House to Investigate N7tn Interventions in Power Sector since Privatization… 

The House of Representatives, yesterday, resolved to investigate all the financial interventions, which amounted to over N7 trillion, in the power sector since its privatisation to ascertain whether the funds were judiciously utilised.

The resolution came as Chairman of the Nigeria Governors Forum (NGF) and Governor of Kwara State, AbdulRahman AbdulRazaq, commended the signing of the Electricity Act 2023 into law.

AbdulRazaq, who also confirmed that the federal government had invested over N7 trillion in electricity, described the new law as a significant milestone towards stable and efficient electricity supply in Nigeria.

Equally yesterday, the newly appointed Director General of the Energy Commission of Nigeria (ECN), Dr. Mustapha Abdullahi, promised that his agency would work towards the full integration of renewable and alternative energy into the country’s power architecture.

The resolution of the House of Representatives was sequel to the adoption of a motion moved at yesterday’s plenary by Hon. Ademorin Kuye.

Moving the motion, Kuye recalled that the federal government in 2013, unbundled the Power Holding Company of Nigeria (PHCN), and sold 18 utility firms to private investors, resulting in six generation companies (GenCos) and 11 distribution companies (DisCos).

Kuye added that the privatisation of Nigeria’s power sector was necessary due to the failure of the defunct PHCN to attract investments, but the industry had not meet Nigerians expectation.

He stressed that the federal government had spent over N7 trillion on direct interventions in the power sector, despite privatising the industry, since November 2013. These included, according to him, the Presidential Power Initiative, a strategic approach to address Nigeria’s unreliable and inadequate electricity supply.

He noted that but for the interventions by the Central Bank of Nigeria (CBN) of over N1.3 trillion, the country’s power sector would have collapsed due to liquidity, poor performance, suppressed tariffs, lack of infrastructure at the transmission and distribution ends, and weak regulations and oversight.

Kuye noted that since the privatisation, the power sector had undergone various financial interventions, including those from International donor agencies. He said the World Bank had approved an International Development Association (IDA) credit of $486 million aimed at upgrading the wheeling capacity of the Nigerian electricity transmission grid, including the rehabilitation and expansion of transmission substations across Nigeria.

He added that the African Development Bank (AfDB) provided a facility of $300 million to the TCN for the purpose of expansion and rehabilitation of existing northern corridor transmission lines, particularly in the North-west and North-central regions.

Kuye noted that the French Development Agency also provided a facility of $170 million for transmission infrastructure expansion around Abuja metropolis and neighbouring states.

He expressed concern that revenue generation and collection had been the major challenge of the power sector, as DisCos lamented revenue shortfalls attributed to low electricity tariff or electricity revenue that might be accruing to the wrong accounts.

Kuye also lamented that out of the 11 DisCos in Nigeria, banks had taken over six, which he listed as the AEDC, KADECO, KEDCO, BEDC, IBEDC and PHEDC, due to poor financial performance and management.

He expressed worry that the National Power Grid had collapsed over seven times this year, despite the huge investment in the power sector, which he said explained the persistent electricity shortage in the country.

The House mandated “the Committee on Power to investigate all the financial interventions in the power sector since privatisation with a view to determine whether the funds were judiciously utilised and report back within six weeks for further legislative action”.