Nnaji urges states to adopt PPP in procuring power infrastructure


By Aluta News

March 23, 2024

This is contained in a statement issued on Saturday in Abuja by Manji Yarling, Head, Media and Publicity, Infrastructure Concession Regulatory Commission(ICRC).

Nnaji said this at the first quarter 2024 Nigeria Public Private Partnership Network (NPPPN) virtual meeting.

The meeting 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.”

Nnaji, CEO of Geometric Power Ltd., said although ownership and control of power infrastructure had been decentralised, it still would not be easy for states to wholly jump into it.

He said this was because of the cost, technology implication and adverse competition where states sought to control the infrastructure.

Nnaji said 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 some 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 one megawatt and that is just to build the power plant, and you have not built the substations and all the other required infrastructure.

“So this is why it is very important that partnerships be strongly encouraged.

He said PPPs delivered success where states played their role and made their contributions.

“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.

Nnaji lauded the decentralisation of electricity, stressing that it would empower local entities to manage their energy resources and improve efficiency.

The former minister said it would also ensure that supply was more responsive to local needs and less vulnerable to systemwide disruptions or collapses.

Nnaji, 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.

He encouraged power companies to deploy technology as had been done in Abia State to combat bypassing of meters.

Michael Ohiani, Director-General, ICRC, 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.”

Ohiani said the theme presented 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 had enacted their PPP laws, stressing that the laws would incentivise private sector involvement in the states.

Ohiani pledged the support of the ICRC to help members of the Network seeking to undertake PPP projects and also states that wanted to enact their laws.

Asishana Okauru, Director-General, Nigeria Governors’ Forum (NGF), said that the meeting was apt because of the transformations ongoing in the power sector.

Okauru said that the electricity industry had undergone significant changes in recent years, saying that the discussions at the meeting would provide insights into the roles of states in electrification, including rural areas.

He said that the involvement of states would improve access, adding that state governments could deploy power infrastructure that were tailor-made to their needs.

Okauru,  however, cautioned states on inconsistent policies and bureaucracies that could hamper actualisation of the gains of the decentralisation.

The NPPPN was established in 2011 through collaboration between the 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 PPP form of procurement.

Out of the 37 member states of the NPPPN, 26 have enacted their PPP laws, while others are at different stages of enacting their regulations.


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