Abuja, Nigeria — ESI-AFRICA.COM — 07 December 2011 – Twenty new power generation companies, a distribution firm and the Nigerian Bulk Electricity Trading Company Plc (NBETC) have been formally issued with operational licences by the Nigerian Electricity Regulatory Company (NERC).
NBETC, otherwise known as the ‘Bulk Trader’, got its official trading licence to commence business as an entity in the power sector as well as be the manager of the Federal Government/World Bank’s Partial Risk Guarantee (PRG) scheme.
Eight firms were also granted off-grid generation licences, 10 firms received grid-connected licences, two got licences for embedded generation while one was awarded a licence for a distribution network.
From the 20 new licensees, the Federal Government expects to generate about 6,105 megawatts (MW) of electricity within the next three years, starting from the first quarter of next year.
This calculation is derived from a summation of the proposed generation capacities of each of the 20 companies, and where a licensee, Zuma Energy Nigeria Ltd, plans to generate about 1,200mw from its proposed coal-fired power plant to be located at Itobe in Kogi State.
The plant will be the first of its kind in Nigeria when inaugurated.
Speaking at the ceremony here, minister of power Barth Nnaji expressed government’s excitement with the new development, adding that it was a commendable step towards guaranteeing Nigerians good access to electricity.
Nnaji specifically tasked the new licensees to brace up to the new challenges, reminding them that “government expects you to help move this sector forward because there is no other way.”
Earlier, the President of Independent Power Producers Association of Nigeria (IPPAN), Jerry Gana, stated that ongoing reforms in the power sector, as well as the issuance of new licences to investors, suggested that government’s intention for the sector was genuine.
Meanwhile, Nnaji also disclosed that the Ministry of Power had elected to provide a budget of US$250 million as take-off working capital for both the Bulk Trader and the Nigerian Electricity Liabilities Management Company (NELMCO).
“Each entity will get US$125 million as working capital so that they will hit the ground running and be able to enter into agreements with without any problems, he added.