The Minister of Power, Mr Adebayo Adelabu, declared in Abuja Monday that the federalf government requires $10 billion anually for the next 10 years to revive the nation’s power sector and end the liquidity challenge.
Adelabu made the declaration at the investigative hearing organised by the Senate Committee on Power on the need for the federal government to halt the new electricity tarrif increase by the Nigerian Electricity Regulatory Commission (NERC) .
He 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 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 being shown by investors.”
He added 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.
He, however, said the subsidy had not be funded over the years as huge liabilities was being owned the Generating Companies (GenCos) and the Gas Companies.
According to him, the inability of the government to pay outstanding N2.9 trillion subsidy was due to limited resources.
The increase he explained further , is based on supply, meaning that any customer that do not receive 20 hours power supply will not be made to pay the new tarrif.
To improve power supply, he said government was investing in hydro electric power, adding that construction of 700 mega watt power in Zungeru had commenced, while Kashimbila Hydroelectric power plant of 40 mega watts was awaiting evacuation to improve generation.
The minister said there was also an ongoing investment of 26 small hydro power dams to boost electricity production across the country.
However, members of the committee in their separate remarks decried the experiences of Nigerians on electricity supply over the years, despite the unbundling of the sector.
Specifically, Senator Lola Ashiru (APC Kwara South), 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 need to consider a reversal of the tarrif increase.
Senator Enyinnaya Abaribe (APGA Abia South), 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.
Senator Adamu Aliero (PDP Kebbi Central), 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 per cent, hence the need for a reversal of the tarrif increase.
Other stakeholders’ that made presentation at the investigative hearing includes the Nigerian Electricity Regulatory Commission (NERC), Manufacturers Association of Nigeria (MAN), Association of Power Generation (Gencos), Electricity Distribution Companies (DisCos) among others.
