Chineme Okafor in Abuja
The Minister of Power, Works and Housing, Mr. Babatunde Fashola, has said the returns on investments in Nigeria’s electricity market are much more than the challenges it presents to investors and operators already in it and those willing to come in.
Fashola said at the Power Nigeria Exhibition in Lagos that investment opportunities which exist in the market were propelled by its transition from a government controlled and operated sector for 63 years to a government regulated but private sector operated sector in the last three years.
He said the sector and Nigeria remain an investment destination no serious investor would want to ignore, adding that there are challenges which high returns on investment clearly outweigh.
The minister in a statement from his senior communications aide, Mr. Hakeem Bello, in Abuja, thus called on the private sector to embrace the investment opportunities offered by the power market.
“As Mr. President recently remarked in the United States, this is an investment destination that the rational investors cannot ignore. Are there challenges? Yes, there are. Those are the risks of entrepreneurship. But the opportunities and the return on investment clearly outweigh the challenges,” said Fashola.
He noted that one of the challenges in the sector was liquidity which he said the government was laying down adequate steps to address.
According to him, government would provide an environment that would enable the private sector thrive, deepen its investment and contribute to its stock of incremental power.
He said: “Our policies seek to ensure that investors who play by the rules will recover their investments and a decent profit, while we protect consumers from people who want to profiteer.”
Fashola equally said that in the challenges of the sector demands that the Nigerian public know what was going on, and commitments put in to address them.
He reiterated government’s commitment to and focus on improving the sector to expeditiously stimulate the economy back to growth and inclusion.
He also asked Nigerians to be mindful of the fact that the sector’s transition was less than three years, and so must manage their expectations for results within the context of the unfruitful power experience of 63 years.
The minister described the approach the government plans to adopt in solving the challenges within the sector, saying, it would start from getting incremental power from all sources: solar, coal, hydro, gas, bio-mass, nuclear, wind and whatever is possible.
He said there was a gradual and sustained progress in this regard in spite of the setback caused by vandalism and sabotage of power assets.
Fashola also said that the government was aware of the challenges of the sector which include the volatile foreign exchange rates, debts for energy supplied to its Ministries, Departments and Agencies (MDA), as well as collection losses.
“These issues require all operators in the value chain, not only government, to act with a common commitment, with transparency and with candour,” he said, and added that the challenges in the sector were part of the occasional investment risks that make reward worth the venture.
On a recent news report that Nigeria will soon go into total darkness nationwide as a result of debts owed Egbin power station, Fashola said it was incorrect and that the sector does not need a media war between operators about who was the cause of its problems now.
He the report was in bad taste, inflammatory and insensitive to national security, and that efforts were being made to offset debt owed Egbin for power it supplied to the National grid.
“What we do not need are sensational and exaggerated media statements that can cause panic in the industry. That does not solve the problem and neither does it help us serve the people on whose behalf we hold office and whose patronage sustains our businesses.
“What we do not need are unguarded statements that either mislead the public or threaten our national security, because debts are owed. Yes, Egbin is being owed. Egbin had been owed before this administration. But unpaid debts to Egbin or any other operator may lead to the power plant being closed down, which would be regrettable and must be avoided, but it does not mean that Nigeria will be in darkness.
“Leadership positions in critical services such as energy are positions of enormous responsibility which demand some introspection and moderation in public communication.
“What the Managing Director did not tell the newspaper is the number of meetings my ministry and other senior government officials have had with the owners of Egbin, unless he is unaware, which would also raise doubts about what he knows,” he said.