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Towards Effective Power Sector Reform

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The power sector is one of those sectors of the Nigerian economy that has received critical attention within the past 57 years of the corporate existence of the country as an independent state.
As part of measures to attain desired impact and maximal results in the power sector, vast treaties and hypothesis have been made over the past years, while billions of tax payers money have been sunked in.
The prospect of development, remains but a flicker, a mere shallow reflection of the expected breakthrough from the huge investment invested into the sector.
However, as the country marks its 57 independence celebration, Nigerians are desirous of the full dividends of the huge investment in the power sector.
The fact been that effective power supply is what is needed in the country to drive entrepreneurial growth and enterprise development among the teeming masses and create job opportunities.
Pundits have blamed the challenges in Nigeria power sector reforms on many factors.
One of such factors identified is the use of similar approach or methodology in solving power sector problems, thereby resulting in same old inefficiencies.
Apart from apparent diversion of fund meant for the resuscitation of the ailing sector, the lack of input of real technocrats and experts in policy making and implementation, has also been pointed as been responsible for the woes in the sector.
Musing over the prospect of development in the Nigerian power sector, an expert, Engr. Isaac Adekanya said the lapses in the sector reform were traceable to some missing links in the operation of the power sector.
Adekanya, who is the Port Harcourt branch Chairman of the Nigeria Institute of Electronic, Electrical engineers, disclosed in an exclusive interview with The Tide, that the Nigerian power sector was yet to attain synergy in the three major areas that constitute the sector, such as Power Generation (Genco) power Distribution (DISCO) and Power Transmission (Transco).
According to him, not all the power generated in the country are transmitted and distributed to the end users.
“There are a lot of technical challenges in the generation, transmission and distribution of power in the country. Most of the power projects carried out in the country have no consideration for the distribution and transmission of the generated electricity to the end users. An example is the Omoku power project, which is a huge investment but had not been able to make maximal impact because of the challenges of transmission and distribution”.
Adekanya, who is also a fellow of the Nigeria Society of Engineers said similar challenges exist in the transmission of generated electricity to the National Electricity Centre at Osogbo. He said most of the power generated are wasted along the line before they get to the end users.
In his view, the concentration of generated electricity at the Osogbo Power Centre where the needs of consumers across the country are decided may not be serving the best interest of the various sections of the country.
He noted that such discretionary measures in the allocation of power may not truly represent the electricity demands of the various states of the nation.
Alternatively, Engr. Adekanya suggested that power generation, transmission and distribution should be based on comparative economic advantage, as the various parts of the nation have peculiar natural advantages in strategic location of energy sources.
“The various parts of Nigeria are disposed with vast energy sources that can be explored based on comparative advantage. In the north, there is abundance of solar energy source, in the middle belt there are rivers that can be harnessed for hydro power generation while the Niger Delta is blessed with enormous gas potentials for thermal energy.
“These energy sources can be explored fully to serve the power need of the various areas where they are located. The idea of evacuating generated power to Osogbo before distribution may not be entirely the best option for the country. Nigerians are in serious need of electricity to do their business. It is regrettable that at 57, the country still runs a generator economy”.
Adekanya, who is a proponent of diversification as the panacea for effective power sector reform, also faulted the allocation of the DISCO by the federal government.
He said the DISCOs were given out on political consideration rather than competence and liberalisation.
He noted that the conspicuous absence, or non involvement of experts with the requisite technical knowhow in the DISCO stifles development in the sub-sector, as those involved are more concerned about profit motive than effective service delivery.
He therefore advocated for full liberalisation of the DISCO for more players to be involved on a note of competition in service delivery as in the case of the telecommunication industry.
In his submission, another expert in renewable energy, Elder Elkanah Hanson said the future of Nigeria’s industrialisation depended on renewable energy which is a global phenomenon.
Elder hanson, who spoke with The Tide correspondent in Port Harcourt recently, said nations of the world are taking advantage of renewable energy to serve their electricity needs.
The elder statesman, pointed out that Nigerian electricity laws were based on colonial orientation and as such do not serve our peculiar development need.
To attain sustainable development in power sector reforms, he called for a total revocation of the obsolete electricity laws and adoption of inventions that are best suited for our polity.
Elder Hanson, who described the concentration of generated electricity at Osogbo as “economic piracy”, said the major problem with Nigeria was its behemoth federal status, that disposses the component units of the country from developing at their own pace.
He called for total restructuring of the centralised federal structure of the country and added that electricity should not be the exclusive reserve of the Federal Government.
“At 57 Nigeria has come of age and should not be toddling again. It is ridiculous that we are still battling with defects in the power sector, our value system must change. The fight against corruption must be thorough and complete. The Federal Government should declare a state of emergency in the power sector. The lumping of power ministry with works and housing is wrong. The power ministry should be made to stand on its own and an expert should be saddled with the responsibility of running the ministry”.
Meanwhile, the Federal Government has stated that it was not against states building their own power projects to support incremental power.
Minister of power, works and Housing, Babatunde Fashola disclosed this at a meeting of the National Council of Power (NACOP) held in Jos, Pleateau State recently.
The minister explained that the law allows states to embark on electricity distribution under license through the Nigeria Electricity Regulatory Commission (NERC).
Fashiola further hinted that in the Power Sector Recovery Programme (PSRC) of the Federal Government, states are vested with enormous responsibilities to ensure that, “their residents comply with safety standards on building by not building on the right of way of 332/133,33 and 11KVA lines”.
He also urged states to encourage their residents to pay for consumed energy while the metering issue and estimated billing is addressed.
Fashola, who described the meter system as cost effective, called on state governments to set up debt verification teams with audit capacity to ascertain the debt profile and develop a payment plan which can be budgeted for. This he noted will help liquidity issues and contribute to the power sector reforms.
Considering the importance of power in the economic development of any nation, the 57th Independence anniversary of Nigeria offers an avenue for a critical review of the power sector for better service delivery.
The fact remains that competence and not politics should be the criteria for participation in the power sector. This will give more room for innovation and efficiency.

