One of the critical stages is the Transitional Electricity Market (TEM), characterized by Nigerian Bulk Electricity Trading (NBET) active trading of bulk power, as a buyer from the generation companies and independent power plans and a reseller to the distribution companies.
However, in January 2015, when TEM was effectively declared, not all the predetermined pre-requisites had been met. This meant that the reforms are still at the TEM stage, while commercial operations had not yet been fully implemented.
Nigeria has 13,400MW of installed power generation capacity, of which 8,000MW is mechanically available. However, less than 4,000 MW has been dispatched on average over the last 2 years due to constraints in gas supply, electricity transmission, and distribution. The lack of a constant electricity supply has affected consumers’ willingness to pay and contributed to an inherent shortfall in the tariff and the accrued sector cash deficit.
The sector thus faces multiple challenges relating to infrastructure, liquidity, and governance that require specific and urgent attention.
In May 2016, the Federal Government initiated the roadmap for incremental, steady, and uninterrupted power supply. The 2016 Roadmap and related milestones transition into a comprehensive electricity market intervention that is the Power Sector Recovery Programme (PSRP).
The PSRP is a series of policy actions, operational, governance, and financial interventions to be implemented for five years (2017–2021) to RESET the Nigerian Electricity Supply Industry (NESI) for future growth. The PSRP lays out plans to improve the financial capacity of NBET and improve the viability of the distribution companies in the country.
Hon. Minister of Power, Works & Housing, Mr Babatunde Fashola, SAN speaking on the theme, “The Federal Government Commitment to the Power Sector Recovery Programme (PSRP)” during a Media Engagement Workshop on the PSRP at the Auditorium of the Ministry of Power, Works and Housing Headquarters, Power House, Maitama, Abuja, FCT.
A dedicated team was established to coordinate and monitor the implementation of the programme. The PSRP Implementation Monitoring Team reports to the Economic Management Team, which is chaired by the Vice-President.
The following milestones in the sector are part of the PSRP to reform, respond to, and resolve the challenges thrown up by privatization:
- Payment of N27 billion Ministries, Departments and Agencies (MDA) debt to DisCos and monthly directives to the Ministry of Finance to settle government debt as approved by FEC.
- N701 billion payment assurance facility to NBET to enable payments to the Generation Companies (GenCos) to cover the payment shortfall from DisCos.
- Appointment of Chairman of NERC to ensure the Regulatory Commission is properly constituted to act.Eligible customer policy to provide alternative access to power for large consumers like manufacturers who are not satisfied with their DisCos.
- The Meter Asset Provider will create an alternative source of supply of meters to consumers apart from direct supply from DisCos.
- A 10 (ten) year transmission expansion plan to increase transmission capacity.
- Recovery of 720 abandoned containers to complete about 90 transmission projects and some power generation plants awarded by previous administrations.
- Approval by the Federal Executive Council (FEC) of N72 Billion for investment in Distribution equipment to help distribute unutilized 2000 MW available energy.
- Rapid deployment of off-grid capacities as an alternative to the on-grid supply is required to provide a captive power supply to under-served and unserved communities and clusters like markets, universities, and rural communities.