- The initiative aims to transform 6 million customers in the power sector into paying clients by adopting digital technology and smart meters.
- A key initiative she disclosed involves a plan to significantly enhance transmission capacity without the complete $10 billion initially estimated as necessary.
The Federal Government has committed to bridging the metering gaps and solving the financial liquidity challenges in Nigeria’s power sector.
This pledge came from the Special Adviser on Energy to President Bola Tinubu, Olu Verheijen, during her participation at the 2024 edition of CERAWeek by S&P Global in Houston, United States.
The event, under the theme “Energising 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.
Verheijen shed light on the government’s strategy for decentralising 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.
She highlighted the enormous investment requirements identified by the International Energy Agency, which pegs the gap at $190 billion annually. Furthermore, she disclosed that the government focuses on surmounting these fiscal challenges through targeted, creative solutions.
A key initiative she pointed out 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 emphasised the thoughtful and strategic approach to these interventions.
The SA 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.
She said, “So, if you look at this required scale of investments, you know, some entities like IEA have estimated about $190 billion a year, we don’t have the fiscal space for that. So, what are we trying to do to make sure we are able to scale faster? We are making sure that we actually creatively target certain aspects that we think are catalytic to the rest of the entire value chain.
“So, we launched a presidential initiative recently. What are we using that to do? We say we need about $10 billion to double our transmission capacity. We don’t have that, but maybe we have a fraction of that, and we can make sure we procure metres, convert all of the 6 million customers we currently have into paying customers with digital technology and smart metres and make sure we grow revenue that way.
“If we grow that revenue, then we can make sure that we improve the financial viability of these public utilities and attract capital. So, that’s an example of how we’re being extremely strategic about the level of interventions that we have within our limited fiscal space.
“Once that is done and we have closed the metering gap, you have to address the financial liquidity issues, which tend to be. When you’ve derisked that entire value chain, we can have more capital on that grid, expand access, and grow consumption.”