Reports have emerged that
the Senate has urged the Federal Government to suspend its plans to raise N309
billion bond to finance electricity generation with a view to erasing recorded
shortfall in projected power availability. This move according to the Senate is
to allow its committees on Power and Privatization to investigate the state of
the sector. The motion which was moved by Senator Mustapha Bukar was
unanimously adopted by the legislators.
Bukar’s reasons in support
of the motion is that the bond was not necessary in view of a recent
intervention of N213 billion in the power sector by the Central Bank of Nigeria
through the Nigeria Electricity Sector Intervention fund. He pointed out that
the shortfall in power generation has continued to escalate at an equivalent
rate of N500 million per day. He further opined that the continued incidence of
market shortfall is a disincentive for new investors to venture into the power
sector and that an increment in generating capacity would further aggravate and
worsen the market shortfall. The Senator concluded with saying that the
intervention would amount to not only spoon-feeding the operators but doing so
at great cost to the country.
While also opposing the
proposed bond at the House of Representatives, Hon. Edward Pwajok stated that
the Discos which collect revenues fail to remit in full to other market
participants and that there have been no measures put in place by the Nigerian
Electricity Regulatory Commission (NERC) to block leakages and sanction
defaulters. The lawmakers also premised their angst on the fact that there has
been no noticeable improvement in the electricity sector despite the fact that
tariffs have been raised twice since 2013.
There were resolutions at
both chambers of the National Assembly for the Nigerian Bulk Electricity
Trading Company to halt the move to raise the bond. However, the National
Assembly is yet to give a hint as to the legislative direction it wants to take
on the Power Sector in addressing the myriads of problems confronting that
sector. It is instructive to recall that during the privatization of certain
segments of the power sector such as the distribution companies, there was a
commitment by the investors to meeting certain targets on the reduction of
Aggregate Technical Commercial and Collection (ATC&C) losses. The aggregation
of losses being technical, commercial and collection losses is the methodology
for assessing the overall health of a utility.
The National Assembly’s disappointment
with the performance of the power sector is not isolated. However, there must
be a template for taking these power companies to task particularly on the
ATC&C loss reduction commitments which they made when they bided for these
utilities. To stop the proposed bond and do nothing thereafter is certainly not
an option for us. Nigeria needs a viable power sector and the only way to get
there is to ensure that the sector remains well-funded, regulation is effective
and that the sector operators adhere to their respective obligations.
