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Nigeria ranks 8th African country with well-developed electricity regulatory framework

Nigeria moved up 6 places to rank 8th in this year’s Electricity Regulatory Index Report published by the African Development Bank.

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Nigeria has ranked 8th African country with well-developed electricity regulatory framework, among 36 countries surveyed by the African Development Bank (AfDB) in 2020, moving up 6 places from the 14th position it ranked in 2019.

This is according to the Electricity Regulatory Index report by the African Development Bank (AfDB). The ERI report is a composite index of the AfDB which measures the level of development of electricity sector regulatory frameworks in African countries against international standards and best practices.

The report, which covered thirty-six counties in its third edition, represents the efforts of the AfDB to foster proper electricity regulation in Africa.

In this context, the Vice President, Power, Energy, Climate and Green Growth, at the AfDB, Dr. Kevin Karuiki, submitted that “The AfDB has been at the forefront of efforts to mainstream electricity sector regulation issues in Africa within the broader sector discourse, recognizing the importance of establishing robust legal and regulatory frameworks to support the financial sustainability of the sector and attract private sector investment”.

(READ MORE: Ikeja Electric warns customers not to pay staff for metering)

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The indicators for Regulatory Governance and Regulatory Substance were used to construct the ERI for Governance and Substance (ERIGS) using primary data obtained from questionnaires sent to regulators.

Key highlights from the report

  • 69% of countries surveyed have regulatory mechanisms in place to facilitate electricity access
  • In 21 of the 36 countries surveyed, the utility is not involved in funding rural electrification. The government, NGOs, and consumers do this.
  • In 90% of the countries surveyed, the Executive holds the power to appoint board members and heads of regulatory institutions who report to them. This removes the core of decision-making independence from regulators, who are subjected to subtle and direct political pressure to skew key regulatory decisions towards the political inclination of the government in power.
  • Most countries have legislation to deal with conflict of interest among commissioners and heads of regulatory institutions while in office. However, few have adequate mechanisms to regulate conflict of interest and other ethical issues, affecting the integrity of regulatory decisions.
  • Political authorities have a significant influence on the finances of regulatory authorities. In many instances, laws establishing regulatory institutions do not clearly indicate sources of funds for the institution.

(READ MORE: Meter roll-out: FBNQuest partners investment firms to bridge $1billion metering gap)

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What they are saying

The Director for Energy Financial Solutions, Policy and Regulations, at the AfDB, Wale Shonibare, submitted that “Covid-19 related restrictions had increased residential electricity demand and decreased industrial/commercial demand, which had resulted in shortfalls in the projected revenues of utilities”.

Shonibare further noted that “regulators will be required to play an even more critical and central role post-Covid-19, to ensure that the sector recovers with a minimal and controlled impact on consumers and utilities”. He asserted this is necessary in order to “address these challenges”.

(READ MORE: Gold price loses $80 following Russia’s COVID-19 vaccine approval)

What you should know

The third edition of the ERI report was launched during the Digital Energy Festival of the Africa Energy Forum, on 5 November 2020. The event brought together more than 70 stakeholders in the energy sector, regulators, international organizations, and development finance institutions like Africa50 and the World Bank.

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1 Comment

1 Comment

  1. Anonymous

    November 13, 2020 at 4:47 pm

    So should we start dancing? Maybe
    Should we be start crying? I don’t know

    Is the index for people wey pole pass their house? Please let them do it by the number of hours an average household had light. Then much will be left to be deserved.

    Once person get pole, utility bill follows.

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Energy

President Buhari calls for alignment of capacity, attraction of investments across power sector

President Buhari has called for the alignment of capacity and attraction of investments across components of the Power Sector’s value chain.

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President Muhammadu Buhari has called for the alignment of capacity and attraction of investments across the generation, transmission and distribution components of the Power Sector’s value chain.

This was disclosed by the Minister of Power, Engr Salam Mamman, who represented the President, in a speech read at the  launch of Eko Electricity DisCo’s Supervisory Control and Data Acquisition (SCADA) system in Lagos on Thursday.

He said, “We must ensure that there is an alignment of capacity and attraction of investments across the generation, transmission and distribution components of the Power Sector’s value chain.

“I acknowledge the Central Bank of Nigeria’s (CBN) financial support towards this project through the Nigeria Electricity Market Stabilization Facility granted in 2015. This facility significantly led to the successful completion of this project.

“My administration remains committed to addressing the liquidity challenges which are adversely affecting the Power sector’s viability. We have noted with grave concern: The increased fiscal burden on the Federal Government (FG) occasioned by the tariff shortfalls in the sector which are no longer sustainable.”

