Nigeria will introduce an electricity pricing regime in November before the government sells distribution companies and allows private investments to build power plants in Africa’s most populous country.
“Pricing and regulatory issues are being sorted out and should be completed next month,” Barth Nnaji, an adviser to Nigeria’s President Goodluck Jonathan, said in an interview on Oct. 8 in Abuja. The government will then be able to provide “the appropriate information to buyers as to what tariffs they can expect,” he said.
The market-determined plan will replace subsidized prices where consumers pay 6 naira ($0.04) a kilowatt, he said.
President Jonathan on Aug. 26 announced a plan to end the state power monopoly and allow private investments in generation. The government will sell 11 distribution units of Power Holding Co. of Nigeria and allow private companies to build gas-fired, coal-fueled and hydropower plants.
Power cuts occur daily in Nigeria, where demand for electricity is almost double the current supply of 3,000 megawatts. The government wants to increase output to 14,019 megawatts by 2013.
Six companies, including Goldman Sachs Group Inc., Standard Chartered Plc, have expressed interest in advising on the sale of the power generation and distribution companies that will be completed by the first half of next year, the adviser said.
An investors’ forum will be held Oct. 14 to Oct. 15 in the capital, Abuja, that will be attended by representatives from General Electric Co., Rolls Royce Group Plc, and companies from China, South Korea and India, Nnaji said.