The Federal Government says the privatised power sector will open up for new investment process to enable new investors invest further in the development of the sector.
The Minister of State for National Planning, Zainab Ahmed, said this in Abuja.
Ahmed said the plan by government became necessary given the challenges in the sector.
Ahmed said: “The power sector has been privatised, but I am sure that every Nigerian will testify that the privatisation has not worked out well.
“What we set to achieve in terms of the development of the power sector has not yet happened.
“We have now come to a point where government, which is a shareholder in power sector, and the investors must come together and decide to cede some of their holdings to the fresh investors.
“The ceding of the holding to the fresh investors will enable them to inject new funds and new expertise to enable us to grow the power sector the way that will serve Nigerians.”
Ahmed said the process would involve government negotiating with the existing owners and deciding the right level of holding that would go for another round of sale.
She said that the opening of the power sector would also entail the review of tariff “to the extent that we said that the power sector will be opened up to a new investments process”.
Ahmed said: “It is very clear that no new investor will be coming without having a satisfaction of the level of tariff that will be attained in the industry.
“That will be a discussion that will be heard with the new investors; it is very clear to us that the level of tariff that we have now is not sustainable.
“But where the tariff will go will be a subject of negotiation between government, existing investors, the new investors and the consumers; so we try to attain an optimal level, but there will be an impact on the tariff.”
Ahmed, however, said that the starting point for the review of the entire process would be the Distribution Companies, adding that distribution of electricity was most pressing.
On government borrowing, she said that government did not go and borrow at 21 or 22 per cent.
According to her, the market actually determines the point of government borrowing.
Ahmed said: “The point we are making is that because the government is borrowing heavily, the financial sector is now concentrating on borrowing to government and the private sector gets little or no attention.
“So, government must reduce its level of domestic borrowing to free the space so that the financial sector is able to borrow to the private sector.”