News
Regulator issues 21 new power licenses
The Nigerian Electricity Regulatory Company (NERC) yesterday
issued licences to 20 new power generation firms, a distribution
company and the Nigerian Bulk Electricity Trading Company (Bulk
trader) as part of the Federal Governments efforts to improve on
power generation in the country.
Government expects to generate an estimated 6,105 megawatts of
electricity within the next three years from the ventures of the
licencees, beginning in the first quarter of 2012. Current
generation levels stand at about 4,000 megawatts.
Industry watchers say that the licensing of the power generation
firms, will progressively bring about cost and efficiency
reliefs to existing businesses, encourage generation of new
businesses and create more employment opportunities for teeming
Nigerians.
They add that the move will make the products of Nigerian
businesses more competitive in local and international markets,
and hope that it will attract back to Nigeria, some
multinational firms that have repartriated their businesses to
neighbouring countries, as a result of high operational costs
here. Industry analysts say that 30 percent of the cost of doing
business in Nigeria is spent on providing alternative energy, on
account of inadequate and erratic supply from the national grid.
Minister of Power, Barth Nnaji, speaking at the licensing
ceremony, described it as a laudable step towards securing
improved electricity access for Nigerians, while disclosing that
the ministry had elected to provide a budget of N40 billion as
take-off capital to both the Bulk Trader and Nigerian
Electricity Liabilities Management Company (NELMCO) with each
entity getting N20 billion, to help them begin operations in the
industry.
Eight firms were granted off-grid generation licences, ten got
grid connected licences, two companies got embedded generation
licences while one got licence for a distribution network.
Meanwhile, the ‘Bulk Trader’, securing its official trading
licence, can now commence business as an entity in the power
sector, as well as perform its task as manager of the Federal
Government/World Bank’s Partial Risk Guarantee (PRG) scheme. The
expectation of over 6,000 megawatts is deduced from the proposed
generation capacities of each of the 20 companies with a
licence. Zuma Energy Nigeria Ltd,has disclosed plans to generate
about 1,200 mega watts of power from its proposed coal-fired
power plant to be located at Itobe, Kogi State. The plant will
be the first of its kind in Nigeria when inaugurated.
Nnaji specifically tasked the new licensees to brace up to the
challenges before them, reminding them that: “Government expects
you to help move this sector forward because there is no other
way we expect a leap frog in the sector, other than from the
National Integrated Power Projects (NIPPs).
“It is easy to give licences but it is actually the quality of
the companies that are given these licences that matters,
because we have capacities from government’s existing power
plants as well as a limit from NIPPs which is about 4,775
megawatts. Once we reach that point, that’s it, we close and
allow for expansion and we can only help you rather than impede
you in achieving success,” the minister added.
Nnaji, commending NERC’s transparency in the process, said, “I
like to say that licences issued by the regulatory body are not
dodged licences, and so we expect that you are going to help to
transform the power sector by these licences.”
He further said, “One of the things government wanted to do from
the start, is to see that we have a very high quality strong and
independent regulatory commission and we have one now. For them
to come through with the processes of issuing these licences
today is commendable.”
He reminded NERC of its obligation to the Nigerian people,
saying: “There are many things that the regulatory commission
does but let me say that the act of licensing, which empowers
you to go out there and do what is important in the delivery of
electricity to the country is a very important act and you have
to bear in mind that you have obligations with this
empowerment.”
Earlier, the President of the Independent Power Producers
Association of Nigeria (IPPAN), Jerry Gana, observed that
on-going reforms in the power sector as well as the issuance of
new licences to investors, suggests that government’s intention
for the sector is genuine.
Gana said, “Bearing in mind the challenges that these licencees
would have faced just a year ago, the rigorous processes
initiated by NERC for this, as well as the gradual surmounting
of obvious impediments to the operations of independent
producers, we only expect to see the best in the sector.”
Some of the licencees for off-grid generation include Tower
Power Abeokuta (20MW), Akute Power Ltd (13MW of renewal energy),
Shoreline Power Ltd, Sagamu (9MW), CET Power Project, Sagamu and
Ewekoro (7MW and 6MW respectively), Income Electrix Ltd (6MW),
Energy Company of Nigeria (3MW) and Ilupeju Power Ltd (2MW).
For the grid connected licensees, Zuma Energy (1200MW coal power
plant), Alaoji Generation Ltd (1,074MW), Knox J&L Energy
Solutions (1,000MW), Olorunsogo Generation (750MW), Ogorode
Generation (450MW), Azura Power West Africa (450MW), and Zuma
Energy (400MW gas plant).
Others are MBH Power Ltd (300MW), Eleme Petrochemical Ltd
(135MW) and Delta Electric Power Ltd (116MW). The embedded grid
category has Geometric Aba Power Ltd (140MW tenure extension),
Kaduna Power Supply Ltd (84MW), as well as a distribution
licence to the Aba Power Ltd.
Source:
BusinessDay
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