The statutory performance review, which is now being carried out three years behind the initial schedule, may, among other things, lead to revocation of licences and assets
The Nigerian Government has begun the major performance review of the power assets sold in 2013.
This decision, Platforms Africa gathered explosively, has set jitters down the spines of investors in electricity distribution and generation strata.
Minister in charge of power, Abubakar Aliyu, in a document made available to journalists in Abuja, said plans are underway to review the assets’ sale, a move that will decide the fate of investors in the sector.
“The Ministry is intensifying performance monitoring of the licensees and the licensing regime, especially their revised Performance Improvement Plans (PIP) to have a better understanding of why some critical stakeholders are performing below expectation.
“We shall be taking a careful and detailed look at issues of policy, capacity and the technical requirement, among other things. One very critical concern that we must address in this performance monitoring process is to find out if the terms for granting the licenses were onerous,” he noted.
While the Nigerian Government has spent over N1.7 trillion on the sector with plans to spend additional $3 billion, Aliyu said government would now work on the full implementation of extant laws and design new ones in a bid to “match up with the huge sums invested by this administration.”
Platforms Africa reports that the move has started to cause apprehension among investors who now meet to strategise on the review.
A source at the ministry of power said; “Recall that the review originally slated for 2018 was shifted. It is a review in which can of worms would be opened and the officials both on the government side and the private investors’ do not want it .
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“The sector is frightened now that the government has started and I can tell you that no one is leaving it to chance. Investors are meeting officially and unofficially over this,” he said.
The Power Minister insisted there are ongoing conversations within the power value chain.
“Stakeholders are talking and cooperating with one another and in so doing, bridging the observed disconnect within the sector.
“It must be clearly stated that within this value chain, some responsibilities are by virtue of the Electric Power Sector Reform Act (EPSRA) performed by our private sector partners and other agencies of Government.
These partners are being more closely monitored and sometimes given the needed nudge in the right direction to achieve our objectives.
“Hopefully, we will soon begin to experience the imminent turn around in the power sector. We are determined to deal with some policy issues, the legal and regulatory bottlenecks, and the human factors involved in the implementation and coordination of the power sector’s road map,” Aliyu said 50 days after resuming duties as acting minister.
While government had increased tariff in electricity on the backdrop of improved supply and service, Aliyu admitted that the quality of service in terms of hours of supply, voltage, disputed/estimated bills, or having no access to electricity, remained poor.
He said there is also sector illegality, noting that the “payments the DisCos are able to collect from consumers do not cover the full investment and costs of the GenCos, who produce and sell the power, and Transmission Company of Nigeria, which wheels the power to the DisCos.”
He said the ministry would focus on addressing liquidity, improving services in terms of hours of supply, billing transparency and accuracy, and wider access to electricity while bringing consumer, operator and investor confidence back to the sector to attract foreign and local investment.
“Kashimbilla 40MW power station has already started generating power into the national grid. Gurara phase 2 being developed in partnership with the Ministry of Water Resources will soon be ready to deliver 30MW to the grid. Zungeru Hydroelectric Power Project is progressing towards completion next year to deliver another 700MW of renewable power. Katsina Wind farm, with a full capacity of 10MW, is already generating part of its full capacity to the grid.
Dadin Kowa 40MW power station started generating power into the national grid under a concession arrangement with the private investor.
“The remaining regulatory and power purchase agreement issues are being resolved. Mambilla Hydroelectric Power Project was contracted in 2017,” Aliyu said.
