FG Must Invest $10bn Annually For Improved Electricity -- Minister | Independent Newspaper Nigeria

Source: Independent Newspapers Nigeria

ABUJA - The Minister of Power, Adebayo Adelabu, on Monday in Abuja re­vealed that Nigeria would need an annual $10 billion to revive the country's ailing electricity gen­eration, distribution and supply chain.

He said that the sum must be spread across a period of 10 years to end the liquidity challenge in the sector.

The minister's disclosure was made at a one day inves­tigative hearing on halting the increase in electricity tariff by eleven successor electricity dis­tribution companies amid the biting economic situation in Nigeria organised by the Senate Committee on Power.

His position irked the lawmak­ers who in their various contri­butions bemoaned the country's power situation.

They decried the experiences of Nigerians on electricity supply over the years, despite the unbun­dling of the sector.

Sen. Lola Ashiru said Nigeri­ans were paying for inefficiency of power sector operators.

Ashiru, who is vice chairman of the committee, said there was a lot of inefficiency across the value chain of generation, trans­mission and distribution.

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

Sen. Solomon Lalong said there was no consultation before the increase, adding that issues of palliative should have been discussed and provided before the tariff increase.

Sen. Enyinnaya Abaribe, who is Chairman of the Committee, said 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.

He alleged that the company had received N32 billion in 20 years to meter Nigerian electric­ity consumers.

Sen. Adamu Alero said due consultation was not made before the tariff increase.

He said the public was not at peace with the increase, saying that the increase was over 200 per­cent, hence the need for a reversal of the tariff increase.

Stakeholders that made pre­sentations at the investigative hearing included the Nigerian Electricity Regulatory Commis­sion (NERC), Manufacturers Association of Nigeria (MAN), Association of Power Generation (GenCos), Electricity Distribution Companies (DisCos), among oth­ers.

Unfazed, the minister insisted that "for this sector to be revived, the government need to spend nothing less than $10 billion an­nually in the next 10 years.

"This is because of the infra­structure requirement for the stability of the sector, but the government cannot 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 tariff for A Band, there are interests been shown by in­vestors."

He attributed the major challenge in the sector to the absence of liquidity, adding that the sector has been operating on a subsidised tariff regime, given the absence of a cost reflective tariff.

This is as he pointed out that subsidies had not been funded over the years as huge liabilities were owed to the Generating Companies (GenCos) and the gas companies.

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

He appealed to the lawmakers to support the process of paying the debt owed operators across the value chain of generation, transmission and distribution.

According to him, the increase is based on supply, saying that any customer that does not receive 20 hours power supply will not be made to pay the new tariff.

He said the government was committed to ensuring sustain­able reform in the sector, saying that there was need to clear the outstanding debt owed GenCos and gas companies.

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

The minister said there was also an ongoing investment of 26 small hydropower dams to boost electricity production across the country.