The licenses, granted under the privatisation exercise, were initially designed to last for a decade. As the review date approaches, there is apprehension among power sector investors uncertain about license retention.
The review will assess key performance indicators (KPIs), service level agreements (SLAs), and vesting contracts.
The licences granted to operators and players in the power sector under the privatisation exercise was designed to last for 10 years, implying it has 10-year moratorium from November 1, 2013 to October 31, 2023.
While there is palpable fear, some key stakeholders have called for caution, saying the entire privatisation initiative was not properly structured to support private sector investment.
Those who spoke to our correspondent critically examined how the Nigerian government fared in its original 60 per cent equity stakeholding in the privatised power sector ecosystem and what the privatisation of the electricity sector value chain contributed significantly to improving the general wellbeing of the nation’s electricity sector value chain/economy.
Addressing the fear, former power minister, Prof. Barth Nnaji blamed certain regulatory hiccups and inadequate policy direction to whatever imbalances the sector has witnessed.
According to Nnaji, the Nigerian Electricity Regulatory Commission (NERC) has cautiously failed to implement a cost-reflective tariff regime which has negatively and significantly affected DisCos’ return on investment.
Nnaji said the decision by NERC to discharge that responsibility could be political given that the metering gap on the one hand and appropriate billing on the other will choke citizens who are already grumbling over escalating costs of living after petrol subsidy removal.
He further asserted that the erosion of the currency in Nigeria, a type not yet seen in other countries, heavily deterred DisCos from investing in infrastructure and also adequately providing technical support services to decaying assets.
“We should understand that most parts used in servicing critical assets are imported and with foreign exchange fluctuating and rising as well as being in short supply, it limits the ability of DisCos to procure necessary equipment to support service delivery,” he said
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