Nigeria issues licences to 20 independent electricity power producers

Dec 08, 2011 12:00 AM

The Federal Government of Nigeria issued 20 licences to independent electricity power producers to shore up the deregulation of the electricity market in Nigeria.
The licensees are expected to add a total of 6,258 MW of electricity to the nation within the next 36 months. A distribution license was also issued to Aba Power Limited for tenure extension in Aba.

One of the licensees, Zuma Energy Nigeria Limited is to produce 1,200 MW from coal deposits in Itobe, Kogi State.
The license to generate power from coal represents a manifestation of government's resolve to utilize the nation's energy mix for power generation which have for long been neglected. Eight of the licenses were for off-grid generation, 10 for grid connected licenses and 2 for embedded generation.

Chairman of the Nigerian Electricity Regulatory Commission, Sam Amadi said 5 other licensees were waiting, undergoing scrutiny for possible issuance of similar licenses. He described the issuance of the licenses as a landmark event for the power sector, noting that the license to the bulk trader to commence operations was also a major boost to the reforms in the sector.
Presenting the licenses, Minister of Power, Barth Nnaji said it was gratifying that government had finally addressed most of the challenges independent power producers were facing.

He said: "From the budget of the Ministry of Power, we are giving N 20 bn to the bulk traders so they will have money to pay for power from power producers. We are also giving N 20 bn to NELMCO to assist in buying over most of the liabilities of the government power operators in preparation for the privatization.”
“The privatization is moving forward and we expect that by second or third quarter of next year, we should have concluded the process and handed the sector over to private concerns."

On the challenges with the electricity workers, he added: "The Federal Government is addressing all the concerns of labour. We want to once again assure them that it is from their midst that the workforce for the sector would come. The operators will no doubt require the immense experience many of them have gathered over the years."
Chairman of the Independent Power Producers Association of Nigeria, Prof Jerry Gana commended the move saying some of the impediments that had hindered independent power production from operation in the last 12 months were finally removed.

He tasked the owners of the licenses to ensure speedy commencement of work "such that Nigerians will begin to enjoy stable power sooner than expected."He charged the Federal Government to fund the bulk trader sufficiently.
"That is our key agency. We sell to them when they produce and they make the investment worthwhile," he said.

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