A report by The Corvus, a financial and economic publication of Guaranty Trust Bank Plc, has said that captive power possesses huge potential that can transform small and medium enterprises (SME) and the economy, if leveraged properly, The Nation reports.

It said developing a captive power plant (CPP) was quite complex. Quoting Pricewaterhouse Coopers (PwC), it said the project development timelines for a CPP may span about three years, noting that it involves several predetermining factors ranging from regulation to mode of financing. It noted that financing was straight forward in comparison to regulatory factors, in that Nigeria’s laws governing captive power generation (CPG) are quite restrictive.

Quoting the National Bureau of Statistics (NBS), the study also stated that as at February, there were 37 million Small and Medium Scale Enterprises (SMEs) in the country. It said 10 years ago, the government, through its Financial System Strategy 2020, targeted SME clusters for infrastructural support, as critical to solving their power challenge and that today, with these clusters still bereft of adequate power supply, CPPs can fill the gap.

It noted that the case for CPG is apt; as industrially, they can guarantee SMEs security of power supply, commercially, they require significantly less time and money to develop when compared to traditional power, and technically, they can be configured to the specific industrial demands of SME clusters.