Privatized Power Holds Opportunity in Nigeria, First Bank Research Reveals

A research by First Bank has revealed that privatized power in Nigeria, holds opportunity for investors and consumers. In its Research Weekly publication, the Bank submitted that “the inherent potentials in power distribution business in Nigeria was also based on recent reports that distribution companies generated N189 billion ($1.18 billion)  a year to date as at May 2013.” It also said, “These inflows could indeed be a tip of the iceberg as the reforms are still ongoing. If and when power is made available, adequate, reliable and perceived to be priced and delivered in a transparent and fair manner – these collections could be significantly larger. Consumers are currently bearing a considerable opportunity cost in terms of the opportunities lost and or the resources allocated to the generation of alternative power supply which is invariably more expensive. “The reforms are ongoing but seem to be riddled by quite a number of setbacks some of which have been identified as inadequate supply of gas, incessant allegations of sabotage and vandalisation – which is quite similar to the reports of sabotage in the oil and gas sector. The metering deficit should hopefully be partially addressed by the Credited Advanced Payment for Metering Implementation (CAPMI). If the reforms are assiduously implemented in a manner in which the residual risks are manageable and the viability of the industry can be properly assessed then the industry would be well supported by the financial services sector.”