Streamlining investment for the power sector recovery plan

The Federal Government in the past few years has made several attempts to restructure the power sector for optimal efficiency despite the huge limitations that continue to trail the sector.

Babatunde Fashola, Minister of Work, Power and Housing insists that government will follow through policy actions embedded in the Power Sector Recovery Programme in collaboration with the World Bank to ensure Nigeria’s privatised electricity market get out of its current difficulties.

Fashola at different interactive sessions with industry stakeholders assured that the Power sector recovery plan would offer the needed succour to achieve required productivity that an important sector like power deserves.

He observed that among the plans of government through a power sector ‘roadmap’ is to guide in setting standards on the course of action for the exercise and it was from its proposals that the government attempted to create a competitive, efficient and private sector-led power market for Nigeria.

According to Fashola, “In the plan PSRP promised to reset the way the market operates and encourage diverse investments that could enable it to grow its opportunities as was initially intended”.

This attempt was precipitated by the gas, generation, transmission, and distribution infrastructure constraints, inadequate retail electricity tariff, sector financial shortfall worth N420 billion, and other market governance challenges.

In it, the government said it has embedded, “a series of policy actions, operational, governance and financial interventions,” to be implemented by it over the next five years, and from which it hoped to restore the financial viability of the power market.

Within the framework of the PSRP roadmap, there is the aspiration to improve market transparency and service delivery, take up consumer satisfaction as a priority, and reduce losses and energy theft recorded by the market.

All these, it explained would holistically add up to in the next five years gift Nigeria a brand new power market that would be responsive and responsible.

A cursory look at the policy indicates that the Federal Government plans to through the Power sector recovery plan restore the financial viability of the market, improve supply reliability, strengthen market’s governance, as well as place a premium on transparency and contract-based market.

For the above to materialise, it is expected that the Federal Government must first commit to fund projected future sector deficits, as well as required market support measures until tariffs are adequate enough to support the market’s liquidity.

The PSRP would also ensure that payments for future electricity services to government’s MDAs are netted through a payment mechanism to be developed by it, allow the sector to operate a cost reflective tariff, as well as meet up with its approval of the Central Bank of Nigeria (CBN) to support the Nigerian Bulk Electricity Trading Plc (NBET) with a N701.9 billion facility to guarantee its payment obligations to the generation companies.

As laudable as this projections are, operators in the power sector insists that the absence of a clear-cut implementation timeline by the government may just render the prospect useless.

According to them, “The value of such specific timelines included the convenience of stakeholders making business based decisions in line with the programme and its objectives.

They observed that the progress of any endeavour is not measured by mere activities in that regards but by the impacts which should be part of its Key Performance Index.

KELECHI EWUZIE