Proton Energy CEO on COVID-19 & its impact on Nigeria’s power sector reforms

In light of the COVID-19 pandemic, electricity regulators in Nigeria have decided to postpone the planned tariff hike for another three months. This move comes amidst discussions to cap electricity tariff shortfalls at 380 billion Naira this year and transition to full cost-reflective tariffs by 2021. Oti Ikomi, the CEO and Executive Vice-Chairman of Proton Energy, recently appeared on CNBC Africa to discuss the implications of these decisions on the power sector and the reconstituted board of the Nigerian Bulk Electricity Trading Company (NBET). Ikomi commended the renewal of the NBET board, chaired by the Minister of Finance, and highlighted the urgency for the sector to drive forward towards cost-reflective tariffs. One of the key points raised during the interview was the government's commitment to ensuring cost-reflective tariffs by 2021, aiming to improve efficiency and service quality in the electricity market. Despite the challenges posed by the current economic situation, Ikomi emphasized the need to restructure the economy and attract foreign direct investment to the power sector. While acknowledging the difficulty that cost adjustments may bring to citizens, he also noted the potential benefits of increased power quality and availability as a result of the tariff reforms. The interview shed light on the government's plans to implement service-reflective tariffs and the importance of aligning various stakeholders to achieve a more efficient and sustainable power sector in Nigeria. As the country navigates through these uncertain times, stakeholders in the power sector are bracing themselves for significant changes aimed at improving the reliability and affordability of electricity supply. The road to cost-reflective tariffs may be challenging, but it presents an opportunity for Nigeria to enhance its power infrastructure and attract much-needed investment in the sector.