Nigeria is seeking bidders for 11 electricity distribution firms in deals that could unlock billions of dollars of foreign investment and help end chronic power shortages.

The Bureau for Public Enterprise (BPE) says the country's privatisation council last week approved the search for core investors for the firms, which currently operate under the umbrella of the Power Holding Company of Nigeria (PHCN).

Nigeria is Africa's biggest crude oil and gas producer but is plagued by chronic power shortages, leaving its businesses reliant on expensive diesel generators.

'Under the proposed privatisation strategy for distribution companies, a private sector operator will acquire controlling equity interest in any of the distribution companies with a view to rapidly improving its operational efficiency,' says the BPE.

Bidders will have to submit estimates of how much they could improve efficiency over a five-year period.

Solving the problems at PHCN are key to attracting independent power producers to Nigeria.

Finding a solution to the power problem in such a large country could yield massive returns for utility companies. Infrastructure financiers say foreign investors are ready to pump billions of dollars into the power sector if the regulatory framework can be resolved.

Access to electricity is one of the main demands of the over 140-million ordinary Nigerians, who dub PHCN "Please Have Candle Nearby".

Source: Reuters