Taneh Beemene

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Oil & Energy

TotalEnergies, Conoil Sign Deal To Boost Oil Production

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TotalEnergies has signed agreements with Conoil Producing Limited under which to acquire from Conoil a 50 per cent interest in Oil Processing Licence (OPL) 257, a deep-water offshore oil block in Nigeria.
The deal entails Conoil also acquiring a 40 per cent participating interest held by TotalEnergies in Oil Minining Lease (OML) 136, both located offshore Nigeria.
Upon completion of this transaction, TotalEnergies’ interest in OPL257 would be increased from 40 per cent to 90 per cent, while Conoil will retain a 10% interest in this block.
Covering an area of around 370 square kilometres, OPL 257 is located 150 kilometers offshore from the coast of Nigeria. “This block is adjacent to PPL 261, where TotalEnergies (24%) and its partners discovered in 2005 the Egina South field, which extends into OPL257.
Senior Vice-President Africa, Exploration & Production at TotalEnergies, Mike Sangster, said “An appraisal well of Egina South is planned to be drilled in 2026 on OPL257 side, and the field is expected to be developed as a tie-back to the Egina FPSO, located approximately 30 km away.
“This transaction, built on our longstanding partnership with Conoil, will enable TotalEnergies to proceed with the appraisal of the Egina South discovery, an attractive tie-back opportunity for Egina FPSO.
“This fits perfectly with our strategy to leverage existing production facilities to profitably develop additional resources and to focus on our operated gas and offshore oil assets in Nigeria”.
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Oil & Energy

“COP30: FG, Brazil Partner On Carbon Emissions Reduction

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The Federal Government and Brazil have deepened collaboration on climate action, focusing on sustainable agriculture, renewable energy, and the reduction of black carbon emissions.
The partnership is anchored in South-South cooperation through the Brazil-Nigeria Strategic Dialogue Mechanism, which facilitates the exchange of ideas, technology, and policy alignment within the global climate framework, particularly the Paris Agreement.
The Executive Secretary, Amazon Interstates Consortium, Marcello Brito, made the disclosure during an interview with newsmen, in Abuja, on the sidelines of the 2025 COP30 United Nations Climate Change Conference, held in Belem, Brazil.
Brito emphasized that both nations are committed to global efforts aimed at curbing black carbon emissions, a critical component of climate mitigation strategies.
“Nigeria and Brazil are collaborating on climate change remedies primarily through the Green Imperative Project (GIP) for sustainable agriculture, and by working together on renewable energy transition and climate finance mobilisation,” Brito said.
“These efforts are part of a broader strategic partnership aimed at fostering sustainable development and inclusive growth between the two Global South nations,” Brito added.
TheTide gathered that President Bola Ahmed Tinubu announced an ambitious plan to mobilize up to $3 billion annually in climate finance, through its National Carbon Market Framework and Climate Change Fund, positioning itself as a leader in nature-positive investment across the Global South.
Represented by the Vice President, Senator Kashim Shettima, Tinubu made the announcement during a high-level thematic session of the conference titled ‘Climate and Nature: Forests and Oceans’
Tinubu stressed that Nigeria’s climate strategy is rooted in restoring balance between nature, development, and economic resilience.
Hosted in the heart of the Amazon, on November 10—21, the 30th COP30 conference brought together the international community to discuss key climate issues, focusing on implementing the Paris Agreement, reviewing nationally determined contributions (NDCs), and advancing goals for energy transition, climate finance, forest conservation, and adaptation.
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Oil & Energy

