…As NERC Presents Highlights of Regulation
…Fashola Canvasses 100% Compliance
By Shola Akingboye – January 28, 2019
Local Content in Power sector has received another boost as stakeholders in the industry gathered in Abuja to polish-up its implementation at a two days workshop, organized by the Nigerian Electricity Regulatory Commission (NERC) in Abuja.
Sequel to the 2014 enactment of the regulation on National Content Development for the Power Sector, the Nigerian Electricity Regulatory Commission (NERC) has called on stakeholders in the Nigerian Electricity Supply Industry (NESI), to embrace local content in production of materials, equipment and services to boost the economy.
At the Abuja stakeholders’ workshop which focused on – Minimum Specification on Nigerian Content and Requirement for Labour in the Nigerian Power Sector and exhibition of local products and services for the Nigerian Electricity Supply Industry (NESI), the Commission, urged manufacturers to join in the implementation of the regulation of National content development for the power sector, 2014.
According to NERC, the regulatory agency explained that the law titled: ‘Regulation on National Content Development for the Power Sector,’ was enacted in 2014, but its implementation began in January 2019 while maintained its resolve to ensure strict implementation on its directives.
In his speech, the Chairman of NERC, Prof. James Momoh declared that the implementation of the law would be immediate, adding that operators in the sector are expected to abide by it or risk regulatory sanctions. Momoh noted that the expectations of the commission were contained in the schedule of the local content law.
He urged manufacturers in the industry to ensure quality standard in their products and services. The Commission also noted that local manufacturers of Billing Meter should be given first consideration by the nation’s electricity distribution companies.
Momoh laments that the global markets in the industry was already dominated by manufacturers from developed countries, said the need for local manufacturers to make their products affordable with high quality standard to attract the market is crucial. He explained that going forward, electricity distribution companies (Discos); generation companies (Gencos) and the Transmission Company of Nigeria (TCN) would have to abide by the minimum local content standards in the regulation.
The NERC boss therefore advised major stakeholders and players in the industry to work together as a team in order to record appreciable success.
According to the schedule as obtained by RegentAfrica Times, areas specifically treated in the National Content for the Power Sector regulations are:
- Project Execution
- Acquisition of Technology
- Professional Services
- Nigerian Content Consultative Forum
- Reporting Compliance and Enforcement
However, the categories expatiates the roles expected of various segment of the Nigeria Electricity Supply Industry (NESI) i.e the GENCO, DISCO and the TCN among others.
With specific percentage of local workforce expected of Gencos to be engaged in its operations; areas such as the building of power generation turbines, transformers plinths, cable trenches and control rooms among others are highlighted in the new order. It also noted that larger percentage of equipments such as switchgears and sub-station equipment used by the TCN could be sourced locally and most civil works for transmission projects would have to be wholly done locally starting from 2019.
As for the Discos, NERC explained that 40 per cent of meters the Discos install at users’ points would also be sourced locally while they will source for all of their meters locally by 2024. It noted that other major items such as Transformers would be source by 25 per cent from 2019, and 75 per cent by 2024.
Other schedules explained in the regulations are health, safety and environment jobs in the power sector. The schedule further indicates these would be reserved for Nigerians beginning from 2019, among others laws in the new National Content Regulation for the power sector.
Moreover, not a few stakeholders present at the workshop lend their submissions to how best the regulation on National Content for the Power Sector could be delivered:
Represented at the two days event, the Minister of Power, Mr. Babatunde Fashola declared the federal government position, says it will ensure total compliance to the local content in the power sector. He noted that this will hasten the development of the industry. The minister admonished that diligent compliance of these provisions, would create jobs, develop Nigeria’s scientific and engineering capabilities, and stimulate innovation, social and economic development.
According to him, “the president has directed Ministries, Departments and Agencies (MDAs) to engage indigenous professionals in the planning, design and execution of national security.” Though laments the unfortunate scenario where NESI was heavily dependent on imported of both the human, material, and equipments as of now.
Represented by the Director of Procurement in the Ministry, Mr. Ahmed Abu, the Minister stressed the need to systematically develop Nigerian capacity and content in the industry for long term growth and stability.
“Diligent compliance with the provisions in the Order will not only create jobs but also develop Nigeria’s scientific and engineering capabilities, stimulate innovation, social and economic development.” He said.
He further explained that compliance with the Executive Order 5 will boost development in the Nigerian Electricity Supply Industry (NESI).
It is recall that the Executive Order 5 as signed in February 2018 by the President Muhammadu Buhari, was channel towards increasing local content in public procurement with science, engineering and technology components.
The Order is expected to promote the application of science, technology and innovation towards achieving the nation’s development goals across all sectors of the economy.
The local content regulation for the power sector exclusively, envisages that Nigerian companies are given first considerations for the supply of goods, works and services in the power sector. This regulation flows from the Federal Government policy on Local Content first enunciated in the National Electric Power Policy (NEPP) of 2001, which mandates the regulator to ensure local content in the electricity market in Nigeria.
At the NERC workshop, not a few experts concurred that the industry is consequently vulnerable to foreign exchange availability and rates, to the extent that contracts for gas and generation are dominated in foreign currency.
This law, when implemented, is expected to create opportunities for Nigerians to participate and benefit from the privatisation of the power sector as part of government’s policy to create jobs through infrastructure projects.
Meanwhile, the highly commended team that delivered the regulation comprise of eleven members panel drawn from the Standards Organization of Nigeria (SON), Nigerian Labour Congress (NLC), civil society, insurance industry, the Institute of Chartered Accountant of Nigeria (ICAN), fabrication industries, Nigerian Society of Engineers (NSE), Manufacturers Association of Nigeria (MAN), and the Nigerian Bar Association (NBA).