Turkish investment deal ‘to finance new power plant projects in Nigeria’

Out-Law News | 05 Dec 2014 | 4:43 pm | 1 min. read

Nigeria’s government has said the country’s power generating infrastructure is set for a major boost under a deal that is expected to be backed by investment from Turkey.

Nigeria’s minister of power Chinedu Nebo said a memorandum of understanding signed with Turkish-based Koztek Electric and Energy Technologies would see the construction of new power plants and transmission facilities in Nigeria that will be “wholly financed by Turkish business interests”

Nebo said Koztek would bring “expertise in hydropower, switchgears and transmission super structures” to Nigeria. Nebo said the government would provide “incentives in the form of duty waivers, rebates and tax holidays on power plant equipment and installation” to encourage investment in the power sector. “All these (incentives) are to soften the ground for investors,” Nebo said.

Nebo said encouraging private investment of the electricity transmission sector was part of long-term government plans to eventually connect the whole of the country to the national grid.

According to Nigeria’s government, Koztek will provide workforce training in Nigeria with “strict adherence” to local content rules that will “guarantee skilled manpower for the smooth running of the plants on completion”.

The agreement with Koztek follows Nigeria’s launch of a three phase liberalisation process of the energy sector. According to the US Agency for International Development (USAID), in the first phase, five generation and 10 distribution companies linked to the country’s main power holding company have been privatised since 2013. In addition, the Niger Delta Power Holding Company is privatising 10 newly-built generation plants.

Earlier this year, the World Bank committed $5 billion in new technical and financial support to encourage increased international investments in energy infrastructure projects in Nigeria and five other African nations under the US-backed Power Africa programme. Bank president Jim Yong Kim said the package would include direct financing, investment guarantees and advisory services for project preparation in Power Africa’s initial partner countries Nigeria, Ethiopia, Ghana, Tanzania, Kenya and Liberia.

Last October, Nigerian president Goodluck Jonathan welcomed the start of construction works for the country’s “first fully-financed private sector power plant”. The first phase of the Azura-Edo Independent Power Project will see construction of a 450-megawatt open cycle gas turbine power plant by Azura Power near Benin City, in Edo state. The first phase of the plant is targeted to come on stream in 2017.