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Bottom line

It is obvious that the CBN’s Payment Assurance Facility (CBN PAF) targeted at supporting tariff shortfalls can no longer be extended and must be phased out to allow the sector’s financial independence.

The government is also aware that these tariff shortfalls sit on DisCos’ books and impair their ability to raise capital and invest.

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Energy

FG to begin online registration, monitoring of petrol stations, depots

The DPR has stated that it will commence the remote monitoring, registration, and accreditation of all petroleum products depots.

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FG to begin online registration, monitoring of petrol stations, depots

The Department of Petroleum Resources (DPR) has revealed that it plans to automate and begin remote monitoring, registration, and accreditation of petroleum products depots, retail outlets, and the entire downstream oil and gas industry, with the launch of the newly established Downstream Remote Monitoring Systems (DRMS).

While disclosing a statement in Abuja, the Head, Public Affairs of the DPR, Paul Osu, pointed out that the newly established Downstream Remote Monitoring Systems is expected to take off on December 1, 2020, after the launch in Abuja.

READ: Nigeria’s 5,000 BPD refinery will produce 271 million liters of petrol every year

According to a report by Vanguard, Osu explained that the DRMS is a web-based solution designed to provide intelligent regulatory and inventory management system for petroleum products supply and distribution from depot to retail outlets and also as a regulatory tool to monitor retail outlets and depot activities.

He said, “Other features of the application include retail outlets accreditation and re-registration, nationwide automated product inventory management, retail outlets coordinate recording for mapping purposes and transactions management and report generation of dealers nationwide.

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“The establishment of DRMS is another strategic initiative of DPR to continue to create opportunities and enable business in the oil and gas industry in Nigeria.”

It can be recalled that the DPR had a few months ago, launched the National Production Monitoring System (NPMS), another online platform to assist the oil and gas regulator accurately monitor national crude oil production and exports, through the provision of a system for direct and independent acquisition of production data from oil and gas facilities in Nigeria

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This is to ensure timely and accurate reporting of production figures and export data. This is also expected to guard against the crude oil theft that is prevalent in Nigeria’s upstream oil sector or reported cases of crude oil that is sold but unaccounted for.

The NPMS is an initiative that is developed as a replacement for the current paper-based report and ensures ready production reporting to the Federal Inland Revenue Service (FIRS) and the Nigeria Extractive Industries Transparency Initiative (NEITI) and other agencies.

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Energy

DPR approves new Liquefied Petroleum Gas guidelines for investors, operators

DPR has announced the introduction of new guidelines to accommodate more LPG investors and operators across the country.

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FG directs 9,000 filling stations to install gas facilities, FG discloses when Nigeria will start exporting petroleum products, DPR closes seven gas firms in Lagos, plans to close more

The Department of Petroleum Resources (DPR) has announced the introduction of new guidelines to accommodate more Liquefied Petroleum Gas (LPG) investors and operators across the country as part of its policy on gas.

This initiative by the oil and gas regulator is part of the measures aimed at enhancing the availability of LPG, also known as cooking gas in Nigeria, in addition to meeting the current administration’s target of 5 million metric tonnes of domestic, commercial and industrial LPG utilization in the next 10 years.

READ: Credit to Nigerian economy falls to N38.67 trillion

According to a report by ThisDay, the disclosure was made by the Zonal Operations Controller of DPR, Ayorinde Cardoso, while speaking with journalists during a public sensitization exercise on safe usage of LPG.

Cardoso stated that the federal government through the National Gas Expansion Programme was committed to making gas accessible and affordable for Nigerians.

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He said, “We have a lot of people coming into the sector to invest and DPR is on ground to ensure that they follow the regulatory requirements. We have brought out new guidelines to encourage investors and anybody that wants to operate in the sector to follow the guidelines.

“DPR is also collaborating with the Lagos state government and other stakeholders to improve safety in gas storage, sales and distribution.”

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READ: DPR releases guidelines for establishment and operations of downstream gas facilities

What you should know

Nairametrics had earlier reported that as part of its new policy on gas, DPR had moved against illegal operators of gas facilities with the shutdown of 85 LPG plants in Lagos in the last 10 months. It stated that the plants were shut down for not complying with international safety standards and operating without approval or license from the DPR.

The Federal Government had encouraged stakeholders and investors to invest in the LPG sector to accelerate the development of the domestic gas market.

READ: How to access CBN’s N250 billion intervention fund for gas sector

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It can be recalled that the FG through the Central Bank of Nigeria had set up a N250 billion intervention facility for the national gas expansion programme, with the specific target at making Compressed Natural Gas (CNG) the fuel of choice for transportation as against petrol and LPG for domestic cooking, captive power, and small industrial complexes.

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