The power sector is very capital intensive. It is obvious that Government with its many responsibilities in other sectors of the economy, cannot fund its development as outlined above. For that reason, there is genuine need to reform the sector so as to attract and encourage private sector participating to attract capital to fund the sector and to ensure a level playing ground for both local and foreign investors.
The electric power policy statement of government therefore is to ensure that Nigeria has an Electricity Supply Industry (ESI) that can meet the needs of its citizens in the 21st century. This in fact will require a fundamental reform (liberalization at all levels of the power industry) (NEPA, News, 2003).
i. The Federal Government will therefore provide overall directive for the development of the electricity supply industry and enabling environment.
ii. Ensure the general consistency of electric power policy with all other national policies and specifically with other aspects of the energy policy.
iii. Enact promptly the necessary laws, regulations and other measures required to support the electricity policy.
It is also expected that Government would have an independent regulatory agencies, which will be responsible for the issuance of licenses to companies operating in the electricity supply industry.
Then one can now say that the main aim of the reform and privatization of NEPA is to reverse the trend that has led to the present dismal state of electricity supply. The reform however, would among others:
a) Unbund NEPA along its functional lines into 18 competing Business Units (Bus).
b) Provide appropriate regulation to ensure industrial growth and safety in operators by the establishment of an Independent Industry Regulator (Nigeria Electricity Regulatory Commission {NERC}).
c) Introduce modern technology into the Nigerian Electricity Supply Industry (NES).
d) Provide adequate legislation for the operation of NESI).
e) Attract foreign investment and positive re-imaging of NESI.
f) With the exception of the transmission/system operations company privatize the NBUs starting with distribution.
g) Prepare grounds for competition by promoting efficiency and better management of NESI.
h) Resolve massive and perennial pension funding gaps.
i) Foster a focused development of NESI.
j) Generate employment opportunities (NEPA News, 2003).
The process of sector reform and enterprise restructuring and privatization is an intricate and delicate one that needs care in handling. This is a major pathway forward in Nigeria’s quest for socio-economic and political development in all its ramifications.