A Review of the Nigerian Energy Industry

NERC to revoke idle electricity licences

16 June 2015, Abuja – The National Electricity Regulatory Commission on Monday disclosed that it had started the process of revoking licences awarded to power generation companies but which had failed to meet the terms and milestones specified in their licences.

Sam-Amadi, NERC.
Dr. Sam Amadi, NERC.boss

The Chairman of NERC, Dr. Sam Amadi, and other commissioners of the regulatory agency, disclosed this at a ceremony in Abuja where licences were presented to four companies with plans to add 774 Megawatts of electricity to the national grid.

Since the commission started issuing licences to power generation companies in 2006, about 124 companies have benefitted from the process but only a few have fulfilled the conditions specified in their licences.

Amadi also assured investors in the sector that regulation would not stifle their profit motive as they had the power to charge tariffs that could help them recover costs efficiently and make profits from their investments.

He advised every licensee in the industry to get cost-effective tariff, adding that the electricity tariff framework had been deregulated.

According to the NERC boss, had all the licencees utilised their licences, Nigeria would have by now been boasting of up to 30 Gigahertz of electricity, that in near term, licences that were not performing would be revoked.

Amadi said, “Going forward, we are going to tighten the screws in terms of licensing in Nigeria. We have no choice but to revoke some licences. That is the only way that we can send the right signal to people across the world to come and invest in Nigeria.

“For somebody with a piece of paper that is not performing, it remains a piece of paper. We have no choice but to make sure that potential investors deliver what they are supposed to deliver.

“Every licence has key performance indicators that are included in the terms of the licence. And it is also expected that within the first six months to three years, each licensee is expected to reach certain thresholds. We started issuing generation licences in 2006. Most of them, up till now, have not gone beyond the issuance of the licences.”


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