Feasibility of the Power Sector Recovery Plan – II

By Akachukwu Okafor 10/02/2018


A few weeks before this year’s annual Nigerian Economic Summit, I was in conversation with an energy reporter from one of Nigeria’s leading dailies. In that dialogue, I mentioned that I did not see a situation in which further reforms in the power sector especially the Power Sector Recovery Plan (PSRP), would yield any results without the government reviewing the privatization of the electricity sector especially the distribution companies (DISCOs). I argued that part of the reason the DISCOs are not making required investments into network and systems upgrade is because they are not sure of how long they will be permitted by the regulators to be indisciplined before they are called to order. I told him that what most of the DISCOs are doing is cashing out, pending when there is certainty about which direction the sector is going. He argued that the government will not attempt any review of the privatization exercise as this will further place Nigeria’s electricity market on the negative for investment. We concluded the conversation after acknowledging that it may put Nigeria on the negative, but that government doesn’t have an alternative. Although I emphasized that while I foresee a review soon, what I do not know is how it will be handled by government, the nature that it will take, and what the outcome will be.

Soon afterwards, during the Nigerian Economic Summit, Nigeria’s Minister of State for Budget and National Planning, Zainab Ahmed, told the summit that government was considering a review of the power sector privatization, starting with the DISCOs. This, according to her, was necessary to attract the required investment into the sector, particularly the World Bank Group’s $2.5billion which can only be offered upon Nigeria’s fulfilment of 18 agreed conditions stated in the PSRP. In early April, I provided a preliminary analysis on the PSRP based on the Minister of Power’s briefing to newsmen during the launch of the plan, and promised more analysis when the entire PSRP document is available to me, which you will read in this article

Of the 18 conditions stipulated in the PSRP, there are conditions that will be difficult to meet due to the difficult and challenging environment where these problems are situated – the numerous stakeholder groups to engage with, the lack of a clear strategy for solving these problems, the political will to pursue any strategies and most importantly the lack of effective and strong institutions to implement plans/strategies that will meet these conditions. They include: review and implementing a cost-reflective tariff (per MYTO review schedule), development of a plan for the prevention of gas pipeline vandalism and its implementation, and also, identification of sources of funding for the PSRP. The last attempt by the industry regulator to review the tariff upwards to reflect cost of electricity production to distribution to consumers, was resisted by consumer groups through legal action.

Unfortunately, there seems to be no way that further investment that will make significant difference in the electricity sector can be made without a tariff increase. I remember one of the former heads of the regulatory commission telling me during a private chat that for Nigeria’s electricity sector to recover, electricity tariff needs to be set at a minimum of N62KW/h and that it will take at least 10 years should all stakeholders in the sector start doing the right thing once tariff was set at N62KW/h. He further pointed out that it is only at this tariff that the industry can achieve a levelized cost that will increase electricity generation especially from renewable energy sources and attract needed investment in the industry. This assertion is reflected in the PSRP which shows that there has being a steady decline of both naira and dollar denominated investment in the electricity sector since 2013 to 2017, with uncertainties for year 2019. The level of confidence in the Nigeria Electricity Supply Industry (NESI) has left the industry with only two dependable investors – the Central Bank of Nigeria (CBN) for Naira investment and the World Bank Group for dollar investments.

For gas pipeline vandalism, government is light years behind developing and implementing a sound plan that will effectively solve the problem due to the long historical background of violent agitation that has been part of exploiting resources in the region, it’s underdevelopment, continued pollution and political economy of resources there.  Unfortunately, 85% of Nigeria’s current total generation output is powered by gas. This is part of the reason government is vigorously pursuing the development of more hydropower. So, it is difficult to imagine where the funds for implementing the PSRP will come from.

Other strategies laid out in the plan leave more questions than answers. They include: where and how the funds that will be used to fund future (2017 – 2021) sector deficit will come from, who is guarantying and insuring the funds? Will there be political will to match the need to ensure that DISCOs’ performance and implementation of credible business continuity plans are realized? This is a serious concern because of the political interferences on the work of the regulator which has long been a hindrance in compelling DISCOs to adhere to industry best governance practices. There must be a sustainable way to run Nigeria’s electricity market. Currently, it is run on very unsustainable shortfalls, the market shortfall for 2015 and 2016 is estimated at N473 billion, while the tariff shortfall is N458 billion. At this level of shortfalls, the subsidy that needs to be injected into the market to keep it running and simultaneously making investments for service improvements is simply not there, especially in a market that tariff increases will not be immediately supported by consumer groups. For subsidies in Nigeria most times, it is difficult to measure their effectiveness, and justify the subsidy mechanism. While subsidies can be a mechanism to correct market failures, however over the years we have come to experience it as an additional effective mechanism of providing more cash to a market that is usually not accountable and transparent for the sole benefit of market players that have access to the seat of power. This presents a trilemma for implementation of the PSRP.

