House of Representatives To Investigate Power Sector Intervention Funds

The House of Representatives has resolved to investigate all funds injected by the government into the power sector since privatisation of the sector in 2013.

READ ALSO: Sale of Power Plants: House of Reps summons Finance, Power Ministers

This is sequel to the adoption of a motion by Hon Ademorin Kuye, calling for an investigation into the financial interventions in the power sector amounting to trillion naira.

While leading the debate on the motion, Kuye informed the House 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 eleven distribution companies (DisCos).”

He stated that the privatisation, not withstanding, Federal Government has spent over seven trillion Naira as direct interventions in the power sector, amongst others.

According to him, “since the privatisation, the power sector has undergone various financial interventions, including those from International Donor Agencies: the World Bank, which approved an International Development Association (IDA) credit of the sum 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.

“The African Development Bank (AFDB) provide a facility of the sum 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.

“The French Development Agency provided facility of $170 million for Transmission infrastructure expansion around Abuja metropolis and neighbouring States.

“Japan International Cooperation Agency (JICA) provided a facility of $238 million for Transmission infrastructure expansion within the southwest region of Nigeria; Japan International Cooperation Agency (JICA) provided a facility of $13 million for power improvement along Apo and Keffi in Nasarawa State, northcentral Nigeria.

“Japan International Cooperation Agency (JICA) also again provided a facility of $21 million for the Rehabilitation and upgrade of Apapa road 132KV substation and rehabilitation of Akangba 330KV substation.

“European Union (EU) provided facility of €25 million for electricity transmission infrastructure along the northern corridor, particularly around the north-west and north-central regions of  Nigeria etc. Others include the German government, the UK’s Department for International Development, and Siemens Energy are among the various agencies which have provided financial support for some projects. “

He stated that revenue generation and collection have been the major challenge of the power sector, noted that the DisCos are lamenting over revenue shortfalls attributable to low electricity tariff.

“Out of the eleven DisCos in Nigeria, banks have taken over six which are AEDC, KADECO, KEDCO, BEDC, IBEDC and PHEDC due to poor financial performance and management.

“The Aggregate Technical and Commercial Collection (ATC&C) loss is an actual measure of the performance of a power distribution system as it includes both technical losses and commercial losses.

” It shows the gap between input energy into the system and the units for which the payment is collected. Improved ATC&C loss reduction would be achieved if Discos adopted a combination of
other strategies that would ensure reduction in technical and commercial losses in addition to aggressive deployment of meter assets.” Hon Kuye said.

He noted that the Nigeria Electricity Regulatory Commission (NERC)’s performance as an industry
regulator is questionable for its inability to move the industry forward and eliminate illiquidity. He added that it is disturbing that the Nigeria Electricity Supply Industry faces threat due to the poor performance and transparency of DISCOs and the NERC’s ability to sanction erring stakeholders.

Other lawmakers who contributed to the motion supported it, saying that the more funds pumped into the power sector, the leas power Nigerians get.

The House therefore mandated its Committees on Power, Privatisation and Commercialization and Finance to undertake the probe and report back to the House within six weeks for further legislative action.