Nigeria signs MoU with GE to set up power plants

Reno News.Net Monday 26th March, 2012

London - Nigeria has signed a $10 billion agreement with US multinational General Electric (GE) to build power plants in the country to produce 10,000 megawatts of electricity in the African nation.

Signing the Memorandum of Understanding (MoU) with GE in London on Sunday, Nigerian Minister of Power, Prof. Barth Nnaji said the proposal is to construct a "series of power plants" in the country with the US multinational as an equity participant.

"In the past, GE only supplied the equipment but now, they will be investing 10 to 15 per cent in equity for every single project. The government will match them in such investment while the private sector will bring the balance," Nnaji told newsmen.

Nigeria had signed a similar MoU with GE in 2009, but the minister insisted that the new arrangement was more detailed in specifics.

"Nigeria is in a hurry to develop the power sector and we can't have a better partner than General Electric," said the minister.

Nigeria is targeting to raise the installed power generation capacity in the country to 40,000 megawatts by 2020. The minister disclosed that the government proposes to tap a small percentage of the National Pension Fund to finance some of the power projects.

"What the pension money is meant for is investment, but you invest in more secure instrument and this project is one of them," the Europe Correspondent of the News Agency of Nigeria (NAN) quoted Nnaji as saying.

Nnaji added that infrastructure, including road tolls and transmission lines, were guaranteed income earners, "because charges accruing from them can fund the borrowed money from the pension fund".

"There are not many projects that are more secure than the power plants; investment in this sector is constant because people must buy electricity, while government provides the guarantee," the minister stated.