Nigeria: IPP’s and Transmission Service Providers Must Deliver on Energy Commitments or Face Penalties

  • Electricity operators who fail to deliver on set targets will face penalties, the government of Nigeria has promised.

The Nigerian government has said that electricity companies that fail to deliver assigned volumes will face penalties under newly agreed contracts. The step will be taken as part of measures to boost power supply in the country, and explains the government’s recent assurance that supply will improve from July, Power Minister Abubakar Aliyu said.

Power operators, including generating firms (Gencos), the Transmission Company of Nigeria and those distributing (DISCOs), signed contracts with the government recently, outlining specific amounts of electricity they will offer customers.

“We signed reactivated contracts with the operators, generators, TCN and the distributors. This means if you have a firm commitment from whoever generates what he says he is going to give, he must give, otherwise there will be a penalty,” said Aliyu.

The operations will be overseen by the Nigerian Electricity Regulatory Commission (NERC) to ensure all parties keep to the agreement.

Nigeria has a serious energy security problem

Nigeria’s broken power system has faced even more problems in recent months, generating below capacity with the grid repeatedly collapsing.

The government has given several reasons for the poor electricity supply which often leaves most citizens without power for hours and sometimes days. The Power Minister said insecurity was also a problem affecting the sector’s progress.

“Like vandalism around oil pipelines which affects gas and once you don’t get gas to power, you don’t get the megawatts, once there is no power coming from the generators, you know what that means,” he said.

Aliyu said efforts are being made to ensure that issues are addressed. He explained issues around right of way do exist, but some of them have been dealt with while others are still lingering.

Speaking on the government’s pact with Siemens, he said officials have been invited for the factory-testing of the 10 Mobitra transformers in Italy ahead of commencement of delivery in September 2022

Author: Nomvuyo Tena

Nomvuyo Tena is a Content Producer at Vuka Group and is as passionate about the energy transition in Africa as she is about music and Beyonce. 

This article was originally published on ESI Africa and is republished with permission with minor editorial changes.


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