[SPECIAL REPORT]
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40MW of Wind Power by 2020
30MW of biomass-fi red capacity by 2020.
Incentives in The Power Sector
The Federal Government of Nigeria has set-up several
incentives to attract foreign direct investment into the power
sector.
• Tax holidays of 3 years, renewable for another 2 years
• Exemption from Duty Taxes on imported equipment
• Capital & Investment Allowance which can be carried
forward and used in the post tax holiday period
• Manufacturing of transformers, meters, control panels,
switchgears, cables, and other electrical related equipment
are considered as pioneer products/industries. As a result,
there is tax holiday of 5-7 years for investors who invest
in these areas.
• Power plants using gas are assessed under the companies
income tax act at a reduced rate of 30 percent
• 100 percent foreign ownership of electricity plants
• Repatriation of profi t with a 5 percent withholding tax
• Institution of a politically independent and transparent
regulatory agency for the power sector that will eff ectively
enforce the established regulatory framework
• Putting in place the necessary foundations, e.g. reliable
transmission infrastructure that would create a level
playing fi eld for effi cient private sector participation in
the electricity supply
• Implementation of a transparent and predicated tariff
adjustment mechanism that will cover the cost of
production and provide adequate returns on investment
at all times.
Proposed Incentives for Power Sector
Manufacture of electrical equipment, appliances, parts etc.
• Exemption from Income tax – Tax Holiday (Between 10
and 20 years depending on the quantum of investment)
• Import duty exemption for machinery, spares, and
consumables and 150 percent on R&D
• 2 percent tax concession on in-plant training for a
specifi ed number of years (Years depend on quantum of
Investment).
Preferred Vision 20-2020 Target of 40GW
Renewables
Coal
Hydro
Thermal
4 percent
10 percent
17 percent
69 percent
Source: https://www.nipc.gov.ng/power/
Nigeria-India• 2018 • 31