Government has long realized this reality as it has quickly invoked the provisions of (Section 27) of the Electric Power Sector Reform Act 2005 to increase the ease at which four categories of electricity consumers can have access to electricity. With this development, these consumers (that consume more than 2MWhr/h) can buy electricity directly from electricity generating companies (GENCOs), hereby bypassing the usually inefficient and ineffective DISCOs from the line of business. This makes it possible for previously stranded generated capacities that cannot be wheeled out to reach consumers and for the market to be more demand driven in allocation of electricity to DISCOs. For instance, we achieve a situation where about 36MW which a certain DISCO failed to pick up for distribution to consumers from a power sub-station would not be sent to it in the first place. Other commendable measures have been the launch of the Mini-grids Regulation, the inaugurating of the board of several electricity entities including the board and management of the Rural Electrification Fund (REA) which will soon be launching its platform for accessing electrification fund for accelerated rural electrification. While all these measures are commendable, however, holistic policy, institutional and operational mechanism interventions need to take place more alongside implementation of these measures if Nigeria can dream to reduce the annual loss of over USD$29.3 billion to the national economy and approximately USD$470 billion loss in GDP in 17 years according to a World Bank’s Africa Infrastructure Country Diagnostic (ACID) and a 2015 McKinsey report.

In all, the PSRP is not adequate for the recovery of Nigeria’s power sector, this brings me to the governance culture in Nigeria’s public, quasi-public institutions and compliance to standing rules and adherence to industry best practices devoid of political interference. Without reforms in the public and civil service to improve efficiency of service delivery and effectiveness, reduce corruption and mismanagement, it is expected that the PSRP will lead to no recovery of the power sector.


Okafor Akachukwu is a 2017 Mandela Washington Fellow (Public Management, University of Maine) and a Science Policy Research Unit (SPRU), University of Sussex trained Energy Policy, Innovation and Sustainability Expert. Email: akachukwu_okafor@yahoo.com


Reflections from Maine: Energy, Environment, Climate Change and Rights – 1

By Okafor Akachukwu 11/10/2017


Maine is not popular with many people from Nigeria and Africa who visit for education, business or tourism or among many Nigerians living in the United States. It is officially the whitest state in the United States. Even amongst Americans it is not very popular, yet the most Northeastern state in the United State is well known for its lobster, lumber, pulp and paper industry, maritime history, rocky coastlines, beautiful spruce islands of Acadia National Park the northeastern most United States state known for its lobster, lumber, pulp and paper industry, maritime history, rocky coastlines, spruce islands of Acadia National Park. It has the 4th longest coastline in the US, 2nd after Florida on the East Coast and longer than the coastline of California.

As much as these are interesting features that may attract you to visit Maine someday, my six weeks of public management training at the University of Maine as a Mandela Washington Fellow which offered me extensive and diverse engagement across the state left me with much to reflect upon. Within the contexts of energy, environment, climate change governance and the politics of rights, sovereignty and movements, I found deep similarities with the struggles we face here in Nigeria and others that we may soon start facing.

Maine is 97% forested, being the largest forested area in the US with a once thriving lumber, pulp and paper industry. Its economy grew, citizens prospered as the jobs rolled in, while its rivers, environment and biodiversity suffered tremendously pollution and extinction from the growth and prosperity. The Penobscot River (the longest river in Maine) was used for log driving, a practice that meant that people couldn’t use the river for transportation, fishing and other forms of sustenance and recreation. Soon dams were built to control the flow of the river for better log driving and as hydroelectricity become the choice for electricity production, more sections of the river were dammed to power the paper mills. These dams became obstructions that endangered 11 species of migratory fish particularly the Atlantic Salmon to the Penobscot River. The livelihood of the Penobscot Indian Nation was threatened. The chemical waste from the paper mills caused even more problems, the remaining fishes in the river died, those that survived and adapted had chemical concentrations that were unsafe for human consumption. The rivers of Maine fast became stenches.

By the 1960s, Androscoggin River had become one of the most polluted rivers in the United States from the toxic chemicals discharged from paper mills and other industries on its bank. However, with the Clean Water Act legislation, clean ups started. The Clean Water Act protected rivers in the United States from further pollution but didn’t reverse the impact on the biodiversity particularly the fishes. The dams along the Penobscot River provided cheap electricity for Maine while the extinction of migratory fishes remained a huge concern., Fortunately the purchase of all the dams by a power company in 1999 provided an opening through an innovative river restoration project called the Penobscot River Restoration Project to rebalance fisheries population, plus hydropower production in Maine’s largest watershed.

The Penobscot River Restoration Project was designed to explore the development of a comprehensive solution to many issues regarding hydropower relicensing, migratory fish passage and ecological restoration on the Penobscot River. Two dams –  Great works Dam and Veazie Dam were removed, Howland dam was decommissioned and a fish bypass channel constructed. Power production was increased at six other sites, and fish passages improved at four dams. June 2016 marked the completion of this most innovative and unprecedented restoration project in the history of the United States which was achieved through painstaking commitment and exceptional collaborative effort among diverse stakeholders including the Penobscot Indian Nation, 7 conservation groups, 2 hydropower companies and several state and federal agencies. The tours of these dams and interactions with some of the actors that made the restoration possible caused me to think of what can be possible in Nigeria, the opportunities we are missing in finding solutions to environmental problems we face as and the growing concerns that we may be causing irreversible damage to our environment, biodiversity and ecosystem.

