Nigeria Boosts Power Sector: Grants 13 New Generation and Distribution Licenses to Investors

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In a bid to enhance electricity generation, transmission, distribution, trading, and system operations in Nigeria, the Federal Government, through the Nigerian Electricity Regulatory Commission (NERC), has recently granted 13 new licenses. These licenses cover various aspects of the power sector, including off-grid and embedded power generation, independent electricity distribution, and electricity trading.

The issued licenses are expected to contribute a cumulative quantum of 40.9 megawatts to the country’s electricity generation capacity. Specifically, during the review period, NERC granted five new off-grid generation licenses with a total capacity of 8.81 megawatts. Additionally, one new license was issued for embedded generation, targeting a capacity of 5 megawatts. This initiative reflects the government’s commitment to diversify and strengthen the energy sector for improved power supply across the nation.

“one new licence for Independent Electricity Distribution Network, one new licence for trading, three off-grid generation licences, one embedded generation, and one IEDN licence,” NERC noted.

The report further stated that the regulatory Commission, Nigerian Electricity Regulatory Commission (NERC), plays a pivotal role in issuing licenses across various facets of the Nigeria Electricity Supply Industry (NESI). These licenses encompass electricity generation, transmission, distribution, trading, and system operations. By overseeing and granting licenses in these critical areas, NERC contributes to the development, regulation, and optimization of the country’s electricity infrastructure, aiming to enhance efficiency and meet the growing demand for power in Nigeria.

“For activities that do not require licenses based on the provisions of sections 65-68 of the Electricity Act 2023, but still require authorisation from the commission, such as off-grid captive power generation and mini-grid development, the commission issues permits to the operators following a review of the relevant applications,”It stated.

Regarding the 13 new licenses for power generation, distribution, and trading, the NERC’s report outlined key details. Daybreak Power Solutions Limited secured eight licenses for diverse off-grid power generation projects in Lagos, Abia, Borno, Kano, Oyo, and Abuja.

Ekiti Independent Power Project obtained a license for the development of a 5MW gas-fired embedded power project in Ekiti State. Additionally, Olokiti Power Distribution Limited received an Independent Electricity Distribution Network license for operations in Ekiti State.

Ember Power Limited was granted an electricity trading license, while Island Power Limited secured a license for the development of a 10MW embedded gas-fired power project in Lagos.

Furthermore, Energy Company of Nigeria Limited was awarded an Independent Electricity Distribution Network license for operational activities in Lagos State, as per the regulations highlighted in the report.

Nigeria currently generates between 3,500MW and 5,000MW of electricity for its over 200 million consumers. Despite these figures, analysts and many Nigerian electricity consumers view this level of power generation as detrimental to the progress of Africa’s largest economy. As of January 15, 2024, at 6 a.m., the country’s power generation was recorded at 4,357.09MW, with the peak power generation the previous day reaching 4,579.5MW, and off-peak power generation at 4,062.98MW.

Unfortunately, numerous parts of Nigeria, especially rural communities, regularly face blackouts due to the country’s limited power generation, distribution, and supply capabilities in the power industry. Last June, Nigeria was identified as the country with the highest number of people lacking access to electricity. A joint report by the International Energy Agency, International Renewable Energy Agency, United Nations, and the World Health Organisation revealed that about 86 million out of the country’s 200 million population were living without electricity as of 2021.

Efforts have been made by the Federal Government and power supply operators to increase the country’s electricity output over the years, leading to the privatization of successor generation and distribution companies in November 2013. The issuance of licenses for electricity generation by the government through the Nigerian Electricity Regulatory Commission (NERC) is seen as another strategy to enhance the country’s power supply and reduce the number of people without electricity.

Despite significant financial investments in the power sector since 1999 when Nigeria returned to democratic governance, individual consumers and power consumer groups continue to criticize the poor electricity supply in the country. There are persistent calls for the government and industry operators to intensify efforts in delivering sufficient electricity to Nigerian homes, businesses, and organizations.

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