$10bn is required yearly for 10 years to fix power sector — FG

ABUJA- THE Federal government has said that if the Power sector must be revived to perform optimally, a total sum of 10 billion dollars was required yearly, just as it also disclosed that the country would cough out N2.9 trillion to achieve full subsidy of the sector.

Speaking yesterday in Abuja at a one day investigative hearing on halting the new electricity tarrif increase by the Nigerian Electricity Regulatory Commission (NERC) for onward implementation by the Distribution Companies (DisCos), the Minister of Power, Adebayo Adelabu said that the 10 billion dollars was needed anually in the next ten years to revive the nation’s power sector and end the liquidity challenge.

This is as Senators have called on the Minister of Power, Adebayo Adelabu and the Nigerian Electricity Regulatory Commission, NERC, to as a matter of urgency, reverse the recent decision to increase electricity tariff for band A customers in the country.

The investigative hearing by Senator Enyinnaya Abaribe, APGA, Abia South led Senate Committee on Power is also about the N2.9tn required for electricity subsidy payment, other debts owed in the sector, and the state of metering in the country as well as the $1.3 billion owed gas companies even as it asked why Nigerians were suddenly classified under various bands.

The Minister told the Senate Committee 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 tarrif, just as he stressed the subsidy had not be funded over the years as huge liabilities was been owned the Generating Companies ( GenCos) and the Gas Companies.

Adelabu who noted that 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, however pleaded with the Senators to support the process of paying the debt owed operators across the value chain of generation transmission and distribution.

According to him, the increase was based on supply and that any customer that do not receive 20 hours power supply will not be made to pay the new tarrif, adding that the government was committed to ensuring sustainable reform in the sector, even as he told the Senate that eight million meters would be acquired in the next four years.

The Minister who noted that there was the urgent need to clear the outstanding debt owed GenCos and Gas companies, 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.

According to him, poor metering remains a big issue too in the industry when he told the lawmakers about how a company, Ziklag Networks Limited allegedly collected N32 billion for a contract to supply meters but has refused to do so in 20 years.

“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.”

According to Adelabu, to improve power supply, the government was investing in hydro electric power, even as he said 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 also disclosed that there was also an on going investment of 26 small hydro power dams to boost electricity production across the country.

Officials of the Central Bank of Nigeria were also on ground to provide details on how to close the metering gap of 8 million meters.