•As President Buhari amends Act

•Generation drops 4.2% to 4,742MW

By Udeme Akpan, Energy Editor

Experts and analysts, weekend, predicted that more than $10 billion additional investment would be attracted into the power sector, following the amendment of Nigeria’s Electricity Act by President Muhammadu Buhari.

Before the amendment, the power sector was placed under the Exclusive list of the Federal Government, which excluded states from investing and regulating generation, transmission, and distribution activities in the nation.

Checks by Vanguard showed that this and other major developments constrained investment and development in not only the states but also the entire sector.

Generation drops 4.2% to 4,742MW

Data obtained from the Energy System Operator, an autonomous unit in the Transmission Company of Nigeria, TCN, by Vanguard, yesterday, put Nigeria’s electricity generation at 4,742 megawatts, MW, indicating a drop of 4.2 per cent, from 4,950MW recorded two weeks ago.

It also showed that a little over 4,000 MW was transmitted and distributed to consumers, apparently too meager, considering the nation’s more than 200 million population.

But with the latest amendment, investment experts and analysts said states would be empowered to invest in the sector as well as put adequate institutions, structures, and systems in place to attract and retain local and foreign investors interested in their domains.

We expect $10bn investment —New Hampshire, CPPE

In a telephone interview with Vanguard, yesterday, the Managing Director/CEO, New Hampshire Capital Limited, Mr. Odion Omonfoman, said: “It is difficult to say exactly how much additional investment would be attracted as a result of the amendment. But it could be quite sizeable. I expect it to be more than $10 billion in three years.

“The amendment would culminate in the establishment of Electricity Generation Companies, Gecos; Electricity Distribution Companies, Discos; Electricity Cooperatives, Metering Assembly Plants; and Gas pipeline infrastructure.

“These and other things would be possible because states can now make laws to regulate the generation, transmission, and distribution of electricity in their domains.

“They can make laws to establish State Electricity Regulatory Commissions. States can license, build and operate GenCos within their state boundaries.

“States can license, build and operate transmission companies within their boundaries. DisCos no longer have any exclusive franchise areas. States can license and operate new DisCos within their boundaries to operate alongside existing DisCos.”

In another interview with Vanguard, yesterday, the Chief Executive Officer, Centre for the Promotion of Private Enterprise, CPPE, Dr. Muda Yusuf, said: “We expect about $10 billion additional investment to be made. 

”This is because we are dealing with a situation of very high deficit in power supply which offers tremendous opportunities for investment.

“The significance of this amendment is the regime of decentralization of electricity supply. It is instructive that it covers the entire electricity value chain from generation, transmission, and distribution. It is a positive development that deserves commendation.

“We should see more investment by the states, private sector as well as a public-private partnership, PPP, in the power sector. This should make the space more competitive with positive efficiency outcomes. 

”This amendment should, however, be complemented with investment-friendly fiscal, monetary, and forex policies to enhance the delivery of desired outcomes.”

DisCos to promote embedded power — FalCore Power

Also speaking with Vanguard, the Managing Director, FalCore Power & Energy Limited, Mr. Abayomi Olusola Falana, predicted that many DisCos would seize the opportunity created by the amendment to promote their embedded power generation.

He said: “In reality, what the amendment means is that the private independent power providers can also generate and transmit electricity, in other words, the Act does not limit the entity to state governments.

“In fact, what will happen is that most of the DISCOS will now promote their own embedded power generation with the IPPs just like what the IKEJA and EKO DisCos are experimenting with already. 

”There are existing IPPs generating electricity already, ahead of this amendment e. g. Agura power plant in Delta State.”

States should generate, transmit, distribute electricity —Buhari

President Muhammadu Buhari had last week, announced the constitutional amendment allowing states to generate, transmit, and distribute electricity in areas covered by the national grid.

In a statement obtained by Vanguard, the Senior Special Assistant to The President on National Assembly Matters (Senate), Senator Babajide Omoworare, stated: “The highlights of the assented Constitutional Alteration Bills, amongst others, are: Ensuring financial independence of State Houses of Assembly and State Judiciary; Regulating of the first session and inauguration of members-elect of the National and State Houses of Assembly and for related matters.

“Ensuring that the President and governors submit the names of persons nominated as ministers or commissioners within 60 days of taking the oath of office for confirmation by the Senate or State House of Assembly; and for related matters.

“Enable states to generate, transmit, and distribute electricity in areas covered by the national grid; and for related matters; excluding the period of intervening events in the computation of time for determining pre-election matters petitions; regulating the first session and inauguration of members-elect of national and state assemblies.”