In Nigeria, the challenge is usually how to strike a balance amongst diverse competing interests and still achieve desired results. The Niger Delta has witnessed one of the most devastating environmental oil pollution in human history in the pursuit of energy resources that many argue has become a curse for Nigeria, while stakeholders are yet to devise a solution causing more harm to our environment, biodiversity and ecosystem. Just, like the Penobscot Indian Nation people, the people in the Niger Delta cannot benefit from its waters and land until it can effectively mobilize her people under one strong voice to demand restoration of its waters and land. Unfortunately, the riches of her land have continuously been used without the actualization of a restoration project. Yet government and policy makers are relying on her vast gas resources to significantly increase Nigeria’s deficient electricity generation capacity. On another note, government’s interest to increase Nigeria’s electricity output through coal power has started to create water and environmental pollution in the states where coal is being mined. What has proven difficult over the years or impossible is for government and the private business sector to prioritize the environment above tax revenues and profits. By their nature and structure, they cannot have the interest to protect the environment more than the people and communities that own these rivers and lands that are exploited and polluted, for whom these are their homes and sources of living. On another hand, these communities, civil societies and environmental groups are yet to learn how to build effective movements and collaborations to take on the huge challenges including fighting against these profitable and corrupt structures.

The devastation that dams have caused to the environment is well researched and known, however government is unwaveringly interested in financing large hydro projects – it has commissioned some of which are more than 10 years in construction and still plans on building more for both agricultural and hydroelectric purposes. It is uncertain how these dams will adversely affect the environment and biodiversity and impact on climate change. The rights and livelihoods of the local communities and other ecological concerns where these dams are sited are not given considerate priority. With chemical pollution of water bodies, land, and destruction of ecosystems from coal mining and dams one wonders how these communities will survive, especially in the coming years with severe climate change and the impacts of drought, and dwindling water resources. The expected result will be a destabilization which will converge with climate change impacts in addition to other human induced and naturally occurring events that will defy immediate and lasting remedies.

With the Niger Delta, the worst is yet to happen as the region is still polluted, with no infrastructure in place and no significant efforts to fix these problems even as the world is signaling an end to the use of fossil fuels in the next few decades to help fight climate change. So where will the resources to fix, remedy and restore the ecosystem in Niger Delta and communities where coal is currently being mined come from? Where will the will power and commitment come from? Will there ever be a moral burden or committed resolve to solve the problem? How can we lead strong and effective collaborative efforts to follow through innovative restoration projects such as the Penobscot River Restoration Project? These are questions we must urgently find answers to.


Okafor Akachukwu is a 2017 Mandela Washington Fellow (Public Management, University of Maine) and a Science Policy Research Unit (SPRU), University of Sussex trained Energy Policy, Innovation and Sustainability Expert. Email: akachukwu_okafor@yahoo.com

The lost climate change leadership

By Akachukwu Okafor 18/09/2017


The general perception within the climate change circles is that the United States is fast losing the leadership position it once held in charting the climate change future. The fact is that there hasn’t been any country that has consistently in recent times taken audacious steps of leading efforts to fight climate change. The United States was looked up to, it and assumed that hypothetical leadership role through the efforts of President Obama.

Unfortunately, that has since slipped. The future and leadership role on climate change politics, technologies, finance and so on now rests on China, no thanks to the “Chinese hoax”. A reasonable thing for the Trump government to do would have been to play along to see where the Chinese trick leads and its possible end, at least to ensure that China doesn’t get away with all the coming benefits. But this is not even the start of events.

What many Trump critics fail to remember is that attempts to scuttle climate action didn’t start with President Trump. In 2001, President Bush announced that it will not sign and implement the Kyoto Protocol, citing reasons which included lack of incomplete scientific knowledge of the causes and solutions of climate change, the harm it will cause the United States economy and the lack of technologies to commercially pursue a low carbon energy system. The difference with what is happening now and what happened during Bush’s Administration was that Angela Merkel under the G8 got Bush to sign the group’s climate pledge.

In the case of President Trump, Merkel and the group were more interested in ensuring that the rest of the group remain focused on implementing their pledges than urging Trump not to withdraw the US from the Paris Agreement since the US decided to abandon the leadership position others hoped she will assume. Whatever the case, the world must move on with action with or without the US. The question that should be answered is why the seeming lack of commitment to the fight against climate change? Does it have to do more with Trump’s political party’s ideological standpoint on management and utilization of natural resources?

Maybe there are more deep and widespread undertones that subtly inform the United States’ position, actions and reactions on climate change. This is a thought also shared by a retired American college professor, scientist and environmentalist that I visited recently. He also often wonders why Americans especially the rich that can afford to act against climate change are reluctant to do so.

Trump’s position seems to reflect the near indifference most Americans have towards global warming – climate change as revealed in a recent research by Yale Program on Climate Change Communication. The 2017 report indicates that there is a 1% decline in the number of Americans that believe global warming is happening today when compared with 71% recorded in 2008 and few Americans are optimistic that humans will reduce global warming. Only 7% say humans can and will successfully reduce global warming, with 24% of Americans saying humans won’t because people are unwilling to change their behavior. With the huge level of awareness about global warming, the report also reveals that 67% of Americans rarely or never discuss global warming with family and friends while 33% often or occasionally discuss global warming with family and friends. Additionally, only 43% of Americans hear about global warming in the media at least once a month, and 19% of Americans hear people they know talk about global warming at least once a month. With 42% of Americans saying their family and friends make at least a moderate amount of effort to reduce global warming. It may affirm the uncertainty that humans (especially Americans) will do what is necessary to reduce global warming and people’s unwillingness to change their behavior. Why this is the case is a puzzle irrespective of efforts to raise awareness. However, there is no doubt about the role of big fossil fuel businesses in ensuring that people around the world not just America take no steps against climate change.

