Nigeria signs $10 billion MoU with General Electric for power generation

Channels Television  
Updated March 26, 2012

A $10 billion agreement was signed by the federal government and General Electric (GE) in London over the weekend which will provide for the construction of series of power plants in the country. The federal government was represented by the Minister of Power, Professor Barth Nnaji.

Professor Nnaji explained that under the MoU the American foremost energy company will now be an equity participant in the nation’s power generation rather than just supply of materials that obtain before.

According to him, “in the past, GE only supplies the equipment but now, they will be investing 10 to 15 percent in equity for every single project and the government will match them in such investment while the private sector will bring the balance.”

The Minister also says the government would tap a small percentage of the national pension fund to finance some of the power projects.

Nnaji explained further 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.

He however added that there are not many projects that are more secure than the power plants, saying “investment in the power sector is constant because people must buy electricity, while government provides the guarantee.”

Nigeria signed a similar MoU with GE in 2009, but the Minister noted that the new arrangement is more detailed and more specific.