27 Power Firms Risk Losing Licences

Electric power plant


The Nigerian Electricity Regulatory Commission is to revoke the licenses of power generations companies which fail to meet their milestones

By Anayo Ezugwu  |  Aug 10, 2015 @ 01:00 GMT  |

THE Nigerian Electricity Regulatory Commission, NERC, will soon revoke the licenses of 27 power generation companies, GENCOs. Usman Abba Arabi, head of public affairs, NERC, said the commission arrived at the decision at the end of an audit exercise which revealed that the firms could not meet the terms and conditions for their licences. The licences of the affected firms were approved by the past governments.

The commission is to immediately start the process of cancellation of these licences in line with clause 17 of the Electric Power Sector Reform Act of 2005 which listed five conditions for cancellation of licences. About 63 generation and distribution companies rated as category one are in operations and have no issue with the commission.

“Forty other firms in categories one to four will, however, have to justify their continued ownership of their licences or get it withdrawn within the next 30 days to 12 months. In category two are those licensees that have ceased operations. These are CET Power Projects being promoted by West African Portland Cement Company, Ewekoro, Ogun State and Contour Global Solutions of Nigeria Bottling Company of Apapa, Lagos State,” he said.

Also, 13 other power generation firms in category three are not in operations but have substantially satisfied their milestones. These are Ethiope Energy; Supertek Nigeria; Mabon Energy; Bresson AS; Hudson Power; Knox J & L; Tower Power, Abeokuta; Zuma Energy Nigeria transferred to Itobe Coal 1, 2, 3 and 4 firms.

Others in this category are MBH Power; Delta Electric Power; Wedotebary Nigeria; Century Power Generation and Supertek Electric. Those in this category will be required to satisfy their outstanding milestones and start construction within the next 12 months, failure of which the commission will commence the process for withdrawal of their licences in line with clause 18 of the NERC Application for Licences (Generation, Transmission, System Operations, Distribution and Trading) Regulations, 2009.

In the fourth category are five power generation firms that are not in operations and have not substantially satisfied their milestones. They have 30 days to convince the commission against withdrawal of their licences. In this category are ICS Power; Anita Energy; Ibafo Power Station; Minaj Holdings and Gateway Electricity.

According to him, 20 electricity generation firms in category five are not in operation and have not been submitting quarterly reports to the commission. He noted that the generation firms would be required to provide justification for their licences in the next 30 days or get it revoked. Licensees listed in categories two are hereby notified of the intention of the commission to commence the process for the cancellation of their licences on the grounds that the licensees have ceased operations.

Those in categories four and five were notified of the intention of the commission to commence the process for the withdrawal of their licences on the grounds that these companies have failed to commission their licensed generating power station within three years from the date of their licences. Licensees in categories two would only be notified of the commission’s intention to cancel their licences, while those in categories four and five have 30 days moratorium to convince the commission against the withdrawal of their licences. Firms in category three have 12 months moratorium to start construction, he said.