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Monday, September 22, 2014
Nigeria plans to inject a serious amount of funds to bail out its power sector. According to the country’s oil minister, Diezani Alison-Madueke, the government will spend $1.3 billion on a bail-out package for power companies.
Nigeria privatized its power sector last year in an attempt to end decades of debilitating power shortages, but some of those private companies are already running into financial troubles. The difficulties are tied to debts left by the state power company and the fact that Nigeria’s regulated prices do not allow for a profit.
“The federal government through the CBN (central bank) … will provide a total financial facility of 213 billion naira ($1.3 billion) to the power sector to settle both their legacy gas debts and also the shortfall in revenues to the power sector since the handover … on November 1 2013,” Alison-Madueke said in a statement. “The electricity market … operators will repay this financial facility with a first line charge on their revenues over a period of 10 years,” she added.
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