FG issues 20 independent power project licences Featured
Written by Stanley Opara



The Federal Government on Tuesday in Abuja issued 20 new licences to independent power producers to boost electricity generation in the country.



The 20 power producers are expected to add 6,258 megawatts of electricity to the national grid over the next 36 months.

A distribution licence was also issued to Aba Power Limited in Aba, Imo State.

The biggest beneficiary of the licence issuance is Zuma Energy Nigeria Limited, which is expected to generate 1,200MW from coal deposits in Itobe, Kogi State.

Some of the other companies that got licences to generate electricity were Akute Power; Zuma Power; Cet Power, and Ilupeju Power.

The Minister of Power, Prof. Bart Nnaji, said at the presentation ceremony, "From the budget of the Ministry of Power, we are giving N20bn to the bulk trader so they will have money to pay for power from the power producers. We are also giving N20bn to NELMCO to assist in buying over most of the liabilities of the government power operators in preparation for their privatisation.

"The privatisation is moving forward and we expect that by the second or third quarter of next year, we should have concluded the process and handed the sector over to private concerns."

The Chairman, Nigerian Electricity Regulatory Commission, Mr. Sam Amadi, said five other firms were currently undergoing scrutiny and would be issued similar licences if they were found capable.

He described the licence issuance as a landmark event for the sector, noting that the licensing of the bulk trader to commence operations was a major boost to the reforms being carried out in the sector.

The Chairman, Independent Power Producers Association of Nigeria, Prof. Jerry Gana, expressed joy that some of the impediments that had hindered independent power producers from operation in the last one year had been resolved by the Federal Government.

He advised the IPPs to ensure speedy commencement of work "such that Nigerians will begin to enjoy stable power sooner than expected."

Gana urged the government to fund the bulk trader because "that is our key agency. We will sell to them when we produce and they will make the investment worthwhile."

Meanwhile, NERC has said the 36 states of the federation will have the statutory right to generate and distribute electricity within their locality from next year.

Amadi confirmed this to our correspondent on Tuesday in a telephone interview.

"The regulations were already presented to the public for comments; they are the regulation on embedded generation and independent electric distribution network," he said.

The NERC boss said the plan would be actualised when the commission’s new set of regulations guiding the independent electricity distribution network operators and power generators became operational.

According to him, embedded generation is when a power plant is built in a particular locality and is not connected to the national grid for transmission. It is a situation whereby the generated capacity is connected directly to the distribution network.

Currently, the Federal Government has the exclusive right to power generation and distribution for commercial purposes, except for some companies that have been licensed to produce limited power for their industrial applications.

Amadi, at a recent stakeholders’ workshop on the review of the Independent Electricity Distribution Network draft regulation, had said that as the regime would kick off next month, it was expected that states with the capacity to generate power in their domain should come forward to seek operational licences.

Explaining the method of operation of the new initiative, the chairman noted that it would ensure that "all the cost associated with transmission is bypassed. It is embedded with the distributor locally."

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Lagos(given the high population, I'm a bit skeptical) and Rivers will be one of the first states to have constant electricity. Hopefully, if the gas in Delta tapped, we will also be there!

i wonder if this is federalism through the back door.well enugu should warm up.

Good one. I really hope they deliver.