The federal government has said Nigeria’s Electricity Supply Industry (NESI) is now showing signs of an electricity market with globally recognised standards in trading arrangements especially with regards to the presence of two key agencies.
Vice-President Namadi Sambo said in Abuja that the presence of the Nigerian Electricity Regulatory Commission (NERC) and Nigeria Bulk Electricity Trading (NBET) Plc have provided the requisite conditions to attract essential funding and investments into the country’s electricity market.
Sambo who inaugurated the recently constituted National Council on Power (NACOP) said that both NERC and NBET have provided the electricity sector with the backbone to further develop.
He explained that through specific electricity regulatory and off-taker functions, both NERC and NBET now provide operators in the electricity value chain the leverage to undertake electricity operations without inhibition.
Sambo said: “Today, we have a strong enabling law, the Electric Power Sector Reform (EPSR) Act 2005, which forms the backbone for development of the sector. By way of further specific details, we have a well capacitated and operationally independent sector regulator-NERC as well as a capitalised off-taker-NBET Plc.”
“With these two institutions, power can now be generated, transmitted and distributed under market terms that are defined by globally recognised willing seller and willing buyer conditions.
The new investors covering the entire value chain of the sector; the gas producers, generation companies, distribution companies, Independent Power Producers and meter producers are now able to expand, upgrade and modernise without any inhibition whatsoever,” he added.
NERC recently reviewed the price regime for gas-to-power and partnered with the Central Bank of Nigeria (CBN) to secure financial intervention for payment of legacy gas related debts owed to gas producers, in addition to strengthening its regulation of the sector.
Likewise, the NBET has initiated creative means of sustaining its capitalisation account by handing over about $300 million of its own share of the government sourced Eurobond to the Nigerian Sovereign Wealth Investment Authority (NSIA) to invest and make profits that will repay accrued interests on the Eurobond in addition to achieving a closure on its first negotiated Power Purchase Agreement (PPA) with Azura-IPP.
Reports indicate that both agencies have also provided other countries with evolving electricity markets within the West Africa region with valuable learning curves through their experiences.
Sambo, however noted that they remain relevant to the growth of Nigeria’s electricity market, as the government looks poised to allow the sector play its role in Nigeria’s economic development.