What hasn’t helped in recent times is that the dominant narrative of economic benefits and less of environmental and climate friendly benefits of climate actions pushed by governments and businesses that are currently implementing climate action projects. A quick glance at some of the published news articles on environmentally cleaner and climate friendly projects and initiatives around the world talk about these projects from the long-term cost saving, socioeconomic benefits perspective and how these projects put forward the government, country, city or corporation as environmentally conscious and as a climate friendly brand for positive image/brand interests than how the project contributes to the global fight against climate change. With such skewed narrative, it is much easier for climate change deniers to compare continued fossil based energy systems and infrastructure from mainly an economics and social benefits standpoint than environmental and climate change benefits standpoint as a recent US government Department of Energy report on electricity markets and reliability did. I am not saying that decisions shouldn’t be made without the aim of achieving an economically and socially sound solution in mind but all must strive towards a holistic balance of all benefits – towards achieving sustainability, possibly putting the need for a sound environment and climate first.

Interestingly, upon Trump’s announcement of US withdrawal from the Paris Agreement, many would have expected that millions of Americans will take to the streets in peaceful protest, but this didn’t happen. Some environmentalists and political leaders believed that the best response would be to ignore Trump and design a strategy of implementing the Paris Agreement without United States government’s political and financial leadership and commitment. Soon, some US politicians specifically Jerry Brown, Governor of California and Michael Bloomberg, former New York Mayor had moved in to provide a platform and leadership for private and public entities (over 9 states, 227 cities and counties, 1,650 investors and businesses) within the United States and to pledge commitment to the Paris Agreement – and they are making huge significant commitments.

This initiative is highly commendable and still puts the United States on the path of meeting its Paris commitment as claimed by promoters of the initiative, however it is uncertain how this group will gain the political, and legal legitimacy with and within future climate change negotiation tables and institutions such as the United Nations Framework Convention on Climate Change (UNFCCC). Will the UNFCCC design a unique mechanism to support and engage entities and groups that are making critical and proven efforts to combat climate change? What happens to United States government official financial contributions to climate action both in the United States and around the world? Who will bridge the funding gap that is being created? Research institutions in the United States and elsewhere that have been significantly funded by the US government are already concerned that financing will cease to come in and are now looking outwards to help. Unfortunately, US government staff has been banned from the use of the phrase ‘climate change’ by most US government departments and as it is, no researcher can get any US government funding to undertake a research that focuses on climate change.

Many may choose to argue that government’s funding of research programs has little or no benefits to the birth of rewarding innovations and technologies that contribute to significant economic benefits, however extensive research as revealed in ‘The Entrepreneurial State’ proves otherwise. Many countries understand this and are making huge investments in sustainable energy future but China seems to understand this more than any other nation as it desperately makes necessary investments to ensure that it becomes the leader and rallying force in the nearest future. For instance, its carbon trading scheme is set to be the biggest carbon trading scheme ever which will meet its 2030 peak emissions target. Whichever way the pendulum swings on who becomes the leader of climate decision processes, finance and technologies of the energy future the United States may have taken the passenger seat, unless it takes unprecedented steps to reverse wrong steps it has taken. Most importantly, what also needs to happen is that environmentalists and organizations that work on climate change must mobilize themselves to get Americans to know more about climate change, talk more about it and start taking critical action and pressure Washington irrespective of the party in power to do the right thing.


This piece was first published by Initiative for Policy Research and Analysis (InPRA).

Okafor Akachukwu is a 2017 Mandela Washington Fellow (Public Management, University of Maine) and a Science Policy Research Unit (SPRU), University of Sussex trained Energy Policy, Innovation and Sustainability Expert. Email: akachukwu_okafor@yahoo.com

Avoiding the energy deficit catastrophe; need for a policy overhaul

By Akachukwu Okafor 13/06/2017


On many occasions, I have faced the need to comprehensively define energy policy or climate policy for people whose interests are aroused by the news stories/articles on energy, climate change, environment etc that come up daily. In a bid to offer a simple definition (but my professors will usually pause before saying, “this is complex and complicated”) to my listener energy and climate policy is a policy that helps to sustainably meet global energy needs while keeping global temperature below 2°C – exactly at 1.5°C – as global populations continue to increase.

In reality doing what this definition says is the biggest challenge that the world faces today. This comprises of solving energy access, energy efficiency, energy resource utilisation and environmental sustainability issues, making the necessary socio-technical transitions that the introduction and use of appropriate climate mitigation and climate adaptation measures will throw up. More importantly it is about having the political leadership to make the right policies, committed to obligations that help ensure that these policies translate to effective actions on the ground. These policies define and determine how the exponentially growing energy demands of the world growing population are met. In 2015, the United Nations published the World Population Prospects, which revealed that the world population will reach 8.5 billion in 2030 and 9.7 billion in 2050. Half of the global population is expected to be concentrated in nine countries namely India, Nigeria, Pakistan, Congo DR, Ethiopia, Tanzania, United States of America, Indonesia and Uganda. Seven of these countries except Pakistan are developing countries among the top ten countries in the world, and have the highest electricity access deficit according to the World Bank Regulatory Indicators for Sustainable Energy (RISE) report 2016.

