The Minister of Power, Adebayo Adelabu has placed a strong emphasis on growing local content and decreasing dependency on imported power equipment in order to attain 6,000MW by December 2024.
This was disclosed by the Minister while briefing press men after meeting with major stakeholders in the electricity supply industry on Thursday, according to Arise News.
Adelabu stressed that the discussion centred on reducing dependence on imported power equipment in the country.
He underlined the need for increased local content in the power sector to save foreign exchange and create jobs.
The minister noted that the stakeholders as a team made the decision to consciously work toward increasing domestic output in the power sector by putting legislation in motion that will promote compliance and improve the industry.
Aside the power Distribution Companies (Discos) that attended the event, others included Bureau of Public Enterprises (BPE), Nigerian Electricity Regulatory Commission (NERC), an Transmission Company of Nigeria (TCN), among others.
Adelabu stated, “To achieve this goal, we also put together appropriate policies that will support this, that will enable the ease of compliance by the power sector operators. At the same time, appropriate regulations will also be rolled out to ensure compliance and add areas to the local content bill.
“To achieve this, we are going to set up a committee that will start working on it. We will gather the data, we will do a lot of engagement, investigation across all the three segments in the power sector, from generation to transmission and to distribution.
“Our recent visits to some local manufacturers have confirmed that there are, indeed, a very good number of manufacturers that can give us some impressive proportion of what we use in the power sector. And these people will be encouraged.”
“We also need to collaborate with the manufacturers’ association to ensure we achieve this. There is a legislation in the works at the National Assembly on local content that encompasses the power sector.
“This committee will work on accelerating the passage of this bill. If there is need for a public hearing, we will all go there as power sector stakeholders to defend this bill. And I am sure that Mr President will not hesitate to sign this bill into law as soon as it is passed,” he added.
The minister said that increasing national productivity, creating jobs for young people in Nigeria, and giving the government access to more revenue were all benefits of integrating local content into the power industry.
Regarding the matter of attaining 6,000 megawatt (mw) of electricity supply by December 2024, Adelabu declared that obstacles had been identified to achieving the target.
He stated, “We also acknowledged the current face-off with the Manufacturers Association of Nigeria (MAN) in terms of resistance to the new tariff regime, which we believe is the way to go. We have to sustain even manufacturing activities in Nigeria. And on that, what we have decided is to engage them further in terms of meeting with them as a team and having a middle ground.”
Adelabu emphasized the importance of involving manufacturers of smart meters.
The debt of Ministries, Departments, and Agencies (MDAs) was cited by him as a significant obstacle to the Discos’ liquidity.
The minister said, “I can tell you that we have a good case of improvement in the payment of MDAs bills. But the improvement is not satisfactory as far as we are concerned. We believe that continuous debts to Discos is impacting their operations negatively.
“It’s affecting their liquidity, it’s affecting their operations, and even in their returns to pay the energy invoices from the power generating companies.”
Meanwhile, the Director-General of BPE, Ayodeji Gbeleyi drew attention to how the industry’s fiscal system was out of balance, favoring imports over domestic production.
Gbeleyi stated, “The Discos, we’ve also asked them, what are the limitations? So, oftentimes we do not prescribe whether you should buy from China or made in Nigeria and stuff like that.
“We’ve also said to them that on our side as government, 40 per cent of the Discos are still owned by government. So, in that regard, between BPE and Ministry of Finance Incorporated (MOFI), we also push an agenda to ensure that the Discos are also in compliance with any local content policy directive from the regulator, or even under the legislation as envisaged.
“So, we’ll try and push that agenda, and they must take active interest in optimising even their supply chain and working capital. Yes, they’ve also said that they have some challenges. In some cases, the manufacturers require them to make payments of funds or advance payment.
“Given their own working capital situation, they may not be able to do that, but those are details, and I think we can look at that realistically. So, we’ve covered some of those angles.”
