The president also said only 55 per cent of Nigeria’s population have access to electricity.
The Federal Government has said it needs $2.9 trillion (N464 trillion) for infrastructural development in the power sector in the next 30 years (2014-2045), under the National Integrated Infrastructure Master Plan.
It also stated that the energy sector needs $900 billion (N144 trillion) during the period while the power sector needs $10 billion (N1.6 trillion) for generation and distribution in the next five years to add 5,000MW to the national grid. It added that the transmission network needs $1.5 billion (N240 billion) in the next five years.
This was disclosed by President Goodluck Jonathan during the Nigeria Power Financing Conference at the Banquet Hall of the Presidential Villa, Abuja, on Monday.
The conference had as its theme “Private Sector Financing/Support for the Power Sector and Infrastructure”.
Mr. Jonathan, who was represented by Vice President Namadi Sambo, noted that a significant percentage of the funds needed have to come from the private sector, as government alone could not fund infrastructure.
He called on the power sector operators to go an extra mile in providing appreciable power supply to Nigerians by June.
The Federal Government also set up a Power Sector Investment Fund, to enable players in the industry have access to cheap, long term funds to develop the power sector.
“The financial resources for this special Fund will be pooled from the Federal Government, Development Financial Institutions (FDIs) as well as local, global and financial partners” the president said.
He also noted that at present “only 55 per cent of our population have access to electricity. This arises mainly from the fact that Nigeria’s per capita electricity generation is relatively one of the lowest in global terms.”
Mr. Jonathan noted that the electricity supply from the national grid still remains as low as 50 per cent. He said in order to meet the strategic national economic growth and developmental goals, as encapsulated in the Vision 20:2020 and the Transformation Agenda, decisive and courageous measure to work towards a 40,000MW target in the years ahead needs to be taken.
In order to provide avoidable refinancing services to the power sector, the president said the federal government will make an initial deposit of N300 billion to the Power Sector Intervention Fund while urging participants at the conference to join hands towards the success of the endeavour.
He also noted that government was making new investments in conversion of coal to power; as well as in renewable energy such as solar, wind, hydro power plants, and major gas infrastructure. He said huge investments are made in other sectors of the economy such as building road network, telecommunications, railways, water resources, aviation and agriculture.
He added that “it is obvious that government alone cannot fund the infrastructural deficit in Nigeria, especially given the trend in the global economy”.
Commending the participation of the Nigerian private sector whose effort ensured the raising of over $2.5 million (N400 million), Mr. Jonathan said government will continue to work with the private sector as drivers of economic growth.
Earlier, the Minister of Power, Chinedu Nebo, said the conference was to come up with a financing framework that would meet the financial policy and requirement for the sector, saying there was a transition from the dominated, monopoly of government to vibrant participation and transparent but regulated market of the private sector.
In her remark, the Coordinating Minister of the Economy and Minister of Finance, Ngozi Okonjo-Iweala, gave a background of economic growth and assured that the returns in 2014 would be greater than that of 2013. She added that the country’s economic fundamental is stronger and is good for the investor especially with 7.9 growth from non-oil sector; single digit inflation and efforts by government to diversify the economy from oil.
The Minister of Trade and Investment, Olusegun Aganga, gave a presentation of what the investor expects from the huge market in the country with strong regulatory body such as National Electricity Regulatory Commission, NERC, and opportunities from gas, oil, coal, solid minerals, etc.
Goodwill messages were also taken from heads of delegation from different countries and financial institutions. About 308 participants from across the world participated in the conference.