FG gives power sector contractors transaction guidelines


The Federal Government has given guidelines to contractors seeking to do business with the government on power sector related projects.

Babatunde Fashola, the Minister of Power, Works and Housing, who provided the insights on Tuesday in Abuja, spoke when a delegation of the Nigerian Investment Promotion Commission (NIPC) led by Hajiya Ladi Katagum, Acting Executive Secretary, paid him a courtesy visit.

He reiterated the fact that government role in power development was currently largely regulatory, adding that in terms of power the ministry was in daily receipt of all sorts of tested and untested power ideas.

He advised power contractors to be focused on doing business through the proper channel, adding that the federal government only regulates the standard of safety of meters and the installation process to ensure safety.

He further warned that people who were interested in building transmission lines should undertake contract with government companies like the Transmission Company of Nigeria (TCN).

Fashola said that the ministry would always intervene to solve related problems.

“People who want to supply meters should contact the DISCOS; government is not buying meters anymore but government is driving policies to ensure that consumers get meters.

“As for those who want to generate electricity, we have a policy to produce electricity by as many means as it is possible; namely by gas, cool, water and solar and in some places where wind energy is viable.

“For you to produce power you must first have a license issued by Nigerian Electricity Regulatory Commission (NERC), so power contractors should go to NERC not the ministry.

“If they got a license they need a document called ‘power purchase agreement’ which is for now being signed off by Nigeria Bulk Electricity Trader (NBET), a government company; the ministry oversees what they do. The government protects consumers, you can’t just throw any tariff at them,” he added.

Fashola said that power purchase agreement could enable one to do power project and if the tariff is high the ministry would not approve it because of its obligation to consumers to give power on a competitive and fair price basis.

“Businessmen and investors must also be thorough; they must comply with requirements, follow our processes and respect our laws. Your plan must synchronise with TCN,” said the minister.

On what the investment promotion outlook could benefit from, he listed inspection of contracts as the first, adding that there must not be basis for any capricious cancelation of obligations.

“Undoubtedly, infrastructure support will be helpful to investment which is what the government is focussed on trying to bridge the infrastructure deficit to improve competitiveness of our business environment.

“A clear fiscal policy that enables capital injection and capital repatriation will be helpful and all of these are being dealt with the government simultaneously.”

He assured investors that government was showing its capacity to protect and secure them with their assets.

“We are mindful of the interest that has been shown in the sectors for which the ministry has responsibility, especially power and also real estate and housing development.

“But we also see that some of the decisions of the past were driven by businessmen rather than the policy of government and we think that it is the policy of government that should enable that business to take a position.”

For example, he said, in housing, the ministry desired to put in place a sustainable plan that evolve designing houses that people could own not only in terms of its monetary value but because it appeals to them.

“Some of the developers send us all sorts of proposals but the ministry want to evolve its own designs; we are finalising on the cost, design and the quantity of materials that needed to be built.

“We adapted our designs to fit the climatic and weather conditions in different parts of the country and also to respond to some of their cultural needs while trying to manage the cost components of those.

“This is what we will present ultimately when we concluded it and it will help to inform the investors not for them to impose what they want and their own building materials largely imported on us.”

However, Fashola called for a local conference where the contractors would be gathered and enlightened on the processes of power investment.
He said that the government would, however, continue to regulate and drive policies that would ensure investment and consumers protection and safety.

Earlier, Katagum had said that the commission came to get all the information required and to seek collaboration with the power sector.

She said this was necessary to simplify the duties for NIPC “when it goes on investment mission, the sector and other sectors can go along to disseminate information to boost project implementation.

“We have companies that may be signing contracts or MoU on different power issues in the sector, maybe renewable energy, sometimes before the project takes off it takes a while.

“We also want to know how the process of contract can be shortened through contacting relevant development agencies to fast track project implementation.”

She stated that the commission was responsible for promoting investment and creating enabling environment for investment in the country, noting that good partnership with the ministry would enhance NIPC’s mandate.

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