Adelabu needs to avoid past mistakes in the power sector

Stakeholders are focusing their attention on the new Minister of Power, Adebayo Adelabu, and his vow to overhaul the power industry through a seven-year program the government claims it is minting in the midst of the nation’s acute energy crisis. To restore the uneven generation, transmission, and distribution infrastructures that previous administrations failed to solve, the electricity industry urgently needs surgical intervention. In order to steer the economy in a new direction and avoid repeating past mistakes, President Bola Tinubu and Adelabu must take the necessary, audacious, and innovative steps.

Nigeria continues to face problems with low electrification rates, unequal distribution, shortages, inadequate infrastructure, a lack of investment, corruption, political instability, and poor governance even after successive administrations invested billions of dollars in the sector. Adelabu must summon the strength necessary to swiftly save the sector with Tinubu’s support.

The insufficient generation and supply of power has severely restricted Nigeria’s economic potential. According to verified data from the Nigeria Electricity System Operator, the total amount of power transmitted through the country’s sole grid came close to 5,000 megawatts in March. 5,801.6MW was the nation’s all-time highest generation capacity. This is appalling for the biggest economy in Africa and the 31st largest in the world.

According to some experts, the energy power supply needs reach 78,000 MW by 2030 for the economy to grow at a 10% annual rate. This will demand a large investment throughout the power value chain.

It should be investigated how to raise domestic and foreign funding for energy projects through public-private partnerships, grants, and loans. To finance sustainable energy efforts, the government can create cutting-edge financing methods like green bonds. To acquire technical assistance and funds, donors and international development agencies should effectively collaborate.

Attracting foreign direct investment is essential because of the size of the investment needed—$10 billion to $20 billion each year for ten years, according to analysts. There should be a short-term emergency effort to dramatically improve transmission and distribution in order to increase the effective supply.

To remove all the obstacles to the effective implementation of the agreements and produce significant results, the 2013 privatization should be reconsidered. It is also necessary to take pragmatic steps to resolve the gas-related issues that are preventing the 21 gas-fired facilities from operating to their full potential.

The 11 distribution businesses and 6 generating companies’ buyers lacked the technical know-how and financial resources necessary to deliver the projected benefit through investment, infrastructure replacement, and implementation. The government ought to do every effort to draw FDI and reputable foreign investors to the industry. In order to make room for powerful international power sector enterprises, it should make plans to give up its minority holdings in the privatized companies and prod the current majority investors to do the same.

In order to fully benefit from the Electricity Act of 2023, which grants states, businesses, and individuals the right to produce, transfer, and distribute electricity, Tinubu needs mobilize state governors. The state governments ought to create mini-grids and micro-grids as well to boost their economy by supplying power to rural areas and SMEs.

Off-grid and mini-grid systems can effectively electrify distant and neglected areas. It is also crucial to invest in renewable energy sources like solar, wind, hydro, and geothermal power to diversify the energy mix.

Businesses’ reliance on diesel-powered generators for self-generation drives up expenses significantly. Lack of power can sometimes spell the end for small businesses.

Transparent and responsible governance is necessary to draw in both domestic and foreign investment. It is necessary to do away with the cronyism, corruption, and lack of merit in personnel nominations to regulatory and enabling agencies that characterized previous governments.

Lessons learned from other nations like Egypt, the United Arab Emirates, and Qatar show that if you have the determination, commitment, and tenacity, you can significantly increase your power capacity in a short period of time.

Adelabu and the Tinubu administration must succeed in their major test of handling the power morass.