Investor & Regulatory FAQs – Nigerian Electricity Sector
What major change did the Electricity Act 2023 introduce?
The Electricity Act 2023 decentralised Nigeria’s electricity sector by allowing States to establish and regulate their own electricity markets, while the Federal Government (through NERC) continues to regulate inter-state, national grid, and international electricity activities.
What Is NERC’s role under the decentralised regime?
NERC continues to regulate inter-state electricity activities, national grid operations, transmission, system operation, electricity trading, and activities in States that have not assumed regulatory authority.
Does NERC still issue electricity licences under the EA 2023?
Yes. NERC continues to issue licences, permits, and authorisations for:
- Electricity activities that span more than one State
- Electricity activities connected to the national grid
- Trading, system operation, transmission, and other federally regulated activities
- Any activity where a State has not yet established its Electricity Regulatory Authority
What types of approvals does NERC issue under the decentralised framework?
NERC issues the following approvals where it has jurisdiction:
Licences
- Generation Licence (On-Grid, Off-Grid, Embedded – inter-state or national grid-connected)
- Transmission Licence
- System Operation Licence
- Distribution Licence (inter-state or national grid-connected)
- Electricity Trading Licence
Permits and Certificates
- Captive Power Generation Permit
- Meter Asset Provider (MAP) Certificate
- Meter Service Provider (MSP) Certificate
- Clearance Certificate for Importation of Generating Sets
When should an investor apply to a State Electricity Regulator?
Investors should apply to a State regulator where the electricity activity is wholly within one State, the State has established its electricity regulatory authority, and the project does not involve the national grid or inter-state supply.
What laws and regulations govern NERC licensing decisions?
NERC licensing is governed by:
- Electricity Act, 2023
- Application for Licence Regulations, 2010
- Regulation on Embedded Generation, 2012
- Regulation on Independent Electricity Distribution Networks (IEDN), 2012
- Regulation for Captive Power Generation
- MAP & NMMP Regulations, 2021
- Other NERC-issued guidelines and instruments
How do I apply for a licence or authorisation from NERC?
Applicants should:
- Identify whether NERC or a State Regulator has jurisdiction
- Download the relevant application form and guideline from the NERC website
- Submit completed forms with required documentation
- Pay the prescribed fee
- Respond promptly to any request for additional information during review
What documents are generally required?
Typical requirements include:
- Certificate of Incorporation
- Memorandum & Articles of Association
- Tax Clearance Certificate
- Technical and operational capacity information
- Financial capacity documentation
- Business plan or project description
- Proof of payment of applicable fees
Specific requirements vary by licence type. Click Here for addidional information on the requirements based on type of license or permit
10. What are the approved processing timelines?
In line with PEBEC and the Business Facilitation Act, NERC publishes and adheres to the following timelines:
| Service | Timeline |
|---|---|
| Generation, Transmission, Distribution, Trading & System Operation Licences | Up to 6 months |
| Captive Generation Permit | Up to 6 months |
| Importation of Generating Set Clearance | Up to 3 months |
| MAP Certificate | Up to 3 months |
| MSP Certificate | Up to 3 months |
Timelines commence upon submission of a complete application.
What happens if a State later assumes regulatory authority after NERC has issued a licence?
Where jurisdiction legally transitions to a State under EA 2023:
- Existing approvals remain valid, subject to transitional provisions
- Coordination will occur between NERC and the relevant State Regulator
- Licensees will be formally notified of any migration or compliance requirements
Are fees different under the decentralised regime?
No. Fees applicable to NERC-issued licences remain as prescribed in the Schedule of Fees for Licences, Permits and Other Authorisations published by NERC. Click here for the specific fees based on license type
State regulators may issue separate fee schedules for State-issued licences.
Is it an offence to operate without a licence?
Yes. Under the Electricity Act, 2023, engaging in regulated electricity activities without the appropriate licence, permit, or authorisation is an offence and may attract penalties, enforcement actions, or prosecution.
Why invest now?
EA 2023 opens multiple decentralised markets, improves regulatory certainty, and expands opportunities in grid, off-grid, captive, and embedded power segments.
How are tariffs determined?
Tariffs may be regulated or negotiated depending on the market segment. EA 2023 supports cost-reflective tariffs and bilateral arrangements to improve project bankability.
What are my rights as an applicant?
Applicants have the right to:
- Clear information on requirements, fees, and timelines
- Transparent and fair processing of applications
- Written feedback on application outcomes
- calation of service delays in line with the Business Facilitation Act
Where can I obtain further assistance?Website: https://www.nerc.gov.ng
Email: info@nerc.gov.ng
Office Address:
Nigerian Electricity Regulatory Commission
Plot 1387, Cadastral Zone A00
Central Business District
Abuja, FCT, Nigeria
How can investors escalate delays?
Applicants may escalate unresolved delays through NERC’s channels or the PEBEC ReportGov grievance platform.