Unpacking Nigeria’s Electricity Act 2023

Nigeria is taking significant steps towards addressing energy poverty with the implementation of the Electricity Act 2023. The Act, which allows states to participate in energy generation, transmission, distribution, and regulation has the potential to revolutionize the power sector in the country. Analysts at PriceWaterhouseCoopers emphasize the importance of state government participation and collaborations to harness the full benefits of the Act. The key theme surrounding the Electricity Act 2023 is the empowerment of states to take charge of their power infrastructure and work in collaboration with distribution companies and regulators to improve access to electricity. This collaborative approach is expected to bring about positive outcomes and create new opportunities for investment in the power sector. Key Highlights of the Electricity Act 2023: 1. Collaborative Framework: The Act consolidates various existing laws in the power sector into a single document, fostering collaboration between states, distribution companies, and regulators. It allows states to participate in all aspects of the power value chain, including energy generation, transmission, distribution, and regulation. 2. Opportunity for Funding: With states being closer to the people, they have access to valuable information that can benefit distribution companies. Collaborations between states and distribution companies can attract much-needed capital for funding priority projects and initiatives in the power sector. 3. State Implementation: Several states, including Lagos, Enugu, and others, have started adopting the Act. However, a careful and thorough approach to implementation is essential to address challenges such as collection, tariff pricing, debt levels, and infrastructure deficits at the state level. Bimbola Banjo, Partner and Finance Advisory Leader at PriceWaterhouseCoopers West Africa, highlighted the importance of proper planning and understanding the complexities of the electricity business. She emphasized the need for states to engage with utilities, assess infrastructure needs, and identify customer challenges before embarking on power projects. One of the critical aspects that the Electricity Act 2023 aims to address is the issue of collection efficiency, tariff pricing, and overall consumer satisfaction. States have the opportunity to develop tailored solutions to combat power theft, improve bill collections, and ensure fair tariff structures for consumers. The Act also introduces the Power Consumer Trust Fund (PCAF) to facilitate subsidies and additional funding from both federal and state governments. In conclusion, the implementation of the Electricity Act 2023 presents a unique opportunity for Nigeria to enhance its power sector and combat energy poverty. By empowering states to take an active role in energy generation and distribution, the country can pave the way for sustainable development and improved access to electricity for its citizens.