Nigeria’s Privatized Power Sector Is Experiencing Teething Problems

The low power supply, vandalism and poor metering are frustrating Nigeria’s plans for a robust privatized power sector.
Published: Fri 11 Jul 2014
 

The commission’s mandate is to create a competitive electricity market in Nigeria and the regulatory framework has been critical in supporting the electrical reform in Nigeria. However, there are still a number of challenges facing the power industry, says Tony Akah, General Manager, Government & Consumer Affairs, Nigerian Electricity Regulatory Commission (NERC), who spoke to us at the African Utility Week.

Challenges

The country has a gas shortage which is a major problem since most of their turbines run off gas. This is hindering the capacity of the generators. Distribution companies claim that they don’t have enough revenue-most have requested a tariff which is more cost-reflective. Vandalisation and poor metering are also major concerns.

Akah says that the government aims to improve the gas infrastructure and increase gas supply for the generating plants. According to Akah, the market is not balanced enough. Generating companies are not being fully paid. He says, “We are working to resolve these issues. To ensure that the market is balanced, market players must abide by the rules so that the customer is well protected.”

Metering targets won’t be reached

Distribution companies have committed to installing meters within a five year period but they are probably still quite far from meeting set targets, explains Akah. But, metering customers is critical and so the Customer Advancement Meter program has been established in response. Willing customers pay for the meters and then the utility pays the customer back with interest.

Says Akah, “We need to stop poor billing processes and the exploitation of customers. Once capacity and the infrastructure are developed, distributors won’t have any more excuses.”