Nigeria Energy: Experts hold forth on power sector legal reform

A closer look at new legislation allowing state governments to generate and transmit their electricity – essentially paving way for state electricity markets; hopes Electricity Act will open funding and attract new investment into sector

Nigeria Energy 2023 opened at Landmark Centre in Lagos yesterday with surprises, including ambitious goal setting by the country’s new Minister of Power. Hon. Adebayo Adelabu announced a national target to reach 20GW power generation capacity in three years.

Further insights on the transformation of the power sector in Nigeria came in an opening panel discussion, “The Fifth Alteration Bill No. 33, Devolution of Powers (National Grid System) and the New Electricity Act 2023.”

Power sector constitutional amendment

Last year, Nigerian lawmakers amended the constitution allowing state governments to generate and transmit their electricity – essentially paving the way for state electricity markets. In June 2023, the President signed into law the New Electricity Act 2023, an updated legal and administrative framework for the operation of a fully privatized electricity market.

Speakers at Nigeria Energy sought to discuss the transformation of the power sector in the wake of these legislative changes and the implementation challenges and opportunities it holds for investors.

New avenue for DisCos

Dafe C. Akpeneye, the Commissioner for Legal, Licensing & Compliance at the Nigerian Electricity Regulatory Commission, noted that having a central regulator is emblematic of a country’s electricity market’s maturity.

He added that states establishing their electricity markets need to understand the technical constraints that affect electricity transmission before bifurcating the market.

He noted that the regulator is trying to coordinate the regulatory transition in a manner that ensures standardization of regulations across the states that set up their electricity markets.

Folake Soetan, MD & CEO, Ikeja Electric, speaking from the perspective of the distribution companies, discussed the collaborative opportunities of the new act. It presents an avenue for the DisCos to restructure their businesses as states develop new regulations. It also incentivizes them to work with clean energy companies to improve grid-tied renewable capacity.

Attracting investment – learning from EPSRA

Chima Ochi, head of legal advisory & contracts, Eko Electricity Distribution Company, noted that the now repealed EPSRA Act that governed the sector post-privatization had transformative potential. However, challenges with its implementation mitigated sector growth.

He added that the implementation of the new act must learn from the EPSRA Act. Mr. Ochi added that the new Act could improve efficiency in the sector, especially in the transmission and distribution value chains. However, DisCos must take advantage of the act to delineate electricity supply to other players.

The panelists broadly agreed that the new Electricity Act would improve funding opportunities and attract investments into the sector as it empowers state governments to work with distribution companies to invest in infrastructure. They did note that investors seek regulatory reliability and stability. The implementation of the act must prioritize this, as it is key to improving investor confidence and private sector participation in the sector.

The Act requires the government, through the Ministry of Power, to prepare an Integrated National Electricity Policy and Strategic Implementation Plan, within one year from its commencement. Panelists emphasized the need for an implementation plan that reflects the tenets and opportunities of the Act.

Nigeria Energy 2023

Nigeria and West Africa are in focus at Nigeria Energy in Lagos this week. More than 200 exhibitors will show the products and promising technologies at play in this dynamic region. Hundreds of delegates will attend  the Nigeria Energy Leadership Summit and a Technical Seminar.

This year’s conference and exhibition is the 10^th edition of this key event. And the best news is, registration is free!

For delegate pass enquiries reach out to [email protected]

A new report on West Africa is now out from Informa Energy & Utilities. It combines a useful overview of each country combined with close looks at four key sectors across the region.