20100126

NIAMEY (Reuters) - Niger has spent $20 million on buying new diesel-powered generators to improve electricity supplies to its regions and cut reliance on power from neighbouring Nigeria, the government said on Tuesday.

Niger relies on Nigeria, its larger but politically troubled oil-producing neighbour to the south, to supply 90 percent of its electricity. But power supplies are erratic and have prompted Niger to rethink its power supply options.

Nigelec, Niger's state power company, has used a $20 million loan from India's EXIMBANK to buy eight new generators, one for each of the country's regions, adding over 27 megawatts of power production capacity to the country, according to the government.

"With these acquisitions, Nigelec is protecting us from all crises and we should congratulate the company," Sountalma Mamadou, spokesman for the ministry of mines and energy, told Tenere, a local television station.

The loan deals were signed in late 2008, before Niger fell out with much of the international community over President Mamadou Tandja's successful campaign to change the constitution to remain in power after his second term ran out last year.

Niamey, the capital, has received the biggest boost with an extra 15 megawatts of power generating capacity.

The government reviewed its power policies after a series of power cuts in mid-2008 left residents in the dark and power reserved only for the government, armed forces and hospitals.

With the new generators, 70 percent of the capital will now be supplied with electricity, according to the government.

Niger, a vast nation straddling the Sahara desert, is seeking to become one of the world's leading uranium producers. It is also in the process of boosting hydroelectric capacity.

Since his row with donors, which has led to cuts in aid programmes but had little impact on investments in mining, oil or infrastructure projects, Tandja has told Nigeriens that they must work harder to be self-sufficient.