Nigerian Breweries secures approval for captive power generation amid rising costs
NIGERIA – Nigerian Breweries Plc (NB) has received regulatory approval to generate captive power in its facilities located in Abia, Oyo, and Enugu states.
This move comes as the company seeks to address high electricity costs and persistent power fluctuations.
The Nigerian Electricity Regulatory Commission (NERC) disclosed in its third-quarter 2024 report that it granted permits for captive power generation to Nigerian Breweries. The company is now generating a cumulative 41 megawatts of electricity across its four stations.
The approval aligns with a growing trend of companies leaving the national grid to generate their own power following the enactment of the Electricity Act 2023.
According to NERC, captive power generation permits are issued to entities intending to own and operate power plants exclusively for their consumption, with no provision for selling the generated electricity to third parties.
In total, NERC approved captive power generation permits for 11 applicants with a combined capacity of 63.36 megawatts during the quarter.
Earlier in October 2024, Nigerian Breweries signed a power purchase agreement with Konexa to transition two of its breweries in Lagos and Ama Enugu to 100 percent renewable energy.
The company described this move as part of its broader efforts to achieve carbon neutrality across its operations.
The approval to generate captive power is expected to help Nigerian Breweries reduce operational costs, especially as the company faces mounting foreign exchange (FX) losses.
As of the third quarter of 2024, its FX losses had surged by 84.83 percent to ₦160.48 billion (US$103.96M), compared to ₦86.83 billion (US$56.3M) reported in September 2023.
Meanwhile, Nigerian Breweries has also announced the listing of 20.7 billion ordinary shares on the Nigerian Exchange Limited (NGX).
In a statement by the company secretary, Uaboi Agbebaku, the shares were officially listed on December 30, 2024, following the company’s rights issue of 22.6 billion shares at ₦26.50 (US$0.017) per share.
This development increases the company’s total outstanding shares on the NGX from 10.28 billion to 30.98 billion ordinary shares of 50 kobo (US$0.9084 )each.
The company had launched the ₦599.1 billion (US$388.1M) rights issue in September 2024 to address its FX losses and reduce interest burdens on local debts, exacerbated by Nigeria’s 26 percent monetary policy rate.
Sign up HERE to receive our email newsletters with the latest news and insights from Africa and around the world, and follow us on our WhatsApp channel for updates.
