The Nigeria Vice President made the statement in Abuja on Thursday.
The Federal Government said on Thursday that the unbundling of the Power Holding Company of Nigeria (PHCN) would speed up the restructuring of the power sector and ensure stable electricity supply in the country.
Vice President Namadi Sambo said this on Thursday at the signing of the Transaction and Industry Agreements for PHCN successor companies held at the Banquet Hall of the Presidential Villa, Abuja.
The vice president, who is also the chairman of the National Council on Privatisation (NCP), was represented by the Minister of Power, Chinedu Nebo.
According to Mr. Sambo, the privatisation of the power sector is not an end in itself but a strategy for ensuring efficiency in service delivery.
“The privatisation of Gencos (generation companies) and Discos (distribution companies) created out of the unbundling of PHCN is one of the cardinal foundations of the restructuring of the industry.
“We are here today to witness the execution of Share Purchase Agreements between the Bureau of Public Enterprises and the preferred bidders of the companies. Today marks the beginning of a new dawn for the power sector. For the international community and local investors here present, the Nigerian power sector is open for business,” he said.
Mr. Sambo said the Federal Government would take all necessary steps to ensure that the expectations of Nigerians in the power sector were achieved.
He noted that the signing agreements marked several important milestones in the ongoing reform of the electricity industry in the country.
He recalled that before the onset of the current restructuring of the industry, supply of natural gas to PHCN legacy power plants by the Nigeria Gas Company (NGC) Ltd was predicated on ‘best endeavor basis’ as there were no binding contracts between suppliers and consumers.
“Arising from this very fluid situation, consumers of gas experienced frequent incidences of condensate in the pipeline resulting in stoppages and breakdown of gas turbines.
“On the flip side of the arrangement, gas suppliers had no long term commitments on which to make strategic plans for future supplies,” he said.
Mr. Sambo, however, assured that with the signing of the Gas Supply and Aggregation Agreements between Geregu, Sapele, Ughelli power plants and their respective gas suppliers, the country had been positioned to move away from the challenges of the present era.
He said that the signing of Ancillary Agreements between generation companies and the Transmission Company of Nigeria would pave the way for “compensation to providers of services such as black start, spinning reserve and frequency support”.
The vice president expressed gratitude to the World Bank for its support towards making the agreements bankable through the provision of Partial Risk Guarantee credit support instrument.
He also expressed gratitude to the Nigeria Infrastructure Advisory Facility (NIAF) for its technical support to the successor companies in negotiating the “very complex gas agreements”.