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Nigeria Needs $10 Billion Yearly To Revive Power Sector- Adelabu



Electricity Tariff Hike: Power Ministry, NERC Forcing Nigerians To Pay For Their Inefficiency

-As Senate Insists On Reversal Of Electricity Tariff

The Minister of Power, Adebayo Adelabu, on Monday, claimed that the Nigeria required a whopping sum of $10 billion anually for the next ten years, to be able to revive the power sector and end the liquidity challenge.

This was as the Senate insisted that the recent outrageous electricity tariff increase must be reversed, lamenting that the action of the Ministry was tantamount to forcing Nigerians to pay for the inefficiency of the operators of the sector.

Adelabu made the claim at the investigative hearing organised by the Senate Committee on Power, on the need for the federal government to halt the new electricity tarrif increase recently introduced by the Nigerian Electricity Regulatory Commission (NERC).

He said: “For this sector to be revived, government need to spend nothing less than 10 billion dollars annually in the next 10 years.

This is because of the Infrastructure requirement for the stability of the sector, but government can not afford that and so we must make this sector attractive to investors and to lenders.

“So for us to attract investors,and investment, we must make the sector attractive, and the only way it can be made attractive is that there must be commercial pricing. If the value is still at N66 and government is not paying subsidy, the investors will not come. But now that we have increased tarrif for a Band, there are interest been shown by investors.”

He pointed out that the major challenge in the sector was absence of liquidity, saying that the sector has been operating on a subsidised tarrif regime, given the absence of a cost reflective tariff.

Adelabu however, said that the subsidy had not been funded over the years as huge liabilities was been owned the Generating Companies (GenCos) and the Gas Companies.

According to him, the inability of the government to pay outstanding N2.9 trillion subsidy was due to limited resources, hence the need to evolve measures to sustain the sector.

He therefore, appealed to the lawmakers to support the process of paying the debt owed operators across the value chain of generation, transmission and distribution, explaining that the increase was based on supply, and that any customer that did not receive 20 hours power supply would not be made to pay the new tarrif.

To improve power supply, he said government was investing in hydro electric power, adding that construction of 700 mega watt power in Zungeru had commenced, while Kashimbila Hydroelectric power plant of 40 mega watt was awaiting evacuation to improve generation.

The Minister said that there was also an on- going investment of 26 small hydro power dams to boost electricity production across the country.

However, in their separate contributions, members of the Committee, lamented over the experiences of Nigerians on electricity supply over the years, despite the unbundling of the sector.

Senator Lola Ashiru (APC Kwara South), who is the Vice Chairman of the Committee, said that Nigerians were paying for inefficiency of power sector operators, noting that there was a lot of inefficiency across the value chain of generation, transmission and distribution.

He said that poor Nigerians must be protected, adding that there was need to consider a reversal of the tarrif increase.

In his view, Senator Enyinnaya Abaribe (APGA Abia South), who is the Chairman of the Committee, said that what Nigerians wanted was a solution to the issues and ways to ensure liquidity in the sector.

He also decried the non-appearance of a company “ZIGLAKS” over the failed agreement to provide prepaid meters for Nigerians, alleging that the company had received N32 billion in the last 20 years to meter Nigerian electricity consumers.

Similarly, Senator Adamu Aliero (PDP Kebbi Central), said that due consultation was not made before the tariff increase, stating that the public was not at peace with the increase, and that the increase was over 200 per cent, hence the need for a reversal of the tarrif increase.

Other stakeholders, that made presentation at the investigative hearing include the Nigerian Electricity Regulatory Commission (NERC), Manufacturers Association of Nigeria (MAN), Association of Power Generation (Gencos), Electricity Distribution Companies (DisCos) among others.