The lack of cost-reflective tariffs is discouraging investments in the ailing Nigerian electricity sector, a firm involved in power generation in the country has said.
“Azura now owns Tobene 100 per cent,” disclosed Mr Okeke. Before now, the infrastructure was jointly developed by Melec PowerGen and the International Finance Corporation, which held 90 and 10 per cent stakes, respectively. Tobene has a 20-year power purchase agreement with the national utility, Senelec, for the supply of power.”“We won’t state the amount invested as that’s commercially sensitive,” Mr Okeke said.
“We thought the EPC contractor would just move to the next phase without demobilising,” he said. “But because of the Nigerian environment, rather than looking at phase II , Azura is now investing in another country .” Most of Nigeria’s electricity sector was privatised in 2013 but the government still heavily subsidises the sector to cover shortfall resulting from poor revenue collection.Industry operators complain the tariff is low and not cost-reflective. That, as well as energy theft, means DisCos often collect far lower than the invoices for the energy generated by the GenCos, like Azura.
Actually it's mainly lack of reliable data affecting investment. You first have to have reliable information to know if the tariff is cost effective or not.
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