The RISE report which is a global scorecard that compares the existence of strong policy and regulatory framework for sustainable energy across the world placed India, Pakistan, Uganda, Tanzania, Ethiopia, Congo DR and Nigeria ranked 75, 55, 53, 48, 30, 27 and 13 respectively on the position table. These countries except Nigeria scored higher than 33 on the overall score which means that significant opportunities exist from which to strengthen the policy framework for countries that score between 34-66 and it shows the existence of strong policy to support sustainable energy with countries that scored between 67-100. Twenty seven indicators and 80 sub indicators were used for the study across three energy categories: energy access, energy efficiency and renewable energy. For energy access, the indicators were the existence and monitoring of an officially approved electrification plan, scope of officially approved electrification plan, framework for grid electrification, framework for minigrids, framework for stand-alone systems, utility transparency and monitoring, utility creditworthiness, establishing a new household grid connection, permitting a new minigrids for energy access. For energy efficiency, the indicators were existence of national energy efficiency planning and energy efficiency entities, incentives from electricity rate structures, information provided to electricity consumers, and energy labelling systems. Other indicators included building energy codes, carbon pricing and monitoring, minimum energy performance standards, mandates & incentives: large consumers, mandates & incentives: public sector, mandates & incentives: utilities and financing mechanisms for energy efficiency. For the renewable energy category, the indicators were legal framework for renewable energy, planning for renewable energy expansion, incentives & regulatory support for renewable energy attributes of financial and regulatory incentives, network connection and access, counterparty risk, carbon pricing and monitoring.

The best ways to answer some of these questions lie within the solutions and suggestions that were made in “universal energy access, a new research agenda”, published by Initiative for Policy Research and Analysis According to the publication (2016), there is a need for a shift in how energy projects and research outcomes are perceived in development circles. Projects should be viewed as a process of learning and improving process and product innovation that will benefit other projects than viewing projects just in terms of numbers i.e. target beneficiaries reached. In essence project and research objectives need to be broadened and analyzed using a multi-criteria approach. Most importantly new project and research approaches must be inclusive and open to the participation of non-experts and energy users. Also, new energy access projects and research efforts for poor rural and urban populations must seek to be more people/user centred, and open to the agency and participation of community groups, networks and local knowledge experts in the grassroots technologies, social behaviour, psychology, culture and traditions that are important enablers of technology adoption and diffusion. To ensure that achieving the universal sustainable energy is not just a wish, care must be taken by the global community to ensure that these countries – India, Nigeria, Ethiopia, Tanzania, Congo DR, Uganda start today to do the right thing to ensure that no one is not left behind on energy access targets by 2030 and beyond.


This piece was first published by Initiative for Policy Research and Analysis (InPRA)

Okafor Akachukwu the Editor, Energy and Environment, Initiative for Policy Research and Analysis (InPRA),  a 2017 Mandela Washington Fellow (Public Management, University of Maine) and a Science Policy Research Unit (SPRU), University of Sussex trained Energy Policy, Innovation and Sustainability Expert. Email: akachukwu_okafor@yahoo.com


Lessons for Nigeria from Kenya’s Solar Ecosystem

By Okafor Akachukwu 30/05/2017

Kenya Solar

Kenya’s renewable energy market and ecosystem particularly for solar energy (off grid solar PV and solar home systems) is unarguably the most successful in sub-Saharan Africa and the world. It has one of the largest per capita markets in the world – its level of product development, penetration and growth, consumer base, use of innovative solutions especially smart metering and mobile payment systems, and efficient customer service has remained a subject of learning in the sector, particularly for other African countries.

In a previous article, I highlighted Nigeria’s poor energy policy environment compared to the other 110 countries that were studied for the Regulatory Indicators for Sustainable Energy (RISE) report. What I did not highlight is that Kenya is the only sub-Saharan African country that scored tops for all three categories – energy access, energy efficiency and renewable energy. The other countries in the developing world that scored highly in the three categories were India and Sri Lanka. Compared to Nigeria’s overall score of 22, 11 and 29 for energy access, energy efficiency and renewable energy respectively, Kenya’s scores are 82, 48 and 63 respectively. Easily observed is the fact that Kenya’s phenomenal solar market development is reflective of a good and enabling sustainable energy policy environment. What this means is that the huge success of Kenya’s solar market is a result of deliberate government and development sector policy interventions that align and connect with other market interventions and activities.

This corroborates the findings of a research team at Sussex Energy Group (Science Policy Research Unit at the University of Sussex, United Kingdom) which provided a clearer understanding of what has contributed to Kenya’s success. They argue that hardware financing – financial investments in the demand and supply sides of solar technologies – and private sector entrepreneurship focusing on investing venture capital in entrepreneurs to drive and grow the market at the micro economic level, are not the only contributors to the Kenyan success as many have long believed. Rather the success was as a result of policy interventions that understood the need for a systemic approach in nurturing innovation and technological change through policy. This systemic approach leads to interventions in a wide range of areas that is generally regarded as creating an enabling environment.

The question is how can policy interventions help create the enabling environment that is required for the kind of success that Kenya has achieved? The authors argue that the overall goal of policy must be to build functioning socio-technical innovation systems that add to other efforts for the transfer, development and diffusion of sustainable energy technologies that meet the needs of all groups of consumers. Goals of policies and interventions must intentionally (1) build networks of diverse stakeholders; (2) foster and share learning; (3) promote the development of shared visions; and (4) support diverse experimentation. Two examples of how these can be achieved are the creation of sustainable energy access relevant innovation-system builders (SEA-RIBS) and using projects and programmes to build socio-technical innovation systems. The system builders are the institutions, including national and international companies, agencies, donors, networks, groups and financial institutions, that work to provide and improve relevant energy access support which may be needed in the implementation of relevant energy access projects and programmes.

