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FG plans to derisk Nigeria’s power sector for more investments – Olu Verheijen

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Ms OLu Verheijen

The Federal Government has made a firm commitment to bridging the metering gaps and solving the financial liquidity challenges in Nigeria’s power sector.

This pledge came from Olu Verheijen, Special Adviser on Energy to President Bola Tinubu, during her participation at the 2024 edition of CERAWeek by S&P Global in Houston, United States.

The event, under the theme “Energizing Tomorrow: Charting a successful path for Africa’s energy transition,” saw Paul McConnell, Research and Analysis Executive Director at S&P Global, as the moderator.

The discussion panel featured prominent figures like Dr Amani Abou-Zeid, Commissioner for Infrastructure, Energy, and Digitisation at the African Union, and Gracelin Baskaran, Research Director and Senior Fellow at the Energy Security and Climate Change Program, Centre for Strategic and International Studies.

Verheijen shed light on the government’s strategy for decentralizing transmission and leveraging different technologies to boost electricity supply, particularly for high-demand customers. She candidly addressed the government’s fiscal limitations, outlining several innovative measures to derisk the power sector and stimulate investment.

Highlighting the enormous investment requirements identified by the International Energy Agency, which pegs the gap at $190 billion annually, Verheijen revealed that the government focuses on surmounting these fiscal challenges through targeted, creative solutions.

A key initiative she disclosed involves a plan to significantly enhance transmission capacity without the complete $10 billion initially estimated as necessary.

By adopting digital technology and smart meters, the initiative aims to transform 6 million customers into paying clients, thereby increasing revenue, enhancing the financial health of public utilities, and attracting further investment.

Given the restricted fiscal environment, Verheijen emphasized the thoughtful and strategic approach to these interventions.

She explained that closing the metering gap and resolving financial liquidity issues makes it possible to mitigate risks throughout the value chain, attract more capital to the grid, extend access, and foster greater electricity consumption, signifying a transformative phase for Nigeria’s power sector.

Specifically, she said:

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