Recognizing the importance of a stable power supply for economic growth, President Tinubu signed the 2023 Electricity Bill into law, aiming to reform the electricity sector and promote competition. The bill acts as a framework for Nigeria’s Energy Sector, focused on guiding the operation of the electricity market and supporting sustainable initiatives to attract investments across the energy value chain.
The bill has provided companies with incentives to invest in renewable energy projects, develop mini-grids, and more, which various companies have begun to leverage. Some of the key provisions of the Act include:
- State Electricity Markets: States have the authority to license electricity operations, aiming to reduce reliance on the national grid.
- Independent Systems Operator (ISO): The Transmission Company of Nigeria (TCN) is required to establish an Independent Systems Operator (ISO) for market functions.
- Renewable Energy Development: The Act promotes the use of renewable energy, with the Nigerian Electricity Regulatory Commission (NERC) regulating and awarding licenses for renewable projects. Tax incentives from the Ministry of Finance are designed to make renewable energy more attractive.
- National Hydroelectric Commission (N-HYPPADEC): This commission formulates policies for the development of hydroelectric power-producing areas and receives 10% of revenue from hydroelectric dams.
- Integrated Electricity Policy (NIEPSIP): The Ministry of Power is mandated to create and publish an Integrated National Electricity Policy and Strategic Implementation Plan within one year of the Act’s commencement.
The Electricity Act 2023 not only facilitates private sector investment in Nigeria’s electricity sector but also establishes a stable regulatory framework, reinforcing investor rights.