In Nigeria, the mandate to lead energy access interventions – projects and programmes especially for rural areas – falls on the Rural Electrification Agency (REA) which is leading government’s effort to electrify rural communities in Nigeria. Unfortunately, in the recent past, REA has failed to provide the leadership that is required of it. Its projects and programmes funded through the Rural Electrification Fund (REF) have failed to build networks of diverse stakeholders, foster and share learning, promote the development of shared visions and support diverse experimentation. Projects have been treated more like a transactional activity than an experimentation and development activity to support learning that will help build systems. Recently, some stakeholders in the renewable energy sector especially project developers, have expressed their displeasure over the contract awarding process in the agency. For instance, the bill of quantities for some of the projects advertised by the agency does not meet industry standards and therefore cannot be executed, even if the projects can work with little or no challenges. The fear is that if solar projects are implemented based on a bill of quantities that are not standardized, not only will the projects fail to deliver on expectations, they will most likely breakdown within a short timeframe, which will start a bad story for solar technology. Project developers in Nigeria are already doing their best to change the bad image given to solar technology over the years due to badly implemented government solar projects. To invest 2 billion Naira of the Rural Electrification Fund on projects which are likely to breakdown in a short time impedes and reverses the efforts of the renewable energy sector to use solar energy to improve energy access in Nigeria. The agency must look at itself as the leading sustainable energy access innovation-system builder who must consciously look at its mandate as not just electrifying rural communities but also building a socio-technical innovation systems. This should be done by applying a broad systemic approach to the way it interacts with other stakeholders, designs and implements policies and interventions.

It is interesting to note that recently, the Federal Government inaugurated a new board for the Rural Electrification Agency whose Executive Director (Rural Electrification) is Dr Sanusi Ohiare, who holds a PhD in Rural Electrification. As my friend and colleague, I have reminded Dr Ohiare of the enormous responsibility that he has on his shoulders to ensure with the rest of the board that the right things are done at the agency to help build a sector that is resourceful in effectively meeting its mandate. One that is efficient in assisting to create an enabling environment for energy access and building a renewable energy sector and market that is successful. It is my earnest hope that the new board understands that its projects, programmes, policies, interventions and activities can make or mar the actualization of universal sustainable energy goals in Nigeria and beyond.


Okafor Akachukwu is the Energy and Environment Editor, The Initiative for Policy Research and Analysis (InPRA) and a Science Policy Research Unit (SPRU), University of Sussex trained Energy Policy, Innovation and Sustainability Expert. Email: akachukwu_okafor@yahoo.com

Promoting a sustainable energy policy environment in Nigeria

By Akachukwu Okafor 28/04/17


Sometimes I wish that Nigeria’s power sector challenges are solved so that I will have less to write on, but this seems not to be happening as issues keep arising in this large and troubled electricity market with its various actors and stakeholders.

After my last publication on the feasibility of the power sector recovery plan, I received several messages from key sector players including from a diplomatic mission commending the article’s insightfulness and asking that I share a copy of the recovery plan if I had it. At the time the last article was published, I did not have the plan and my preliminary analysis was based on the media briefing by the Minister of Power after the approval of the plan. However, I have obtained the plan now and I hope to further analyse the plan based on the specific programmes it hopes to embark on. The feedback I found most interesting was from a former Chairman on the Technical Committee of National Integrated Power Project (NIPP) who was not happy that I did not emphasise how DISCOS, in truth, collect a lot of revenue, but turn around to claim to other market players that they collect little and are operating at a loss. He described DISCOS as the problem of Nigeria’s electricity sector for not remitting revenue and refusing to invest in upgrading their infrastructure.

I promised to be more critical of all players in the sector especially DISCOS as I have always been (and as allowed by word count – it will take not less than a 5,000 word article to analyze how DISCOS are a big problem for Nigeria’s electricity sector). I still do not understand how the government strongly believes that DISCOS operate two accounting books and yet, have not taken appropriate and necessary actions to ensure that they are more transparent and accountable. This lack of transparency and accountability helps in the low revenue base of the power sector which starves it of the finance it critically needs for reforms and recovery programmes. Interestingly, these and other issues including enforcing corporate governance from power sector operators, enforcing market discipline, developing a coherent strategy to resolve militancy and making a definite policy statement on tariff are among sector issues that the World Bank listed as conditions for the release of $1 billion needed to help fund power sector programmes.

Speaking of definite policy statements, according to a World Bank global scorecard for policy makers which compares the national policies and regulatory frameworks for sustainable energy amongst different countries, Regulatory Indicators for Sustainable Energy (RISE), February 2017, Nigeria ranked amongst the worst countries with regard to enabling policy environment for energy access, energy efficiency and renewable energy. Of 111 developing and developed countries studied which represents 96 percent of the world’s population and energy consumption, Nigeria scored very low for the three categories. For energy access, Nigeria ranked 10th worst country ahead of Liberia, Yemen, Mauritania, South Sudan, Sierra Leone, Chad, Haiti, Central African Republic and Somalia in that order. Countries that performed better than Nigeria include – Afghanistan, Congo Republic, Madagascar, Ethiopia, Eritrea, Niger, Togo, Sudan, Honduras, Mozambique. For energy efficiency, Nigeria was ranked 8th worst ahead of Somalia, Mozambique, Chad, Loa People Democratic Republic, Mali, Mauritania, Congo Republic while Niger, Central African Republic, Liberia, Vanuatu, Solomon Islands, Yemen, Burundi, Myanmar, Maldives, Haiti, Zimbabwe, South Sudan were among 12 countries that performed better than Nigeria. On the renewable energy category, Nigeria was ranked 21st ahead of Somalia, Haiti, Sierra Leone, Eritrea, South Sudan, Niger, Mauritania, Bahrain, Liberia, Congo Rep while Uzbekistan, Mozambique, Benin, Burkina Faso, Saudi Arabia, Kuwait, Cambodia, Congo Democratic Republic, Qatar were listed countries that performed better than Nigeria.

