FG seeks new investors in power sector

The Nigerian government has said it is seeking avenues to open up the country’s electricity market to new investors in generation, transmission and distribution infrastructure, as according to it, resolving the power supply problem remained its a top priority.

The country’s Vice President, Prof. Yemi Osinbajo who said this in Abeokuta, Ogun State on Thursday, at the inauguration of a 2x60MVA, 132/33kV substation built by Niger Delta Power Holding Company Limited, emphasised that the current state of power generation, which at the moment stands at 3,586.5 megawatts according to Nigeria Electricity System Operator data, was not enough.

The vice president argued that the current structure of the market could not deliver on the government’s promises for power for domestic and industrial use.

“Today we have 13,427MW of installed capacity, and an available capacity of 8,342MW. The national grid has the capacity to transmit about 7,000M, an increase from less than about 5,000MW in 2015,” he said.

“But distribution capacity in the 11 Discos are significantly low, hovering at around 4,000MW on average with a peak of about 5,400MW. So despite the availability of about 8,000MW of generation and about 7,000MW of transmission capacity, lack of Disco infrastructure to absorb and deliver grid power to end users has largely restricted generation to an average of about 4,000MW.”

Osinbajo noted that the key strategy is the Nigeria Electrification Roadmap, which according him, is aimed at deploying financing and technology on commercial terms agreed with transmission and distribution companies in partnership with the German government and Siemens.

“Second is the opening up of the market to new investors in generation, transmission and distribution infrastructure, transacting directly with each other to serve willing customers including deploying off-grid power and using micro-grids, especially for deployment of solar power,” Osinbajo said.

He said the policies and regulations meant to empower customers to get the services they want at prices they agree to, include the Independent Electricity Distribution Networks 2012; the Mini-Grid Regulation, 2016; and the Eligible Customer Regulation, issued on November 1, 2017.

“The Electricity Distribution Franchising Regulation, which is still in public consultation preparatory to its issuance within a short period of time, sets out the rules for a distribution company to appoint or be compelled to cede consumers connected to a 33kV or 11kV feeder or a designated area to an agent or third party willing to make investments in lines, metering, transformers, other equipment and operations to serve the customers better at a mutually agreed tariff.”

He assured that when the polices are fully implemented it would open up of the market to new investors.

On July 22, 2019, the Federal Government and Siemens signed a Letter of Agreement on the Nigeria Electrification Road map, a three-phase project designed to achieve 25,000MW of electricity in the country by 2025.