Lagos, Nigeria seeks investors to build a 4,000-MW gas-fired electricity plant

Lagos, Nigeria's commercial hub, invited bids on Thursday for the construction of gas-fired power stations of up to 4,050 megawatts (MW) to fill a shortfall in the national grid. The city is hoping to put an end to years of blackouts which have affected businesses and homes.

According to the World Bank, four out of ten Nigerians, Africa's largest nation, lack access to electricity. This is often cited by investors as a major obstacle to investing in Nigeria.

Lagos State Government, an expanding metropolis with more than 20,000,000 residents, reported that it needed 6,000 MW but only received 2,000 MW from the grid.

The Clean Lagos Electricity Market Plan has allocated four hubs to the construction of power plants.

The state's Ministry of Energy and Mineral Resources said that the minimum expected generating capability for each of four hubs would be 500 MW. This will be generated by one or more power generating firms.

Select companies will be required to arrange their financing on the basis of a power purchase contract with the government.

Plans follow President Bola's decision made last year to allow states to generate and distribute power on their own, replacing an earlier law that only gave the federal government exclusive powers.

In the past, sub-economic electricity rates discouraged independent power producers from investing. However, the government is now removing electricity subsidies.

Nigeria's infrastructure can generate 13,000MW of electricity, but the creaking grid is only able to distribute a third, forcing households and businesses to use expensive fuel generators.

Nigeria experienced its ninth grid failure this year on Monday. MacDonald Dzirutwe is reporting and David Goodman is editing.

(source: Reuters)