Although Nigeria’s renewable energy score improved by over ten places when compared to energy access and energy efficiency it was still 4 points below the indicator score mark for low performing countries. Nigeria’s performance on this scorecard will not come as a surprise to people with a good understanding of the energy sector in Nigeria. Space will not allow me analyse the report in detail. For instance, on the energy access category, Nigeria’s overall score for energy access was 22 and 0, 0, 17, 35, 22, 100, 0, and 0 for existence of plan, scope of plan, grid electrification, minigrids, stand-alone systems, affordability, utility transparency and monitoring, and utility credit worthiness indicators respectively. The most interesting aspect of these indicators is that consumer affordability of electricity scored 100 which is an indication that electricity consumers can afford to pay the cost of electricity.

This situation seems to be well understood by government and key electricity market players which may be what the Nigerian government is exploiting in its continued push for a cost reflective tariff for the market. However, consumer affordability of electricity is clearly different from willingness to pay for electricity which is one of the challenges that the grid sector is facing. The problem of willingness to pay borders on social issues of distrust with public utilities and citizens’ perception of government’s role in providing utilities which is mostly informed by politicians’ election campaign promises. The scores of the other indicators means that government has a lot to do in making the right policies and setting the right regulatory frameworks for an enabling environment that accelerates sustainable energy access.

On energy efficiency, Nigeria’s overall score was 11 out of 100, and this equally doesn’t come as a surprise especially when policy makers are not knowledgeable about their responsibilities to the sector. For instance, the Senate Committee Chairman on Power, Senator Enyinnaya Abaribe while responding to a question on how energy efficiency in Nigeria can be increased said that it is the job of energy efficiency appliance vendors to educate Nigerians on energy efficiency as it is not the job of government to lead energy efficiency programs, or in extension make enabling policies.

Unfortunately, the Nigerian Electricity Regulatory Commission (NERC) which should be helping policy makers better understand the sector which they are to make policies for and also supervise are not doing enough. A check on the capacity building programmes designed for legislators will reveal that most of the capacity building programmes are not specifically designed for policy makers in Nigeria’s difficult regulatory environment. Most capability building programmes are via sponsorship to international conferences that will add little or no knowledge for making the right country-specific power sector policies. The legislative committees, relevant government ministries and departments and agencies on power also lack experts who should help in crafting the right policies asides other capacity, institutional and bureaucratic challenges that trouble the sector.

Renewable energy is performing better than other categories; however, there are a few practices by some project implementing stakeholders especially government energy agencies and projects that are not only unhealthy for the immediate growth of the sector, but which will in the medium term, help destroy the progress being made by other stakeholders. These practices include poor design of projects, wrong costing of projects and lack of transparency in procurement and contract processes which lead the implementation of projects that fail within a short time. This gives a bad name to renewable energy technologies and products. To help promote sustainable energy in Nigeria, government must do what is necessary, not just in formulating enabling policies and regulations for growth but to ensure that these policies are implemented and enforced appropriately in line with best practices. While government and other stakeholders are working towards creating a more enabling sustainable energy policy environment, consumers must realize that they hold the power to wheel the ship of policy in the direction they desire, which can only happen when consumers effectively engage with the policy and regulatory making processes.


Okafor Akachukwu is the Energy and Environment Editor, The Initiative for Policy Research and Analysis (InPRA) and a Science Policy Research Unit (SPRU), University of Sussex trained Energy Policy, Innovation and Sustainability Expert. Email: akachukwu_okafor@yahoo.com


The feasibility of the power sector recovery plan

By Akachukwu Okafor 06/04/2017


From a preliminary analysis of the recently developed power sector recovery plan approved by the Federal Government, it is not a feasible recovery plan in the medium and long term. The measures are designed as interventions to stabilize the collapsing power sector rather than help it recover. The plan will not effectively solve the liquidity problems in the sector and the cost reflective tariff only a measure that might further throw the sector into challenges if other measures are not planned for and implemented synchronously.

The power sector recovery plan comprises a wide range of pet policy actions, operational and financial interventions which intends to help improve transparency, service delivery, performance of DISCOS, transmission companies and the entire value chain. In specific terms the plan provides for simplifying and reducing the cash deficits in the sector; how to make the DISCOS viable, accountable, responsive to customers and to ensure stability of the grid and expansion of the grid and transparency and communication within the sector, in addition to how to improve sector governance and the quality of personnel on the board of the DISCOS. Other provisions of the plan include addressing access to renewable energy using mini-grids and stand-alone solutions and implementing solutions that have been developed for 37 federal universities and seven tertiary hospitals as well as stopping the vandalization of gas pipelines which will help stimulate appetite for investment in Nigeria’s power sector. These measures sound brilliant in theory, how they will be effectively operationalized remains to be seen or made public.

