Improved power supply still a long shot
Right from 2013 when the privatization of the Nigerian power sector was carried out, liquidity challenges on the part of distribution and generation companies have constituted a huge stumbling block to the regular supply of electricity.
Despite several stakeholders and investors’ meeting with the Minister of Power, not much has been done to address this key issue of power supply.
It was reported that in 2016 the power sector lost over N534 Billion in revenue. This was traced to shortages in gas supply, frequency and line limitations and water levels management constraints that led to several cases of outage in the country.
Recent statistics indicate that DISCOs’ remittances to NBET for energy has fallen from an average of 65 percent in 2015 to 35 percent over 2016, whilst monthly revenue shortfalls have increased from an average of N9 Billion in 2015 to N25 Billion in 2016.
Babatunde Fashola, minister of Power, Works and Housing holds regular meetings with regular with electricity operators in the country to discuss critical issues with the sector but it remains to be seen when an appropriate solution to end the hiccups bedeviling the sector would emerge.
Report has constantly showed that investors and stakeholders in the power sector as a result of the liquidity issues find it difficult to access more loans from Nigerian banks due to their inability to meet the payment obligations connected with previous debts.
This worrying situation has no doubt affected the capacity of the power firms to improve on electricity supply to consumers for domestic and industrial uses.
Industry close watchers are worried that if this situation persist, industries and other users will carry on with the burden of providing own electricity outside the national grid for the foreseeable future.
The announcement by the Federal Government through the Federal Executive Council of the approval N701 Billion as Power Assurance Guarantee for the NBET is seen as spirit lifting to cushion revenue gap in the industry which has grown too large over a short period of time.
In the views of industry analysts, this move will guarantee payment for gas supplied for power generation and could act as an incentive for improved gas supply to power generating plants across the country.
According to them, “the guarantee should be used, primarily, to settle gas debts owed to GENCOs. Of the total guarantee sum, the FG aims to resolve over N500 Billion debts owed to gas suppliers to further boost confidence in investors”.
KELECHI EWUZIE