State governments have been urged to employ public-private partnerships (PPPs) in procuring power infrastructure in their states.
Professor Bart Nnaji, a former Minister of Power, took charge when he presented a paper at the first quarter 2024 Nigeria Public Private Partnership Network (NPPPN) meeting, which had as its theme “The Decentralisation of the Nigerian Electricity Supply Industry (NESI) and the Role of the States in Rural Electrification: The Private Investor’s Perspective.”.
This is coming on the heels of the passage of the Electricity Act of 2023, which empowers states to, among others, procure and manage their power infrastructure.
The Nigeria Public-Private Partnership Network (NPPPN) was established in 2011 through collaboration between the Infrastructure Concession Regulatory Commission (ICRC) and the Lagos state PPP office to create a platform for all state heads of PPP units nationwide.
It was designed to serve as a knowledge and experience sharing forum to upscale the learning curve of public officers at the sub-national level of government on the public-private partnership form of procurement.
Nnaji, who is the CEO of Geometric Power Ltd., said in his presentation that although ownership and control of power infrastructure have been decentralised, it still wouldn’t be easy for states to wholly jump into it given the cost, technology implications, and adverse competition where states seek to control the infrastructure.
He opined that the better option was for states to take advantage of the decentralisation to partner and establish a regional grid because of the cost.
“There are a number of states that believe that they can easily jump in and begin to develop power infrastructure, but the sort of financial requirement to build power infrastructure is quite a lot.
“In Nigeria, depending on the fuel source, it will cost about $1.5 million per megawatt… That is a lot just for 1 MW, and that is just to build the power plant, and you haven’t built the sub stations and all the other required infrastructure.
“So this is why it is very important that partnerships be strongly encouraged. Public-private partnerships are what deliver success, where states play their role and make their contribution.
“However, if the states decide that they want to be in control, then we are going back to the NEPA days and that can be a serious problem,” he said.
He lauded the decentralisation of Electricity, stressing that it would empower local entities to manage their own energy resources, improve efficiency and ensure that supply is more responsive to local needs and less vulnerable to systemwide disruptions or collapses.
He, however, stressed the need to have a cost-reflective tariff to further encourage private sector participation, adding that states must enact and enforce regulations to curb power theft.
Fielding questions after the presentation, Prof. Nnaji encouraged power companies to do what it takes to stop power theft.
He encouraged them to deploy technology, as has been done in Abia State, to combat the bypassing of metres.
Earlier, the DG of the ICRC, Michael Ohiani, said that the meeting afforded participants the opportunity to deliberate on the serious national issue of power.
“Every hand needs to be on deck, as the nation cannot witness significant development in the absence of an adequate power supply,” he said.
According to Ohiani, the theme presents an opportunity to brainstorm and propose solutions to economic stagnation in states due to inadequate power supply.
He commended the 26 states in Nigeria that have enacted their PPP laws, stressing that the laws will incentivize private sector involvement in the state.
He pledged the support of the ICRC to help members of the network seeking to undertake PPP projects and also stated that they wanted to enact their laws.
The meeting was opened by the Director General of the Nigeria Governors’ Forum (NGF), Asishana Okauru, who said that the meeting was appropriate in view of the transformations ongoing in the power sector.
He said that the electricity industry had undergone significant changes in recent years, adding that the discussions at the meeting will provide insights into the roles of states in electrification, including rural areas.
He opined that the involvement of states will improve access, noting that state governments could deploy power infrastructures that are tailor-made to their needs.
The NGF DG, however, cautioned states against inconsistent policies and bureaucracies that can hamper the actualization of the gains of decentralisation.
The meeting also featured presentations by the Rural Electrification Agency (REA) and the Nigeria Electricity Regulatory Commission (NERC), as well as good will messages from a Senior Special Adviser (SSA) to the President on Community Development, Barr. Chioma Nweze, and Mr. George Ope, Commissioner, Economic Planning & Budget, Lagos State.
The Deputy Governor of Ebonyi State, Mrs. Patricia Obila, gave the closing remarks.
The NPPPN is a network of 36 states, including the FCT, with the ICRC serving as the Secretariat, and of the 37 ‘member states’, 26 have enacted their PPP laws, while others are at different stages of enacting their regulations.
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