A flow of letters of credit (L/Cs) anticipated from power generators in Nigeria has failed to materialise due to a lack of government funding.

The funding had been expected since a presidential task force on power said a year ago that funding would be forthcoming for privately operated power projects.

Funding shortfall

The presidential task force agreed a road map for the power sector and earmarked funding for private power generators.

But energy analysts say that the budget specified in the road map has been cut by 40 per cent and that only half of those funds have been released.

As a result, the expected flow of L/Cs from power generators ordering equipment from manufacturers has not materialised.

Lack of coordination

Analysts blame a lack of coordination between the presidential task force and other ministries for the apparent slow progress along the road map so far.

The Power Sector Reform Roadmap had anticipated total power generation in Nigeria of 7,033 megawatts by April 2011, while the country's actual power generating capacity is now thought to measure around 3,200 megawatts.

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