FG seeks private sector support to bridge $10bn funding gap in power industry

The federal government has announced plans to leverage the private sector to bridge a $10 billion funding gap needed to ensure a stable electricity supply across the country.

Jobson Ewalefoh, the director-general of the Infrastructure Concession Regulatory Commission (ICRC), spoke on the funding plans after a meeting with Adebayo Adelabu, the minister of power, on Tuesday in Abuja.

The ICRC, in a statement, said the duo agreed that given the funding and technical requirement needed to advance the power sector in Nigeria, it had become imperative to seek private sector input through public-private partnership (PPP) in co-financing and providing expertise that will ensure optimal performance of power infrastructure.

During the meeting, Ewalefoh said the private sector plays a crucial role in revitalising the power sector.

He acknowledged that the challenges in the sector are hydra-headed and go beyond funding alone, adding that with inter-agency collaboration and partnership with the private sector, the limitations can be addressed.

“The investment required in power is very huge and the government cannot fund it alone, so we have to leverage on the financing capacity of the private sector. That is why the ICRC was set up to regulate this leverage,” the director-general said.

Ewalefoh said through its regulatory processes, the commission can “midwife” private sector investment for part of the $10 billion in the power sector to provide regular electricity, attract more foreign direct investment (FDI), and ultimately grow the economy.

“Revamping the power sector requires planning, it involves investments and it takes time. So, we need to collaborate to solve the issues in this sector,” he added.

“The Commission is poised to regulating the processes of attracting investment to the power sector”.

‘PPP ARRANGEMENTS OF BIDDERS THAT DEFAULT WILL BE NULLIFIED’

Ewalefoh said in a bid to accelerate PPP investment as directed by President Bola Tinubu, the ICRC had issued a six-point policy direction which has ultimately streamlined the process of PPP service delivery.

The director-general said although the processes have been streamlined to accelerate project delivery and encourage investors to adopt PPP, the commission is not relenting or compromising on its stringent regulatory function to forestall contingent liabilities or unnecessary delays by companies that lack the requisite capacity.

The ICRC boss also said the commission is insisting on inserting conditions precedent to all PPP agreements such that any preferred bidder that defaults will have their agreement automatically nullified.

On his part, Adelabu stressed the need for collaboration with the private sector, noting that the best way is through concession.

“For us to achieve 24 hours power supply across Nigeria in the next 5 to 10 years, there is a minimum funding requirement of about $10 billion in the next 10 years,” he said.

“The government cannot afford that, when there are other critical sectors in need of funding.

“Can the government do it alone? No! which is why we have to look for or marshal private sector funds while still retaining government interest and ownership. That is where ICRC comes in.”

Adelabu also commended Ewalefoh for the initiative to visit the ministry with the proposal of advancing investment in the power sector through PPPs.