The Host Community Development Act for Generating Electric Companies (GENCOs): a step towards progress and equity
In a bid to address the developmental and environmental concerns of the host communities, a law was passed in 2023 by the House of Representatives and the Senate, sponsored by Hon. Babajide Benson of Ikorodu Constituency in the state from Lagos.
This law aims to put in place a mechanism that will allow 5% of the actual annual operational expenses of electricity generating companies (GENCOs), from the previous year, to be dedicated to the development of their respective host communities.
According to the Special Adviser to the President on Media and Communications, Chief Ajuri Ngelale, this fund will be used to finance infrastructure projects in the host communities of GENCOs. It will thus make it possible to meet the development needs of these communities, thus contributing to reducing existing socio-economic disparities.
The passage of this law is an important step in promoting equity and community development. Indeed, it is essential that host communities benefit significantly from the activities of energy companies operating in their territory. This will ensure a more equitable distribution of resources and support local development.
Projects financed by this fund could include the construction and renovation of basic infrastructure such as roads, schools, health centers, water systems and other essential services to improve quality of life residents of host communities.
This law demonstrates the government’s desire to place host communities at the heart of the country’s economic and social development. It also constitutes an incentive for GENCOs to become more involved in social responsibility initiatives and to actively contribute to the well-being of the communities where they operate.
In conclusion, the Host Community Development Act for Generating Electric Companies is an important step toward more equitable and inclusive development. It guarantees that host communities benefit from the economic benefits of these companies and encourages their involvement in local development. This law represents a significant step forward in promoting progress and equity within host communities.