firms and 11 distribution companies as a prelude to privatisation, but that last stage was never reached.

Yar’Adua said that after the initial three-year programme of state investments under the power emergency, the intention was the complete the privatisation of the sector.


Despite being the world’s eighth-biggest oil producer, Nigeria has a generation capacity of about 3,000 megawatts (MW). South Africa, with a third of the population, has more than 10 times that capacity.

Yar’Adua said last month that the emergency period would last until the country was able to generate about 10,000 MW of electricity, which he expected to take until 2011.

On Friday, he said Nigeria’s target was to increase generation to 40,000 to 50,000 MW by 2020.

Responding to a French banking executive who was citing the example of Dubai raising money for infrastructure investment through a sovereign fund, Yar’Adua said that Nigeria was also looking for ways of bringing private money into infrastructure.

He said that under a previously announced restructuring of the crude oil production industry, the national oil company NNPC would start sourcing funds for its joint venture operations with foreign firms from bodies like sovereign wealth funds.

“Some of the institutions you have mentioned, like sovereign funds in Dubai, we are talking to them to provide part of the financing for cash call operations for the joint ventures the NNPC carries out with international oil companies,” he said.

Funding shortfalls at the joint ventures between NNPC and Royal Dutch Shell (RDSa.L), ExxonMobil (XOM.N), Chevron (CVX.N), Total (TOTF.PA) and Agip (ENI.MI) are one of the reasons why Nigeria has struggled to increase its oil production capacity.

One of the other reasons is frequent attacks and sabotage in the Niger Delta, Nigeria’s oil heartland, where the government has been unable to stop militants, ransom seekers and crude oil smugglers from disrupting the oil industry.

For full Reuters Africa coverage and to have your say on the top issues, visit: africa.reuters.com/ Writing by Francois Murphy and Estelle Shirbon, editing by Nick Tattersall

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