NAVIGATING THE NIGERIAN ELECTRICITY ACT 2023: VIABLE MEASURES FOR MITIGATING STAKEHOLDER(S) RISKS

NAVIGATING THE NIGERIAN ELECTRICITY ACT, 2023: VIABLE MEASURES FOR MITIGATING STAKEHOLDER(S) RISKS 

In June 2023, Nigeria’s President Bola Tinubu signed the Electricity Bill (now the Electricity Act, 2023 and hereafter referred to as the ‘Electricity Act’ or ‘the Act’) into law, thus repealing the Electric Power Sector Reform Act (EPSRA) 2005. The emergence of the Electricity Act was the climax of a series of policy and regulatory reforms in the Nigerian electricity sector in the last two years. A few months prior, former President Muhammadu Buhari gave assent to a Bill to alter certain provisions of the 1999 Constitution of the Federal Republic of Nigeria (the ‘CFRN’), to allow constituent states within the Nigerian federation (the ‘States’) to generate, transmit, and distribute electricity in areas covered by the national grid and for related matters (the ‘CFRN Amendment’). 

The Electricity Act and the CFRN Amendment jointly make significant changes to the regulatory landscape for the power sector in Nigeria; by allowing States to make and enforce laws with respect to the generation, transmission, and distribution of electricity in all areas within such States. Whilst the CFRN Amendment broadly provided for the powers of state governments to regulate the electricity industry within their domains, the Electricity Act provides the detailed mechanism (to a large extent) for the operation of an industry with a dual regulatory structure at the federal and state levels. 

This Expert Publication authored by Ivie Ehanmo in collaboration with Electricity Lawyer, examines the key impact of the provisions of the Electricity Act on businesses and prospective investors in the sector. It is a timely advisory tool for all stakeholders in the Nigerian Electricity Supply Industry (NESI) and international stakeholders; in navigating the operation of a dual electricity market framework and the attendant risks stemming from the Electricity Act and related State electricity laws, as it impacts on individual and business operations in the sector. It also serves as a useful guide in the design of electricity markets at the federal and state level(s).