2014-01-09 07:43:02 - Nigeria Power Report Q1 2014 - a new market research report on companiesandmarkets.com
In a move that indicates Nigeria´s power sector could be on the verge or realising some of its considerable potential, state-owned Power Holding Company of Nigeria (PHCN) has ceased to exist after the federal government handed ownership of successor companies to the private sector. This is hugely significant for Nigeria as it attempts to draw vast sums of private investment into the power sector - so as to meet surging demand for electricity and support rapid economic growth. That said, although we have long felt that the future of Nigeria´s power sector will depend on the success of the privatisation process, we remain cautious. Capacity expansion will be gradual and will remain subject to considerable risks and delays. While significant
demand for electricity undoubtedly exists, disputes over tariffs, gas shortages and concerns about the country´s business environment could all weigh on investment.
The unbundling of PHCN eight years after laws were passed to facilitate the process marks a significant point in the development of the Nigerian power sector and is likely to pique the interest of foreign investors.
The buyers of the five generation companies and 10 distribution firms (two remaining unbundled companies are still to be handed over, while Transmission Company Of Nigeria is still government owned) collected their share certificates and operating licences from President Goodluck Jonathan at the beginning of October 2013 and took full control of their assets in November 2013 - with many looking to ramp-up capacity and attract foreign investment.
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