Geometric Power CEO Nnaji Urges States To Leverage PPPs For Efficient Electricity Distribution

…Advocates Regional Grids, Cost-Reflective Tariffs For Private Sector Participation

A former Minister of Power, Prof. Bart Nnaji, has urged state governments to consider public-private partnerships (PPPs) as a way to procure and manage power infrastructure within their regions.

Nnaji made this call while presenting a paper titled “The Decentralization of the Nigerian Electricity Supply Industry (NESI) and the Role of the States in Rural Electrification: The Private Investor’s Perspective” at the first quarter 2024 Nigeria Public-Private Partnership Network (NPPPN) meeting.

His advocacy comes on the heels of the passage of the Electricity Act of 2023, which empowers states to procure and manage their power infrastructure.

Nnaji, who is the CEO of Geometric Power LTD, said that while the ownership and control of power infrastructure have been decentralised, it wouldn’t be easy for states to independently venture into it due to the high costs, technological implications, and potential adverse competition if states seek to control the infrastructure individually.

He opined that the better option would be for states to take advantage of the decentralisation by partnering to establish regional grids due to the substantial cost involved.

“There are several states that believe that they can easily jump in and begin to develop power infrastructure, but the sort of financial requirement to build power infrastructure is quite a lot.

“In Nigeria, depending on the fuel source, it will cost about $1.5 million per megawatts… That is a lot just for 1MW and that is just to build the power plant, and you haven’t built the substations and all the other required infrastructure.

“So this is why it is very important that partnerships be strongly encouraged. Public Private Partnership is what delivers success; where states play their role and make their contribution.

“However, if the states decide that they want to be in control then we are going back to the NEPA days and that can be a serious problem,” Nnaji said on Thursday.

While lauding the decentralisation of electricity, he stressed the need for cost-reflective tariffs to encourage private sector participation and state enactment and enforcement of state regulations to curb power theft.

Earlier, the Director-General of the Infrastructure Concession Regulatory Commission (ICRC), Michael Ohiani, stated, “Every hand needs to be on deck as the nation cannot witness significant development in the absence of adequate Power supply”.

Ohiani commended the 26 states in Nigeria that have enacted their PPP laws, emphasizing that the laws will incentivise private sector involvement in the states. He pledged to support members of NPPPN seeking to undertake PPP projects and states that want to enact their laws.