In March alone, Nigeria’s electricity grid has collapsed twice, resulting in a nationwide blackout. Among other factors, the regular collapse of the power grid is unconnected to poor utility performance, theft of grid equipment, weather, as well as insufficient funding.
According to a report by TheConversation, Nigeria’s national electricity grid has collapsed more than 200 times in the last nine years and in sub-Saharan Africa, every 1% increase in power outages (in terms of hours) has been associated with a 2.86% decrease in gross domestic product (GDP). This translates to a loss of about US$28 billion in GDP.
However, as part of efforts to resuscitate power generation and ensure even distribution of electricity across the country, the Nigerian Bulk Electricity Trading Plc (NBET) has approved and processed the sum of N9 billion from the Power Sector Reform Programme (PRSP) to all to power generation companies (GenCos).
The NBET also disclosed that it paid all GenCos the sum of N39 billion for power generated in January. This brings the total payments to GenCos in the last two months to over N80 billion.
“NBET paid N39 billion to GENCOs in first tranche of payments towards the settlement of January 2022 Payment Cycle. DisCos performance for same period is 51 per cent.
“Another N9 billion from the PRSP has been approved and processed by NBET as further payments to the GenCos”, it added.
According to the NBET, all GenCos are expected to also make similar payments to the gas suppliers. The NBET, incorporated on the 29th day of July 2010 and 100% owned by the Federal Government of Nigeria, is the manager and administrator of the electricity pool (‘The Pool’) in the Nigerian Electricity Supply Industry (NESI).
In an earlier report by Investors King, Financial Derivatives Company (FDC) Limited revealed that Nigeria will require about $100 billion in funding to solve its electricity supply challenges over the next 20 years, as investors are willing to actively participate in the power sector through partnerships, joint ventures, training of personnel and building of transmission and distribution infrastructure if only necessary reforms are put in place.
According to the report by FDC, of the estimated $100 billion in investment required to bridge the gap, renewable energy sources are likely to form the bulk of Nigeria’s energy solutions as global warming and climate change restrict investment in traditional energy sources.
