PwC Roundtable Illuminates Path Forward for Nigeria’s Power Sector: The Electricity Act 2023 Sparks Opportunities Amidst Challenges

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Industry leaders and experts gathered at the 14th PwC Annual Power & Utilities Roundtable to dissect the transformative potential of the Electricity Act 2023, a cornerstone legislation reshaping Nigeria’s power landscape. The Act, consolidating laws governing the nation’s electricity supply industry, grants states unprecedented authority over generation, distribution, and transmission within their jurisdictions, heralding both promise and complexity.

Unlocking the opportunities

The Electricity Act 2023 emerges as a beacon of hope, promising to catalyze Nigeria’s economic resurgence. According to PwC’s ‘Nigeria Economic Outlook 2024,’ the Act’s implementation could slash annual economic losses by a staggering $28 billion, unleashing newfound potential for growth and development.

Central to this transformation is the establishment of state-owned utilities, christened ‘Successor Companies,’ empowered to mobilize long-term investment through innovative financial mechanisms. These entities, acting as dedicated distribution and supply companies, serve as specialized investment vehicles, enticing capital from both state coffers and private investors through primary and secondary markets.

Moreover, the Act facilitates collaborative fundraising endeavors through the Power Consumer Assistance Fund (PCAF), a pioneering initiative bridging federal and state spheres to provide targeted subsidies. This collaborative approach not only fosters financial sustainability but also ensures equitable access to electricity, underpinning Nigeria’s quest for inclusive development.

Navigating challenges

However, amidst the promise lies a labyrinth of challenges demanding deft navigation. Foremost among these is the substantial financial burden accompanying the Act’s adoption. The establishment of state-level regulatory bodies, coupled with the engagement of legal and commercial expertise, imposes significant costs, vying for limited state resources. Thus, meticulous due diligence and comprehensive feasibility studies emerge as imperative safeguards, ensuring efficient resource allocation and project viability.

Moreover, the specter of regulatory disarray looms large, threatening to undermine the Act’s efficacy. Divergent electricity laws across states pose a grave risk, engendering market distortions and fostering unfair competition. To avert this peril, stakeholders emphasize the urgent need for regulatory uniformity, advocating for consistent oversight mechanisms across the federation to forestall regulatory capture and safeguard the sector’s integrity.

As Nigeria stands at the crossroads of transformation, the Electricity Act 2023 emerges as a linchpin in its journey towards energy security and economic prosperity. Yet, realizing its full potential demands unwavering commitment, collaborative spirit, and astute governance, as the nation embarks on a quest to harness the power of electricity for the collective good.


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