The Nigerian power company taking over the operations of the defunct National Electric Power Authority (NEPA) is warning consumers to expect stiff tariff rises under the new leadership which is due to taker over in July.

The Power Holding Company of Nigeria (PHCN) will operate on a purely commercial basis and is expected to implement the Multi-Year Tariff Order (MYTO) proposed last year. Under the terms of the MYTO plan, electricity tariffs will be brought in line with other economic indices such as inflation and exchange rates and other factors that contribute to generation costs.

Under NEPA power is charged at N6.00/kWh (¢4.4/kWh) with official figures for generation at N11/kWh (¢8.3/kWh).

Along with the dissolution of NEPA preparations are underway to incorporate 11 distribution companies, one transmission firm and six generating companies into separate legal entities where private sector operators would be able to purchase shares.

Meanwhile, the World Bank is preparing to extend a $200 million soft loan to the Nigerian power sector to boost the electricity distribution network. The Bank had earlier granted NEPA $100 million to develop new transmission.