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Abuja - Nigerian President Goodluck Jonathan handed ownership of the bulk of the state electricity company to private buyers on Monday, completing one of the final stages of a privatisation process meant to end decades of debilitating power shortages.
Despite holding the world's ninth largest gas reserves, Nigeria only produces a tenth of the amount of electricity as South Africa for a population three times the size.
The Power Holding Company of Nigeria (PHCN) keeps the lights on for only a few hours a day, forcing those who can afford it to rely on expensive diesel generators that burn up billions of dollars from the Africa's second largest economy.
Despite slow and costly progress, Jonathan's effort to privatise the sector and draw in investment may be the best chance yet to unblock a major bottleneck to development. Improvements could be felt in 2-3 years, experts say.
"I congratulate our new owners who have taken over the engines and cables that are expected to drive not just the electricity industry but also the socio-economic well-being of the nation," Jonathan said, after handing private buyers certificates of ownership at a glitzy ceremony in his villa.
It was eight years after a law passed to enable the process.
"To the Nigerian people, who have demonstrated such great patience and confidence, putting up often with darkness... I say better days are coming," Jonathan added.
Most bid winners were oligarchs connected to the political elite, like former military president Abdulsalami Abubakar, former military governor of Kano state Sani Bello and tycoon Emeka Offor, but with some recognised technical partners like Siemens and Manila Electric.
Fixing electricity could reduce business costs by up to 40%, add 3% to GDP and cut the mass unemployment that fuels unrest seen in oil theft in the south and a bloody Islamist insurgency in the north, economists say.
Some $40bn has gone into several power reform drives in the last 20 years, much of it wasted.
The PHCN was split into six generation and 11 distribution firms, all sold separately, for about $2.5bn in total.
Private buyers for five generation companies and 10 distribution firms collected their share certificates and operating licenses from Jonathan during the ceremony.
The buyers will take physical ownership of the infrastructure next month, government officials said.
Two remaining companies are expected to be sold within six months.
Nigeria is also planning to sell off 10 more newly built state power plants, all gas-fired, by next year.
That only six of these plants have been completed since former president Olusegun Obasanjo first unveiled plans for them in 2004 shows how slowly electricity reforms are moving.
If competent buyers get the NIPP plants it could be a boost for foreign energy operators with latent gas reserves like Royal Dutch Shell and Chevron.
A lack of investment in the transmission network, which remains in public hands, poor gas supply and labour disputes still threaten to delay progress in boosting power output.
Nigeria's government has agreed to pay off more than 14 000 workers at PHCN with a total of 384bn naira ($2.4bn), about what it got from the privatisation.
Jonathan said on Monday $750m had been raised to help improve transmission, some funds coming from a Eurobond.
As well as selling off existing assets, more are planned. Nigeria signed a deal last week for Chinese state companies to build a $1.3bn power plant.
