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Names of Six Companies that Get Licenses to Distribute Power

Published by Tope Fakinlede on June 30th, 2024.

Names of Six Companies that Get Licenses to Distribute Power

By Okechukwu Nnodim

The Federal Government has awarded six licenses to various firms for independent electricity distribution in Nigeria, according to data from the Nigerian Electricity Regulatory Commission (NERC).

An analysis of NERC’s recent licensing and permits section revealed that these Independent Electricity Distribution Network (IEDN) licenses were issued to the six companies in 2023. These networks are intended to operate independently from the main transmission system and cater to specific areas or communities, aiming to enhance electricity access and reliability in Nigeria.

The commission detailed its licensing activities, noting that in the first quarter of 2023, it issued two new IEDN licenses and amended an existing one. While no new distribution network licenses were issued in the second quarter, two new trading licenses were granted. In the third quarter, out of 36 licenses, permits, and certifications issued, one was for a new IEDN and another for a license renewal. The fourth quarter saw the issuance of three new IEDN licenses, along with trading licenses and certifications for Meter Service Providers and Meter Asset Providers.

Overall, six new independent licenses for electricity distribution were issued in 2023. These licenses are distinct from the 11 privatized power distribution companies that resulted from the unbundling of the Power Holding Company of Nigeria in November 2013.

Despite NERC’s efforts to improve electricity access and reliability through these independent networks, the initiative has faced criticism. State governors recently argued that the IEDN and distribution franchisee models developed by NERC have been ineffective. They suggested that State Electricity Regulatory Commissions (SERCs) should create new models to open the retail electricity market to competition and address power supply issues more effectively.

This sentiment was expressed in their document, “Development of the National Integrated Electricity Policy and Strategic Implementation Plan Policy Recommendations by State Governments,” submitted to the Federal Ministry of Power. The governors, under the Nigeria Governors’ Forum, emphasized that under the Electricity Act 2023, state governments now have the authority to operate and regulate their own electricity markets independently of NERC.

The governors described the IEDN and distribution franchisee models as outdated, calling for new retail and supply licenses and business models to improve the power situation in their states.