Sam Amadi, the former chairman of the Nigerian Electricity Regulatory Commission (NERC) has identified Nigeria’s lack the creditworthiness as a reason the country has failed to effectively maximize her abundant natural gas resources.
According to Amadi, despite the fact that Nigeria is a gas country with enough molecules for her power plants, the lack of commerciality and creditworthiness continue to stifle this effort.
Speaking during an interview with TVC News recently, Amadi said the gas-to-power market is not very solvent, as Nigeria is not paying as she ought to pay, adding that taking gas to where the generation companies are is a problem, so, those governance and commercial issues are there.
Amadi speaking further highlighted the fact that some progress has been made when it comes to power sector reforms, noting that the power tariffs are not so bad that the market should not work with them.
“Nigeria’s power sector challenges are systemic and the distribution owners may not have the capacity to invest long-term in the sector. Many inefficiencies should be tackled in the short term, which can improve the power supply. Amadi said
According to the former NERC chairman, there is need to get the distribution companies (DisCos) to remit their market contribution up to 70 to 80 percent, and get the gas suppliers to be paid up to 80 percent of their invoice.
“We can incentivize the whole value chain. If we have the capacity for 6000 megawatts (MW), then we should be able to supply 5000 MW to homes and businesses every day and that will be a significant improvement in the country’s power supply.”
Commenting on the way forward, Amadi said that after attention is given to tackling short-term challenges, a framework can be laid out for the medium to long term. The first thing to do according to him is to get non-partisan persons to review the national electric power policy. He said it was done in the year 2000 and the market has moved significantly.
To him, “The assumptions about economics and the public sector have since changed all over the world, so, it is not safe to make a fundamental error of assuming that the private sector is the answer to power sector challenges, without having an efficient public sector”.
He urged the incoming administration in 2023 to come up with a new power sector roadmap that will improve operations of DisCos and ensure the independence of system operators that will run on a commercial basis and market participants can have a stake in ensuring that the system works very well on a nondiscriminatory basis.