How To Secure a Power Transmission License in Nigeria

How to secure a Power Transmission License in Nigeria

The Nigerian Power sector in addition to the previous business licenses mentioned also has a Power Transmission Licence which is basically a license to engage in electricity transmission services between Power Generating Companies (GENCOs) and Distribution Companies (DISCOs) in Nigeria.

This article will be looking at Power Transmission Licences in Nigeria, with a deeper focus on :-

– Examples of Transmission companies currently operating in Nigeria.

– The Regulatory Framework governing Power Transmission Licences in Nigeria.

– The mode of commencing license applications for Power Transmission Licences in Nigeria.

– The requirements for procuring a Power Transmission Licence in Nigeria.

Are there any Power Transmission companies in Nigeria currently?

Yes there are – the Transmission Company of Nigeria (a Federal Government-owned company) , which is the sole Power Transmission company in Nigeria, meaning that securing and operating a transmission licence will require at the very least liaising with this company as there’s currently no clear Regulatory or Legal provision for off-grid Power Transmission Licences in Nigeria.

What is the Regulatory Framework governing Power Transmission companies in Nigeria?

Power Transmission companies are governed by the Nigerian Electricity Regulatory Commission (NERC) through its various regulations including the 2010 NERC Licensing Regulations and by virtue of the Nigerian Electric Power Sector Reform Act (EPSRA) , the Federal Ministry of Power, and are to liaise in some cases with the Transmission Company of Nigeria (TCN).

How are applications for Power Transmission Licences to be commenced?

Applications are to be commenced by the applicant’s legal representatives in writing to the Chairman, NERC. These applications are to be sent with 3 paper copies and 1 electronic copy in MS – Office Software format.

Also, the NERC will be at liberty to seek further information from licence applicants within a period of not later than 1 month after a required receipt acknowledgement of the application which must be communicated to the applicant.

Are Power Transmission Licence applications also required to be published in 2 daily newspapers for the required 21-day period for the receipt of objections to the granting of the license?

Yes, they are. Objections if received will be heard by NERC within a 30-day period.

How long does it take to have a Power Transmission Licence application processed?

License application processing by NERC shall be completed in not more than 6 months from the date of the licence application receipt & acknowledgment.

What are the requirements for the grant of a Power Transmission Licence in Nigeria?

The requirements for a Power Transmission Licence in Nigeria are :-

– A completed application form.

– A certificate of incorporation and MEMART Memorandum Articles of Association of the applicant company

– A registered Title Deed to site or a land sale agreement or proof of submission of title deeds to the relevant land processing agency.

– A Tax Clearance Certificate for the immediate past 3 years.

– A 10-year business plan.

– An off-taker agreement or arrangement.

– A Memorandum of Understanding (MOU) or Letter of intent from an Engineering Procurement Contractor(EPC) where applicable.

– A Memorandum of Understanding (MOU) with an applicant company’s technical partner if applicable.

– Financing agreements or letters to fund the project from financial institutions.

– Network Agreements with licensed Power distribution or trading companies.

– A single line diagram of the entire transmission network (132 & above).

– A single line diagram of the transmission networks showing points of connections to major load power stations.

– Numbers, names and capacities of transmission substations.

– Numbers & lengths of transmission lines.

– Interconnecting transformer details (numbers, types and capacities).

– Details of installed reactive compensation equipment.

– Substation layout diagrams showing:-

a). bus layouts;

b). electrical circuitry, lines, cables, transformers, switch gears etc;

c). earthing arrangements;

d). switching facilities and interlocking arrangements;

e). numbering nomenclature of transformers, circuits, circuit breakers and isolating switches in liaison with the Transmission Company of Nigeria (TCN).

– Transmission line parameters:-

a). designation of transmission lines;

b). route length of transmission lines;

c). number of circuits;

d). per circuit values :-

  1. Operating voltage (s).
  1. Positive phase sequence reactance – ohms/km.
  1. Positive phase sequence resistance – ohms/km.
  1. Positive phase sequence susceptance – ohms/km.
  1. Negative phase sequence reactance – ohms/km.
  1. Negative phase sequence resistance – ohms/km.
  1. Negative phase sequence susceptance – mhos/km .
  1. Zero phase sequence reactance – ohms/km.
  1. Zero phase sequence resistance – ohms/km.
  1. Zero phase sequence susceptance – mhos/km.
  1. Thermal rating.

– Transformer parameters (for all transformers) :-

a). Rated MVA

b). Voltage ratio

c). Vector group

d). Positive sequence reactance on rated MVA base (maximum, minimum and normal)

e). Positive sequence resistance on rated MVA (maximum, minimum and normal)

f). Zero sequence reactance on rated MVA base

g). Tap change range (+% to -%) and steps

h). Details of tap changer

i). Type of cooling

– Equipment details :-

a). Circuit breakers

b). Isolating switches

c). Current transformers

d). Potential transformers

e). Lightning arresters

– Relaying and metering :-

a). Relay protection installed for transformers and feeders along with their setting and level of coordination with others.

b). Transmission metering details.

– Transmission lines Right of Way & Trace clearance.

– Details of communication & SCADA (Supervisory Control and Data Acquisition) facilities available.

– Total system peak load to be connected.

– Maximum capacity of the network (MW, MVA).

– Health & Safety policy.

– Environmental Impact Assessment (EIA) for new transmission lines.

What is the validity period of Power Transmission Licences in Nigeria?

Power Transmission Licences have a validity period of 10 years and like DISCO, SO and Power Trading licences, can be extended, amended, suspended (not for more than 6 months) or cancelled.

What are the Fee Implications of obtaining a Power Transmission Licence in Nigeria?

A Power Transmission Licence application comes with the following fee implications :-

Application procession fees – 1 Million Naira.

Licensing fees – $300,000.00(Three Hundred Thousand US Dollars)

Processing fees for License renewal and tenure extension – 500 Thousand Naira

Annual Operating Fees – 1.5% of Licensed transmission company’s charges per Kwh.

Conclusion :- Seeking further guidance on the guidelines on post-licensing operations for Power Transmission companies in Nigeria are still quite vast and as a result, require further consultations with your lawyer. The next article in this series will be talking about a rather different type of Power Sector license – The Captive Power Generation Licence.


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