Lawmakers on Tuesday faulted the
federal government’s plan to secure a
N309 billion bond to finance the
shortfall in the Nigerian electricity
market.
The bond, issued by the Federal Ministry
of Power and the Nigerian Bulk
Electricity Trading Company Plc., has
encountered serious opposition by
Nigerians, with the House of
Representatives organising a public
hearing to review it.
At the opening of the public hearing on
Tuesday, Speaker of the House of
Representatives, Yakubu Dogara, said
apart from the dismal performance of
the power sector under private
operators, the government had no
business securing a bond issue in a
privatised market operated by private
entities.
“The whole essence of the Federal
Government embarking on the
privatization of the defunct Power
Holding Company of Nigeria (PHCN) and
the electric power sector reform
programme was to bring about
efficiency to the Nigerian Electricity
Supply Industry.
“Unfortunately, since the unbundling of
PHCN and transfer of the businesses to
the privately-operated successor
companies on November 1, 2013, we
have not had a good report from the
electricity market,” Mr. Dogara noted.
The speaker said available statistics
showed an abysmal situation that has
given lawmakers reason to be afraid
that if the trend continued, “there may
be need for a fundamental re-thinking
of the privatization process (in the
power sector) in Nigeria.”
According to Mr. Dogara, since the
privatisation exercise, the duration of
uninterrupted supply of electricity has
degenerated to an average of six to eight
hours daily, while metering of
customers, which has been a major
source of concern for consumers, has
remained dismal.
Besides, he said the problem of crazy
estimated bills used to exploit
consumers, has worsened, while tariffs
were increased in February 2016,
despite that there had not been any
improvement in electricity generation
capacity over the period.
The speaker said despite the deplorable
state of the industry, cumulative market
funding shortfall rose to over N700
billion as of date.
NBET’s Electricity Market Payment
Report for August 2016 showing that the
trend was escalating at about N25.6
billion monthly.
A market shortfall represents the
difference between the invoiced amount
of electricity transmitted to the
distribution companies (DISCOs) in any
given month and the amount remitted
for the payment of the market
participants for electricity supplied.
During the public hearing, the
lawmakers expressed concern over the
inability of the operators to set controls
to halt the bleeding of the market
revenue before attempting to raise a
bond to cover the growing shortfall.
Besides, they stressed the need to assess
the impact of the N213 billion
stabilization facility by the Central Bank
of Nigeria in March 2015 to the power
sector operators before considering fresh
funding through the bond issue.
“What is the role of the Nigerian
Electricity Regulatory Commission
(NERC) in this process? Who will bear
the cost of the facility – consumers or
operators? How would this impact the
electricity tariff?” Mr. Dogara asked.
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