NATIONAL ASSEMBLY ANGRY WITH THE POWER SECTOR - STOPS PROPOSED BOND

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.