Nigeria moves to forestall skill challenge in power sector

In a move aimed at meeting the expected huge skills need in the Nigeria’s privatised power sector, the federal government is on course to launch a scheme that will afford interested Nigerians in every state an opportunity to be trained with the requisite skills.

The National Power Sector Apprenticeship Scheme (NAPSA) which will be launched in August, according to Chinedu Nebo, minister of power, will be jointly sponsored by the federal and state governments to provide free training for Nigerians.

“We want to make sure that the industry has artisans, technicians, engineers across the value chain,” said Nebo last Friday at the ground-breaking ceremony of 90 megawatts (MW) power plant in Magboro, Ogun State. “If we don’t do this, what we experienced in the oil and gas sector will happen in the power sector.”

The initiative is geared towards training artisans, lines men, joiners, fitters and machinists that would enable them acquire skills needed in the new power sector.

The proposed programme has twin benefits of providing fulfilling career opportunities to the youths, and filling the technical gap that could be created by failure to learn from the mistake in oil and gas sector which experienced serious gap in local content before the advent of the Nigerian Oil and Gas Industry Content Development Act in 2010.

The proposed scheme will use the platform of National Power Training Institute of Nigeria (NAPTIN) for the training.

Expected growth driven by recent privatization

Up until November 1, 2013, the power sector had operated for several decades as a state monopoly, with the federal government having the exclusive rights to own electricity generation, transmission and distribution facilities, en era characterised by inefficiencies, low investments and graft.

The birth of the privatised power sector, which is expected to be better and more effectively managed, has brought in its wake new opportunities and potential markets across the entire value chain, even as it opened the way for near-moribund markets to come alive.

In November, the Federal Government completed the transfer of publicly owned electricity generation and distribution companies, which were part of the defunct Power Holding Company of Nigeria (PHCN) to private investors.

Nigeria, Africa’s largest economy, with a population of over 170 million, is estimated to need about 40,000 MW of electricity over the next decade, but currently has less than 5,000 MW of available capacity.

With several power generation plants expected to come on stream sooner or later, and the restructuring of gas supply to the plants, thousands of skilled workforce would be needed to operate the sector.

The NAPSA scheme will address gaps in terms of skills required to work in the sector.

Local content drive in the sector

The Nigerian Electricity Regulatory Commission (NERC) had recently proposed a regulation on national content development for the power sector, as parts of efforts to fast track the growth of the sector.

The local content policy is aimed at establishing a framework for the development of the power sector in a way that there would be increased localisation of technology, services and employment opportunities for Nigerians.

The draft regulation seeks to retain at least 95 per cent of available jobs in the power sector for Nigerians in order to increase local participation in the emerging new industry, among others.
The draft regulation also proposes the establishment of a Joint Qualification System (JQS) to ascertain extant in-country capacity in the sector and a robust evaluation of operators’ application of the regulation.

“All companies shall give first consideration for suitably qualified Nigerians for employment and training. For each of its operations, an operator or project promoter may retain a maximum of five per cent management positions as may be approved by the commission as expatriate positions,” the draft regulation said.

“Where there is need for employment of an expatriate, a company shall apply to the commission for approval to do so. All operators and companies operating in the NESI shall employ only Nigerians in their junior and intermediate cadre or any other corresponding grades designated by the operator or company.”

According to the proposed law, where Nigerians are not employed because of their lack of training, the operator shall ensure to the satisfaction of the commission, that every reasonable effort has been made to supply such training and such effort and the procedure for execution shall be contained in the operators employment and training plan.

The draft regulation stipulated that the JQS shall be maintained and operated in consultation with industry stakeholders and shall be administered in accordance with provisions set out in the regulations.

The regulation when passed is expected to promote a framework that will ensure that local competencies are built to internationally acceptable standards through the active participation of Nigerians and the deployment of Nigerian natural resources and raw materials in electricity industry activities, according to NERC.

NERC said the gradual entry of increased private participation in the generation and distribution sectors of Nigerian electricity supply industry as well as the expected commencement of the Transitional Electricity Market (TEM) necessitated it to put in place various enablers to support the orderly development of the sector.

Transitional Electricity Market to come online September

The declaration of the TEM is expected to kick-start a fully contracted and rules-governed electricity market wherein the sanctity of contracts shall be full to protect market liquidity and incentivise increased investment.

The TEM, which was originally scheduled to be declared on March 1, 2014, was put on hold to ensure that all the conditions precedent before it comes on stream are satisfied. It is expected to be declared in September.

The Electric Power Sector Reform Act (EPSRA) 2005 established three market stages that define gradual competitiveness in the power privatisation market, which include TEM, mid-term electricity market and final/mature electricity market.