Direct financial interventions to solve institutional and organizational incompetence – gap in skill, knowledge, capacity and capabilities and problematic perspective of the system is not an effective way of solving market failure challenges. For instance, the liquidity problem being experienced in the sector is mainly due to DISCOS unwillingness to make the necessary investments to reduce their aggregate technical, commercial and collection (ATC&C) and entire system losses. I was recently informed by a power sub-station duty engineer that he has over 50MW of power sitting on his substation, but the DISCO in the area only accepted to collect 14MW. The result is that the remaining 36MW will waste and because it was generated, and must be paid for somehow. He further said that DISCOS preferred to accept a small fraction of what is allocated to them and leave the rest with Transmission Company of Nigeria (TCN), while they charge the customer the ‘fixed charge’ of being connected on the grid with or without electricity. This practice is said to be more profitable to DISCOS as they don’t need to share their earning with anyone. Liquidity challenges in the sector cannot be solved when key system players are involved in rent seeking practices. It is difficult to see how government plans to simplify and reduce the cash deficits in the sector by approving a Power Assurance Guarantee of N701 billion Naira for Nigeria Bulk Electricity Trading (NBET) to pay GenCos for gas supplies from this year to December 2018 when there is no plan that equally guarantees that the funds will be collected within the market by DISCOS. How subsequent power guarantees to GenCos beyond 2018 will be secured not yet known.

Making DISCOS viable, accountable, responsive to customers is more of what government wishes that DISCOS do but not what they can be in the near term. It is public knowledge in the sector that DISCOS are grossly incompetent in managing their asset, delivering quality service and have consistently refused to do so. Part of their poor attitude has been traced to how the privatization was handled. The Minister of Power in May 2016 during the presentation of a roadmap for solving the power crisis argued that cancellation of contracts and reversing privatization initiatives sends wrong signals to investors and past reversals failed in solving the problems that caused their cancellations and reversal. However, the Minister has failed to point out that these reversals failed because the process of initial engagement, reversals and renegotiations to correct previous problems are flawed by illegitimacies, lack of transparency and ridden with outcomes that satisfied the selfish interests of powerful and influential actors in the sector. I believe that investors would be happy to see reversals and reprivatisations that are transparent and are in accordance with provisions of the law and international best practices.

There are indications that there are other financial interventions asides the N701 billion Naira planned (or budgeted) for the sector which might be in the form of subsidies and introducing a cost reflective tariff that will help reduce the cash deficits. These were positions advocated by the then acting chairman of Nigeria Electricity Regulatory Commission (NERC), Mr Anthony Akah in January this year, and hinted on by the Minister of Power while briefing newsmen after the approval of the power recovery plan. The Senate Committee Chairman on Power, Senator Enyinnaya Abaribe, while answering at a public dialogue before the approval of the recovery plan, advised government to carefully determine if it is power or petrol that it must subsidize and warned that government should not give money to DISCOS. Subsidies have never worked in Nigeria; it has always been a scam. It doesn’t exist. Even when it exists it doesn’t benefit most of the population. It benefits only the rich and vested interests. Subsidies for the power sector will only elongate and complicate Nigeria’s power sector difficulties. Government should rather embark on a sector wide campaign to enlighten electricity consumers on the positive effects of not subsiding power or petroleum products on the economy and provide a plan to help stabilize and manage the short term economic difficulties that will arise. Subsidising power is not part of the solution, rather DISCOS should invest in upgrading its distribution network to reduce ATC&C losses and improve its collection measures to capture more consumers who currently do not pay for electricity consumed. There are suggestions that the business model that the DISCOS currently operate is a model that collects revenues from willing-to-pay-consumers, while unwilling-to-pay-consumers are not targeted to pay for power consumed. The proposed cost reflective tariff which is really an increase in tariff should be put on hold while government and DISCOS develop and implement a plan that ensures that all consumers that use electricity pay fairly for what they consumed. The inefficiencies in the systems especially on the part of DISCOS should not be passed on to consumers who are not protected by the system. This I believe will help solve the cash deficit problems in the sector. Government should not subsidize electricity and should also not increase tariff, unless an increase in tariff is a deliberate measure by government to push people off the grid for renewable energy alternatives – which is a brilliant measure. Unfortunately, this is not what the government plans to achieve. Perhaps a more careful study and understanding of how the market i.e. consumers will respond to the introduction of a cost reflective tariff is what government should be interested in at this moment, so that it doesn’t create more problems for the grid sector. That said, it must be made clear that an increase in tariff may increase energy efficiency (EE) measures, especially by commercial consumers that are more likely to access finance to implement energy efficiency mechanisms. Also, pursuing an energy efficiency plan is a more conscious consumer and policy driven plan which only informed consumers will be willing to take, even though there may be difficulty in change of lifestyle and business process.

Energy efficiency is an energy demand reduction mechanism that is missing in the power recovery plan, at least from the briefing that the Minister of Power gave. This has the capacity to increase the number of consumers that are served by the same quantity of energy that previously didn’t serve a lesser number. An Energy efficiency plan being included as part of the power sector recovery plan is an opportunity to link the recovery plan to Nigeria’s energy efficiency contribution in her Intended Nationally Determined Contribution to the Paris Agreement which is a 30% energy efficiency improvement by 2030, which is a measure that will help attract investments. The structure of the current mini-grids regulation is part of measures that will not effectively assure a quick power sector recovery. These and more I would be analysing in the future.


Okafor Akachukwu is the Energy and Environment Editor, The Initiative for Policy Research and Analysis (InPRA) and a Science Policy Research Unit (SPRU), University of Sussex trained Energy Policy, Innovation and Sustainability Expert. Email: akachukwu_okafor@yahoo.com