As part of its commitment towards improving supply of electricity and to encourage investments in the Nigerian power sector, the Federal Government of Nigeria (the “FGN”) through the Ministry of Power, has recently issued the Power Sector Policy Directives and Guidelines (the “Policy”). The Policy, captures directives to institutions within the power sector, including regulators; and addresses issues aimed at improving power supply in the country.
According to reports, the Nigerian Electricity Regulatory Commission (“NERC” – the power sector regulator) is required under the Policy to, inter alia:
• Create a level playing field that will improve electricity supply across the country and encourage competition by facilitating willing–buyer willing–seller transactions;
• Withdraw existing orders against willing-buyer willing-seller transactions;
• Within four weeks, issue an order to explicitly permit all customers supplied at 132kv and 330kv to contract as eligible customers for their power, directly with a generation company, and for their transmission requirements directly with Transmission Company of Nigeria;
• Expeditiously license mini-grid applicants, especially where consumers and developers have agreed terms; and
• Set and enforce targets for distribution companies to apply the franchising regulation to contract capable investors, agents and partners of the distribution companies.
It is a welcome development to see the FGN take steps towards improving power supply in Nigeria considering the current gulf between power supply and demand in Nigeria. It remains to be seen whether the introduction of the Policy will positively impact investments in the Nigerian power sector.
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