DisCo Debts, Major Barrier To New Grid Projects In Nigeria ……. Stakeholders 

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Energy industry leaders and lenders have raised concerns that the high-risk legacy debts of Distribution Companies (DisCos) and unclear regulatory frameworks are significant barriers to the financing and development of new grid-connected power projects in Nigeria.
The consensus among financiers and power sector executives is that addressing legacy DisCo debt, improving contractual transparency, and streamlining regulatory frameworks are critical to unlocking private investment in Nigeria’s power infrastructure.
Speaking in the context of new grid-connected power plants, during panel sessions at the just concluded Lagos Chamber of Commerce and Industry (LCCI) Power Conference, Senior Vice President at Stanbic IBTC Infrastructure Fund, Jumoke Ayo-Famisa, explained the cautious approach lenders take when evaluating embedded or grid-scale power projects.
Ayo-Famisa who emphasized the critical importance of clarity around off-takers and contract structures said “If someone approaches us today with an embedded power project, the first question is always: Who is the off-taker? Who are you signing the contract with?” . “In Lagos State, for example, there is Eko Electricity and Excel Distribution Company Limited. Knowing this is important,” she said.
She highlighted the nuances in contract types, whether the developer is responsible just for generation or for the full chain, including distribution and collection.
“Collection is very important because you would be wondering, ‘is the cash going to be commingled with whatever is happening at the major DISCO level, is it ring-fenced, what is the cash flow waterfall,” she stated.
Ayo-Famisa pointed out that the major stumbling block remains the “high leverage in the books of the legacy DisCos.” Incoming project financiers want to be confident that their cash flows won’t be exposed to the financial risks of these indebted entities. This makes clarity on contractual relationships and cash flow mechanisms a top priority.
Noting that tariff clarity also remains a challenge, Ayo-Famisa said “Some states have come out to clearly say that there is no subsidy; some are saying they are exploring solutions for the lower income segments. So, the clarity would be on who is responsible for the tariff, is this sponsored?, Can they change tariffs?, In terms of if their cost rises, they can pass it on, or they have to wait for the regulator.
“Unlike, what you find in the willing seller-willing buyer, where they negotiate and agree on their prices. Now they are going into grid, there is Band A, Band B, if my power goes into, say, Ikeja Electric, or I have a contract with them, “am I commingled with whatever is happening across their multiple bands?”
Also speaking, Group Managing Director and CEO of West Power & Gas Limited, Wola Joseph Condotti, stressed the dual-edged nature of decentralization in the power sector.
“Of course, decentralization brings us closer to the people as the jurisdiction is now clear. You also know that your tariff would be reflective of the type of people living in that environment. You cannot take the Lagos tariff to Zamfara, and this is what has been happening before now in the power sector. So, decentralization brings about a more customized solution to issues you find on the ground.
“Some of the issues I see are those that bother on capacity. It was a centrally run system that had 11 DISCOs. Of the 11 DISCOs, I think there are 3 or 4 of us today that are surviving or alive, if I may put it that way. If you go to electricity generation companies, they are doing much better,” she said.
Condotti highlighted regulatory overlaps as another complication, especially when power generation or distribution crosses state lines.
She said, “Investors would definitely have a problem. Say if you have a plant in Ogun State supplying power to another state, say Lagos State; you are automatically regulated by NERC. But the truth is that the state regulator of Ogun State and Lagos State wants you to comply with certain regulatory standards.”
With the growing demand for reliable electricity and an urgent need for infrastructure expansion, the ability to navigate these complex financial and regulatory landscapes would determine the pace at which new grid-connected power projects can be developed.
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