Manila Bulletin
By Myrna M. Velasco
Published: May 31, 2013
Philippine power utility giant Manila Electric Company (Meralco) is seriously weighing offer for it to hike its equity participation in the consortium which cornered an investment deal in Nigeria’s power distribution sector.
During a media briefing on the sidelines of the company’s annual stockholders meeting Tuesday, Meralco president Oscar S. Reyes noted that “we were given an option to increase our stake from initially 5.0-percent.”
At that level of transaction, he stressed that the utility firm’s investment will just be a marginal US$200,000.
Meralco is the technical partner of Lagos-based Integrated Energy Distribution and Marketing Ltd. (IEDM) which submitted a tender in the privatization process being undertaken for the power distribution assets in Nigeria.
“We are waiting for the final terms of the award and what’s the potential profitability of that,” the Meralco executive has emphasized.
Since the Nigerian electricity industry is undergoing a restructuring process similar to what the Philippines had gone through, Reyes noted that this will give them the upper hand when it comes to addressing the needs of that particular market.
“Nigeria is on privatization process, they privatized generation – they’re privatizing the entire electricity sector,” Reyes stressed.
The challenges for the Nigerian power sector, he added, will be the enormous segment of end-users that are still unserved – both in terms of connections and capacity.
Comparatively, the Nigerian electricity sector is a very small market with just a customer base of less than 200,000 – too marginal vis-a-vis Meralco’s more than 5.0 million customers.
Reyes emphasized that one of the major challenges in that power market would also be its high system loss record – but this is a sphere where Meralco can extend technical expertise and share some lessons learned to address it. source
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