Experts and other stakeholders have called for enabling environment that would give the private sector the confidence to invest in the power sector.
Speaking at the PwC Nigeria 12th annual power roundtable with the theme: “Sustainable power supply in Nigeria – what next?”, they stressed the need to increase efforts to achieve 100 per cent metering and sustenance of regulatory and policy alignment which has helped the government to bridge the gap between cost and service reflective tariffs versus allowable tariffs.
The stakeholders also advocated for awareness programme and reorientation of the mindset of the populace, a shift from power being considered a public good that the government provides to a service which requires payment, as well as judicial reforms with respect to dispute resolution in the power sector are critical.
According to them, there’s the need to do away with major bottleneck, which will necessitate unlocking the cash flows across the power value chain; and potentially exploring off-grid solutions where industry players can be responsible for the entire value chain.
They highlighted the positives of ongoing projects in the upstream section of the value chain, from cost reflective tariffs to investment in transmission and distribution networks.
The conference also called for funding for future projects is around the energy transition, adding that there is an urgent need to address energy poverty before shifting focus to energy transition in Africa.
Pedro Omontuemhen, Partner and Energy, Utilities & Resources Leader, PwC Nigeria, noted that the sector’s very capital-intensive nature means that much is still required to meet the country’s power needs.
He noted that from power production to transition and distribution, a lot of funding is required, adding that the poverty in Nigeria can partly be attributed to lack of adequate funding of the sector. For Nigeria to have stable electric power, the sector needs to be funded adequately.
Ahmad Rufai Zakari, the Senior Adviser to the President on Infrastructure, noted that the government has started a holistic review of policy in the power sector.
This began with a regulatory and policy alignment that included raising tariffs in a sustainable way, which has helped to eliminate the gap between cost reflective tariffs and allowable tariffs. It is expected that this will incentivise private investors, and particularly drive the Discos to achieve optimisation.
Zakari noted that the next phase of government intervention is centered around providing the infrastructure that will enable stable electric power supply. The Siemens Presidential Power initiative and credit facilities by the Central Bank of Nigeria targeted at the power sector are some of the ways the government is financing this infrastructure.