State governments have been urged to employ Public Private Partnerships (PPPs) in procuring power infrastructure in their states.
Former minister of power Prof. Bart Nnaji gave the charge on Thursday when he presented a paper at the first quarter 2024 Nigeria Public Private Partnership Network (NPPPN) meeting which had as its theme: “The Decentralization 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), Lagos state PPP office, to create a platform for all states 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., in his presentation, said that although ownership and control of power infrastructure has been decentralised, it still wouldn’t be easy for states to wholly jump into it given the cost, technology implication 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 megawatts.
That is a lot just for 1MW and that is just to build the power plant, and you haven’t built the substations and all the other required infrastructure.
“So this is why it is very important that partnerships be strongly encouraged. Public Private Partnership is what delivers 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 decentralization 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 on 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 bypassing of meters.
Earlier, the DG of 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 adequate Power supply” he said.
According to Ohiani, the theme presents an opportunity to brainstorm and proffer 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 states that want 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 apt in view of the transformations ongoing in the power sector.
He said that the electricity industry had undergone significant changes in recent years, saying that the discussions at the meeting will provide insights into roles of states in electrification, including rural areas.
He opined that involvement of states will improve access, adding that state governments could deploy power infrastructures that are tailor-made to their needs.
The NGF DG however cautioned states on inconsistent policies and bureaucracies that can hamper actualisation of the gains of the decentralisation.
The meeting also featured presentations by the Rural Electrification Agency (REA), Nigeria Electricity Regulatory Commission (NERC), as well as a good will messages from a Senior Special Adviser (SSA) to the President on Community Development, Barr. Chioma Nweze and Mr. George Ope, Hon. 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. Of the 37 ‘member states’, 26 have enacted their PPP laws, while others were at different stages of enacting their regulations.
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