A Review of the Nigerian Energy Industry

Investors in Nigeria’s power sector to use license for 25 years

Dr. Sam Amadi26 April 2013, Abuja – The Nigerian Electricity Regulatory Commission, NERC, has revealed that investors in the nation’s power sector, who have been issued licenses by the commission, stand a chance of using such licence for a cumulative 25 years.

NERC chairman, Dr Sam Amadi, who disclosed this, said though Section 71(10) of the Electric Power Sector Act 2005 provides that a license shall be valid for a period not exceeding 10 years, and an extension by NERC for five years, “Section 72 (1) guarantees the licensee a cumulative license of 25 years.”

According to him, this comprised of initial 10 years grant, a five year extension and another 10 years upon renewal.

Amadi spoke in Abuja at the transaction signing ceremony between the federal government and investors in the power sector, maintaining that his commission reserved the power to interpret the provision of the act establishing it.

“We have adopted this interpretation to mitigate the risks short license tenure creates and also to provide financials and other contracting entities the comfort they require to accommodate the long-term gestation of most electricity industry projects,” he said.

According to him, clarification on the matter became imperative so as to assure investors and stakeholders in the Nigeria electricity supply industry that upon a proper application and subject to compliance with terms of conditions of the license, the combined effect of sections 71 (10) and 72 (1) guarantee sufficient time to recoup their investments.

In this article

Join the Conversation