What is PSRP
In 2001, the Federal Government of Nigeria launched a far-reaching set of power sector reforms that ultimately led to the unbundling of the state-owned electricity monopoly and privatisation of the successor generation and distribution companies in 2013.
The initial design of the reforms envisaged four stages of development, ultimately resulting in “a competitive, efficient, private sector-led power sector regulated by the Nigerian Electricity Regulatory Commission (NERC), with the Ministry of Power providing general policy oversight.”
The Pre-Transitional Period began with the unbundling of the Power Holding Company of Nigeria (PHCN) in 2005. During this period, privatisation of the Distribution Companies (DisCos) and Generation Companies (GenCos) occurred and was concluded in November 2013. The Interim period also commenced in November 2013 and was characterised by the allocation of sector cash deficits across all market participants due to the absence of commercial trading structures prior to expected tariff reviews;
The Contract Based Market (“CBM”), also referred to as the Transitional Electricity Market (TEM), involves active trading of bulk power by NBET, as a buyer of power from GenCos and IPPs and a seller of purchased power to DisCos;
The Medium-Term Electricity Market requires the cessation of NBET and the novation of contracts between NBET and GenCos/Independent Power Producers (IPP) to the DisCos. In this stage, the DisCos will commence the direct purchase of power from the GenCos/IPPs for onward sale to consumers; and
The Long-Term Market will be characterised by bilateral contracts between electricity buyers and sellers at all levels and a central balancing mechanism through the creation of a spot electricity market.