Fashola tasks investors on opportunities in power sector

•Operators seeks reduction in value chain licensing process

The Minister for Power, Works and Housing, Babatunde Fashola, yesterday charged foreign and local investors as well as entrepreneurs in Nigeria not to see the challenges in the power sector as obstacles, but rather as opportunities to take up.

He said statistics show that in the years that Nigeria’s economy grew, there was not as much energy generated, as is currently being witnessed, which he said indicates that there are other factors involved in the growth and development.

The Minister made the submissions in an address at the Franco-Nigeria Chamber of Commerce and Industry Economic summit, held as part of activities to mark the French Week 2017 celebration entitled; “the Nigeria power challenge and the ease of doing business in Nigeria.”

According to the minister, investors should make do with investable opportunities in the construction/production of Mini-grids, Solar, Hybrid electricity, supply and manufacturing of meters, as reports indicate that out of estimated 7.5Million consumer, only 4million have access to meters.

“There is something so unique about the resilience spirit among Nigerians which must be tremendously dwelt upon. The power challenge in the country should be an opportunity that I invite all of you to take advantage of. Yet it is difficult to argue that improve power would improve the ease of doing business, the extent and degree is however debatable without number. Enormous opportunities abound for those who know what to do like Schneider Electric,” he said.

He assured Nigerians that before the end of the month, new regulations, which would allow business concerns other than the distribution and generating companies (DISCOS and GENCOS) to invest in the nations’ power sector.

According to him, the new regulation would also open up the field for qualified and competent entrepreneurs to come into the sector as well as the introduction of distinct metering plan for rural and urban areas.

“Currently the country generates 7,000megawatts (MW), but we don’t have enough distribution equipment to distribute about 3,000 of it and that is also another opportunity. We will continue to generate incremental power. In the next two to twelve months there will be a provision of additional 2,000MW to come to the grid, while there would soon be about 29MW from Gombe State, 30MW from Niger state amongst others and that does not include the 215MW we are trying to generate from Kaduna.”

In a communiqué read by the Managing Solicitor, Trizon Law Chamber, Akinmoladun Olamiposi, at the end of the summit, the gathering called for increase in power generation, as this will have a ripple effect on the improvement of the Nigerian economy, as there is still a need for consistent growth in this sector despite improvement in the economy.

“There is an increase in the GDP figures of Nigeria for Quarter 3 of 2017, which stands at 1.4 per cent, and the growth from the statistics seems to be majorly from the slight growth in the oil and gas sector. This means that if the growth in the oil and gas sector is not sustained there might be a recession. Nigeria is plagued with inter-ministerial coordination and legacy issues that pose a challenge to being able to take up the opportunities that are available in the Nigerian economy and especially in the power sector.

“The ease of doing business has improved but much more can be achieved if there was better intergovernmental and inter-ministerial coordination. There is also a need to streamline the work of the multiplicity of regulators in the power industry as supported by Oils and Gas industry. Disparities in the foreign exchange on the importation of equipment and the operations of such operations in Nigeria also adversely affect the opportunities that can be harnessed in the power sector.

“Opportunities in the power sector abound in the alternative power generation sector and this may be assessed through the pioneer status. There are now policies passed by the government to increase the incentive to invest in the alternative power sector and this should be looked into. The pioneer status for solar power investors and other alternative power sectors should also be extended to the equipment that will be used by the investors and entrepreneurs in the industry. In addition pioneer status should not be the only major incentive in the sector. Other issues like access to capital and regulatory framework should also be considered.”

According to communiqué, investors are seeking that the licensing process of the value chain and the processes involved in the power sector takes too long; hence, there is a need to review policies that has allowed for ineffective power generation and distribution.

“Deregulation should be full and not partial and this can help increase interest in the power industry. There is a need to review the licensing permits given for power distribution as this will affect the types of investment and increase the interest of investors in that area. The private sector should also communicate with the government on the challenges on the ease of doing business as this type of feedback will enable the government to have a better understanding of the issues that are faced by the players and the key stakeholders.”

The summit also urged users and players in the power sector to read the laws and regulations on the sector to know how it affects their business

“One of the major challenges of the power sector is availability of requisite infrastructure that will ensure for effective and effective power generation and distribution,” it stated.