Adebayo Adelabu, Nigeria’s Minister of Power says the power sector in the country is not for short term investors. He said the sector requires long term investments, adding that making profit will not be a problem for investors who are prepared to invest.
Adelabu comment comes on the heels of yesterday’s collapse of the National Grid. The grid has collapsed twice within one week, raising apprehension among electricity users across the country.
The implication is that many part of the country has now been thrown into total darkness.
The minister also spoke on the recently signed Electricity Act, saying it will ensure serious improvement in electricity for consumers in the country.
The Electricity Act, which according to keen stakeholders in the energy sector has the potential to turn around power generation and distribution in the county, was signed by former President Muhammadu Buhari before leaving office.
According to the Act, unlike in the past state governments can now generate, transmit and distribute power to respective customers within their domains.
The minister spoke at the ongoing Nigeria Energy conference and exhibition in Lagos, saying the Act is a game – changer for the energy sector.
He said, “As a game-changer that reformed the NESI, the Electricity Act will, undoubtedly, engender increased access to electricity and regulatory oversight, clean energy transition, improved service delivery, and infrastructural developments. In particular, the act will stimulate economic growth by creating a conducive environment for investment and competition. It will generate job opportunities, encourage entrepreneurship, and attract foreign direct investments.
“Of course, a lot of investment is required in the power sector. In three weeks, I’ve seen humongous investments that have come into this sector. But what are the steps that are required for those investment opportunities to reap the benefit of those investments, additional investments in the form of equity and capex need to come into this industry.
“The power sector is not an industry for short-term players to invest in less than two to three years and expect to make maximum benefits. The industry requires medium to long-term investments. Investors must understand that the moment we can break even, we will start making profits in the power sector.”
Adelabu also urged operators in the NESI value chain to improve their service delivery, adding that Nigeria’s energy expansion plan of 60,000 Megawatts by 2060 is an achievable target. He therefore called on gas companies, GenCos, TCN, and DIScO to showcase their success stories in generating and transmitting power to the last mile that pays for all the segments of operators in the value chain. He emphasised that it is not enough to generate power, but also to transmit at least 80 per cent of what is generated to the end users of electricity.
Meanwhile, a Professor of Energy/Electricity Law at the University of Lagos, Yemi Oke said yesterday that state governments cannot do much in the area of investment in the sector because of the huge capital required. He said what the country needs at the moment is private sector investment to take the sector out of the doldrums.
