U.S. Commends Nigerian Authorities on Power Sector Reform

Media Note
Washington, DC
January 14, 2011

 Special Envoy for International Energy Affairs David Goldwyn discussed Nigerian electrical power reform with a Nigerian delegation headed by the Ministry of Power Director Sanusi Garba on January 12, 2010. The meeting served as a follow-up to the U.S.-Nigeria Binational Commission Energy and Investment Working Group held in June 2010. Representatives from the U.S. Agency for International Development (USAID), the U.S. Trade and Development Agency (USTDA), the Department of Energy, the Commerce Department, U.S. Export-Import Bank, and the Treasury Department attended as well as representatives from the Nigerian Presidential Task Force on Power, the Ministry of Foreign Affairs, the Bureau of Public Enterprise, and the Nigeria Electricity Regulatory Commission.

The U. S. government applauds the progress that Nigeria has made over the last 18 months in rehabilitating and reforming its power sector. Nigerian government agencies have invested significant resources into boosting generation capacity and made tremendous progress on key issues of reform. These measures should deliver a ten-fold increase in power generation within ten years, presenting significant opportunities for U.S. companies. The Nigerian government is in the process of tendering operation and maintenance contracts for state-owned power plants; procuring equipment and engineering services to expand its generation and transmission capacity; and privatizing key aspects of its delivery, generation, and distribution system. These reforms also enable Independent Power Producers to play a key role in electrical power generation, which the U.S. government expects to be a strong area of growth for Nigeria.

The U.S. government is committed to assisting Nigeria with these reforms, which will promote Nigeria’s economic growth and the well-being of its people. USAID provides embedded advisors to assist Nigeria’s privatization process, including reviews of vesting contracts, valuation models, and tariffs orders. Other USAID programs provide technical assistance and advice on transmission system improvement, renewable energy development, and the reduction of gas flaring through the development of policy and legal frameworks for a new natural gas infrastructure. USTDA helps Nigerian regulatory authorities establish full cost-recovery tariff for renewable energy and create feasibility studies to support U.S. business interest in the sector. As some of these reforms will take years before results on the ground are realized, we expect to work with Nigerian authorities for the long-term.

The Nigerian government seeks more U.S. participation in its power sector and plans to hold an investor forum to answer questions from interested parties. Qualified U.S. business can receive capital procurement support from the U.S. Export-Import Bank and capital protection from the Overseas Private Investment Corporation.

PRN: 2011/061