Home Finance A new Senate bill removes investment hurdles in the power sector

A new Senate bill removes investment hurdles in the power sector

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A new Senate bill removes investment hurdles in the power sector-min

A new Senate bill removes investment hurdles in the power sector

On Tuesday, the Senate passed its second reading of a new bill aimed at removing current barriers to private sector investment in the power value chain. The bill was introduced in the red chamber and passed first reading in the Senate.

‘Electricity Bill 2021’ was the title of the bill.

Senator Gabriel Suswan, the bill’s sponsor, stated that if passed, the proposed legislation will attract the funds necessary to close the funding gaps that have existed in the industry since the privatization of the power sector.

He stated that the executive and legislative branches of government had intervened in various ways to alleviate all of the constraints over the course of time.

As Suswan noted, “the challenges have continued to threaten the viability of successor companies, including their financial capacity to invest in network improvement in order to ensure reliable power supply as envisaged in their respective performance agreements.”

According to the senator, the Electricity Power Sector Reform Act 2005 was riddled with flaws and inadequacies, making it unfit for the purpose of adequately regulating the activities of market operators and participants in the post-privatised phase of the industry in its current form.

The need to consolidate all power sector legislation into a single electric statute was also emphasized by the minister, in order to align regulatory responsibilities and ensure clarity of statutory roles, which would make compliance with regulatory requirements by operators easier to achieve.

The creation of an ideal legal framework that will encourage the implementation of relevant regulatory and policy actions is required at this time, according to the authors.

He stated that such legislation would speed the expansion of power generation capacity, better the usage of generated electricity through investment in new technologies that would improve the transmission and distribution of generated electricity, and reduce greenhouse gas emissions.

If the measure is passed, he claims it will give the basis for power diversification through the use of cleaner renewable energy sources such as coal, wind and solar energy, as well ensure a sustainable energy balance overall.

He went on to say that if the legislation is passed again, the new senate bill will remove current barriers to private sector investment across the power value chain, as well as attract the funds necessary to close current funding gaps that have plagued the industry since the privatization of the power sector in 1997.

According to the available industry data, countries that have undergone power sector reforms have recognized the necessity for comprehensive electrical laws that address post-privatization challenges that were not addressed by the reform legislation.

Suswan stated that the law addressed all concerns in the Nigerian electricity sector that require policy, regulation, and statutory guidance.

“Part IV of the law gives a clear direction on the unbundling of the Nigerian Transmission Company into Transmission Service Provider and Independent System Operator in compliance with its license,” he added.

“Parts VII, VIII, IX, and X are concerned with essential concerns in the power business, such as electricity transmission, distribution, and tariffs, respectively.

“The Nigerian Electricity Regulatory Commission and the Rural Electrification Agency retain their duties as regulator and coordinator of rural electrification, respectively, under portions V and XV of the Bill.

“Part XVII of the bill contains two establishment acts, one for the Nigerian Electricity Management Services Agency and the other for the Hydroelectric Power Producing Areas Development Commission.

He explained that the law proposed the creation of the Electricity Disputes Appeal Tribunal, which would be made up of judicial and technical members and would be charged with quickly resolving appeals arising from Commission rulings and other matters falling under the Tribunal’s authority. Appeals.

The measure, he claimed, will diversify the electricity industry to accommodate cleaner renewable energy sources while also encouraging private sector investment.

He recalled that the Electric Power Sector Reform Act of 2005 provided the legal and institutional foundation for the Federal Government’s reform of the Nigerian Electricity Supply Industry, which took place between 2001 and 2013.

After a second reading, Senate President Ahmad Lawan referred the Electricity Bill, 2021, to the Committee on Power for further consideration.

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