The Federal government of Nigeria has committed an additional US$550m to its US$1bn sovereign wealth fund, through the Nigeria Sovereign Investment Authority (NSIA), to stimulate investments in the power sector. Of this amount, US$350m will be used as a liquidity facility for the Nigerian Bulk Electricity Trading Company while US$200m will be used for the supply of natural gas for power stations. The Nigerian Bulk Electricity Trading Company was set up as an intermediary between electricity generation and distribution companies, as part of a US$2.5bn privatisation programme. In a first phase, the National Electric Power Authority was broken up into 17 generation and distribution companies (for sale in December 2010); in the current second phase, the government is selling 80% of its interest in 10 generation companies. Nigeria's power sector reform aims to harness its abundant gas resources to provide cheap power, in a context of strong economic growth (about 7%/year) and rising power demand. Investment to reach 20 GW of capacity is estimated at US$3.5bn/year.
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