BPE said weekend that the preferred bidders for PHCN assets would be announced in October, hoping to alleviate chronic electricity shortages holding Nigeria’s economy.
Nigeria plans to sell off 11 distribution and 6 generation companies as part of plans to privatise a power sector rife with inefficiency and corruption. The Bureau of Public Enterprises (BPE) said the 152 potential investors had been sent transaction documents and once bids had been received they would be vetted.
“The announcement of the preferred bidder for the 17 successor companies by the National Council on Privatisation (NCP) will be made on/or before October 23, 2012,” a statement signed by Chukwuma Nwokoh, BPE spokesman, said. BPE has said Nigeria’s economy could be growing at over 10 percent if it solved its power crisis but it would need $15-$20 billion of investment in the next three years.
Nigeria holds the world’s seventh largest natural gas reserves but decades of corrupt governments have chosen to cash in on crude oil rather than investing for domestic power needs. Nigeria only provides its 167 million inhabitants with around a quarter of the amount of electricity used by New York City, leaving those who can afford it to use expensive diesel generators and those who can’t to live without any power.
President Goodluck Jonathan has made reforming the power sector a priority and a significant upsurge in electricity output would bring him support from the Nigerians who have been disappointed with his progress since taking office last year.
Meanwhile Etisalat Nigeria, an affiliate of the No. 2 Gulf Arab operator Etisalat, said a lack of reliable electricity and sabotage were to blame for poor service after the regulator fined telecom firms for failing to meet quality targets. Etisalat Nigeria, Airtel Nigeria, Globacom and MTN Nigeria, a unit of South’s Africa’s MTN, were fined a total of 1.17 billion naira ($7.43 million), according to local media reports.
Etisalat Nigeria said fines averaged $2 million per operator for “non-compliance with the quality of service targets set by the regulator”, according to an emailed statement. “This year alone we are investing more than half a billion dollars in expansion of our network capabilities and capacity,” Chief Executive Steven Evans said.
The company said capacity constraints alone where not to blame for poor service, citing roadworks, sabotage and a lack of electricity as industry challenges. “Foremost among these is the absence of reliable power which necessitates that every one of our over 3,000 cell sites needs to be served by two generators which run 24 hours a day and need regular maintenance and provision of weekly supplies of diesel,” it said.
Nigeria only provides its 167 million inhabitants with around a quarter of the amount of electricity used by New York City, leaving those who can afford it to use expensive diesel generators and those who cannot to live without any power.
The country’s power ministry has said it is confident privatisation in the sector will be completed by October and current power output of under 4,000 megawatts can be boosted to 6,000 by the end of the year and 10,000 by the end of 2013.
UAE’s Etisalat owns a 40-percent stake in Etisalat Nigeria, which launched services in 2008 and had 10.75 million mobile subscribers at the end of 2011, data from the regulator showed. This gave it a mobile market share of 11.9 percent, behind MTN Nigeria’s 46 percent and Globacom’s 22 percent. Airtel, a subsidiary of India’s Bharti Airtel, had a 19.9 percent share. Etisalat’s network covers 74 percent of Nigeria’s population, according to its parent firm’s 2011 annual report, up from 59 percent a year earlier.