Nigeria needs $100bn in 20 years to tackle power challenges- Stakeholders

The Nigeria Electricity Supply Industry, NESI, would require investments of over $100 billion in the next 20 years, to achieve a 24-hour daily supply in the country, stakeholders in the power sector have said. The stakeholders met in Abuja for a 2-day seminar to discus and determine a strategic approach for the development of the Performance Improvement Plans (PIPs) 2020-2024, as recently requested by Nigerian Electricity Regulatory Commission, NERC. The seminar was convened by Association of Nigerian Electricity Distributors, ANED, in collaboration with the European Union, EU, AFD, and USAID/Power Africa NPSP project, with the participation of DISCOs and other NESI stakeholders.

The Director, Research and Advocacy, ANED, Mr. Sunday Oduntan, said that the PIPs guidelines issued by NERC were a key element of the Power Sector Recovery Programme, PSRP.  He said: “According to a recent study published by the French Development Agency and the European Union, Nigerian power distribution sector would need to invest more than USD 10 billion in the next five years to reach reasonable standards in quality of supply and service”.

“Indeed, NESI as a whole needs to invest more than USD 100 billion in the next 20 years if Nigeria wants to cover 24/7 hours of power supply to its citizens. The preparation of the PIPs is an opportunity for DISCOs to set out what they intend to deliver to customers over the five-year period as well as the associated costs. It is an output-based plan that states the target outputs over the planning horizon, the programs and activities that will lead to the realisation of those outputs, the human and material resources required, the projected cost and analysis of the risk factors and their proposed mitigation measures. In this regard, PIPs will also be the basis for the defining realistic Performance Standards and Key Performance Indicators, KPIs, for the next five-year tariff period by the commission, with emphasis on improvement in energy throughput and delivery by DISCOs, reduction in Aggregate Technical/Commercial losses and overall improvement in service delivery to customers”. Once approved by NERC, each DISCO’s PIPs will be a fundamental pillar of the major tariff review aimed at improving the Nigerian Electricity Supply Industry, NESI, as issued in the PSRP.

The process will involve a review of the application of the CAPEX in MYTO 2015 as the new revenue requirement of the sector should cover the investment and operating cost of efficiently providing electricity services to consumers. Other parameters will also be updated in this major review such as inflation, gas price, foreign exchange rate, energy generated, etc. The approved PIP will be a public-facing document for DISCOs and it will be monitored by the commission to ensure that the DISCOs meet their commitments. PIPs basically will cover four main plans that will be differently applied in the different market segments which include Operational Plans Distribution Master Plan, ATC&C Loss Reduction Plan, Customer Service Improvement Plan, Management Improvement Plans.


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