The Acting Director-General of the Bureau of Public Enterprises (BPE), Mr Benjamin Ezra Dikki, has advised electricity consumers to expect higher electricity tariffs soon.
He made this statement during at the signing of the Transaction and Industry Agreements (TIA) for the successor companies of the Power Holding Company of Nigeria (PHCN) which effectively handed the companies over to the successful bidders in the privatization exercise.
He added that Nigerians should be willing to accept the increase in electricity tariffs as the privatization exercise in the power sector draws to an end, noting that the tariffs hike would only be in the short term as massive investments in the sector were bound to cause the tariffs to fall in the long-term.
He made a comparison with the crash in the price of SIM cards in the telecoms sector, as a result of competition and investments in the industry, adding that the same development would unfold in the power sector.
The acting BPE DG described the signing ceremony as the beginning of a voyage, stressing that there was still the need for route charting, navigation and steering in the right direction.
Also speaking at the signing ceremony, the Managing Director of CMEC, the successful bidders for Sapele Power Plant, one of the unbundled PHCN companies, Mrs Heather Onoh, said it would take the company at least six months to rehabilitate parts of the Sapele Power Plant as the parts were badly managed and 12 months to completely rehabilitate the power plant.
CMEC had purchased the Sapele Power Plant for $201million.
Also speaking at the signing ceremony, the Chief Executive Officer, Transcorp/Woodrock, the consortium that won the bid for Ugheli Power Plc, Mr. Tony Elumelu, said with the signing of transaction and industry agreements for the Power Holding Company of Nigeria’s successor companies, the stage was set for the citizens to enjoy uninterrupted power supply.
He made this statement shortly after his company signed a Power Purchase Agreement with the Nigerian Bulk Electricity Trading Company Plc.
The NBET signed similar agreements with five other firms in respect to Geregu Power Plc, Sapele Power Plc, Kainji Hydro Electric Plc, Shiroro Hydro Electric Plc and Egbin Power Plc.
“Today is a very significant day for Nigeria, significant because this is the issue of public-private partnership in action. The government of President Goodluck Jonathan promised Nigerians that they will have power, let there be light and with what we are doing today, there is going to be light,” Elumelu said.
He said it was his firm’s conviction that once the country could get its power sector right, economic and social development would follow.
“We believe that power is so significant for the economic development of the country; not only economy, but also social development of the country. When we get power right, it will lead to the development of Nigeria’s economy and will touch the society in so many other areas,” he added.
Meanwhile, following the full privatisation of the PHCN, the Federal Government and the successful bidders for 10 generating companies (GENCOs) and five distribution companies (DISCOs), on Thursday, signed sale and purchase agreements on their handover.
Speaking at the occasion, Vice-President Namadi Sambo, who was represented by the Minister of Power, Professor Chinedu Nebo, described the event as “important landmark,” saying it marked important milestones in the ongoing reform of the Nigeria electricity supply industry.
The vice-president thanked the World Bank for “its support towards making these agreements bankable, through the provision of Partial Risk Guarantee credit support instrument.”