Challenges and Lessons from Nigeria's Power Sector Privatization

The article delves into Nigeria's power sector privatization initiated in 2013, emphasizing the need for substantial capital infusion and strategic investments in technology for the newly privatized companies. It criticizes the acquisition model heavily reliant on debt rather than equity, resulting in operational challenges for both distribution and generation companies.

The lack of technical expertise and financial capacity among new owners has led to revenue collection struggles, payment issues, and inefficiencies across the value chain. The sector remains plagued by chronic liquidity crises and technical inefficiencies, perpetuating a cycle of debt and energy losses, as highlighted by the Nigerian Electricity Regulatory Commission (NERC).