Fashola tells state governors no law prevents them from generating power within their domains

WORKS and power minister Babatunde Fashola has thrown down the gauntlet to the governors of Nigeria's 36 states challenging them to rise to the electricity challenge facing the nation saying no law prevents them from generating and distributing power.

Nigeria is currently gripped by an electricity crisis as the nation only generates about 4,000MW of power and even this is not effectively distributed. With power supply only about one tenth of demand, the nation has been plunged into darkness and almost every family relies on private generators to meet their electricity needs.

Challenging the state governors to step into the breach, Mr Fashola, the ministers of works, power and housing, said there is nothing in the power sector regulations or law that prohibits state governments from generating, transmitting and distributing their own electricity. Speaking at the Punuka Annual Lecture series held in Lagos, Mr Fashola said that contrary to widely held beliefs, state governments can establish their own power stations, generate, transmit and distribute electricity in areas not covered by the national grid.

He added that Nigerian laws also allows states and establish their own electricity structures to promote and manage their own power stations. He therefore called on state and local governments to pay attention to communities within their territories with limited access to the national grid to improve energy access for them via off-grid solutions.

Mr Fashola said: “There are clearly not areas covered by the grid and therefore constitute a viable area of intervention by a state government to contract their own power supply without reference to the federal government. The reality before privatisation is that the ministry of power had over 50,000 staff, owned trucks, employed electricians who went out to repair faults, the ministry controlled power stations like Jebba, Kainji, Shiroro, Egbin to mention a few and it employed all of those who worked in distribution.

“All that is gone, since November 2013 and from over 50,000 staff, the ministry now has a staff strength of 729 people. There are no electricians, fitters, repair vehicles or distribution staff in our ministry anymore and we do not supply, repair or replace distribution transformers or meters as all of these are now the work of the distribution companies (Discos) under contract with the Bureau of Public Enterprise and under licence by the Nigerian Electricity Regulatory Commission as a matter of law."

Speaking on the topic Developing an Effective and stable regulatory framework for Nigeria’s Electricity Sector, Lessons Learnt from the United Kingdom,  guest speaker at the event  Jonathan Cohen, stressed the need for a unified and holistic approach which he said is key. While he admitted that Nigeria’s power sector has made remarkable progress in the last nine to 10 years, Mr Cohen, however, said much more still needed to be done.

Regarding the privatisation of the sector, Mr Cohen stated that privatisation only works when market signals are robust enough to attract investment and expertise of new sector entrants. He added that this is a condition that seems to be missing in Nigeria’s situation.

Mr Cohen said: “Foreign direct investment into Nigeria’s power sector has not been significant to date. The privatisation of the generating companies and discos were largely financed with debt from Nigerian banks, with most of the equity from Nigerian sponsors."

He added that other factors such as cash shortfalls in the sector, low disco payments, insufficient gas supply to power the existing and expected generation and a weak electricity transmission grid have continued to affect the transition in the sector.