Former Nigerian President Olusegun Obasanjo's administration paid non-existent companies over $50 million meant to finance a revamp of the moribund power sector, an investigative panel said on Monday.

Nigeria's parliament set up a committee earlier this year to investigate money spent on the energy sector between 1999 and 2007, funds which have done little to end constant nationwide blackouts.

President Umaru Yar'Adua, who took office last May, has said the previous administration spent more than $10 billion on the sector with little result and has voiced reluctance to pump in more funds without a clear plan in place.

Ndidi Elumelu, chairman of the committee charged with investigating the spending, questioned former energy ministers who served under Obasanjo at a hearing in the capital, Abuja, which began last week.

"Thirty-four companies not registered with the Corporate Affairs Commission -- that is, non-existent companies -- were awarded contracts totalling 6.2 billion naira," Elumelu said on Monday.

He said the committee had a list of their names, which included "Special Projects", "Space Master" and "Sassy Fund".

Nigeria, the world's eighth-biggest oil exporter, has a fraction of the domestic energy capacity it needs and is plagued by blackouts that can last anything from hours to months.

Generating capacity has remained stuck at 3,000 MW -- a tiny amount for a country of around 140 million people -- despite the fact that the previous administration said it spent heavily to increase it.

Continental economic powerhouse South Africa, itself struggling with power outages, has more than 12 times Nigeria's generating capacity for only one third as many people.

The constant power cuts in Nigeria are a hindrance for foreign investors, who increasingly see it as a key frontier market, and a source of immense frustration among Nigerians.

Investors are also watching Nigeria's efforts to deal with chronic corruption and mismanagement of government funds.

"VEXATIOUS"

Former Power and Steel Minister Liyel Imoke said no money had been misappropriated.

"To every Nigerian, myself included, the issue of power is vexatious, particularly if you consider the amount spent," Imoke told the hearing.

"Naturally this has led to a lot of speculation on how the money was expended and the impression that it has been channelled into private pockets ... This is not correct."

Fellow former power minister Olusegun Agagu blamed ministry staff for failing to vet companies that were granted contracts.

"I totally agree that the performance of the power sector today leaves much to be desired," he told the hearing.

"To however generalize that nothing has been done in the last 8-9 years to improve the sector is also far from the truth."

Yar'Adua promised during his electoral campaign to declare a "national emergency" on power, but he has yet to do so. He has promised to triple capacity within 18 months but has given few details of how that would be achieved.

Some analysts say if he manages to improve the power situation he could win back some of the legitimacy lost by widespread complaints of fraud and intimidation during the April 2007 election that gave him power.